All chief executives will be aware of the government's policy that debts payable by agencies be met without undue delay. The Premier has asked me to emphasise that the same expectation of timeliness applies to the collection of debts due to the government through its agencies.

The prompt collection of debts should be seen as a key part of the government's overall approach to maintaining a sound financial position. You will appreciate that avoidable delays in collection have an adverse impact on the availability of funds to provide government services.

All agencies are now asked to critically examine their current performance in this area for opportunities to achieve a significant and early reduction in overdue debts. It is requested that this matter be given a high priority.

In organisations where payments by debtors provide a significant proportion of revenue, debt collection performance should be included in the performance agreements of the executives with the relevant responsibilities, if this is not already the case.

All agencies with debts are expected to have performance targets for debt collection and these should include the desirable ratio of the aggregated value of overdue debts to the aggregate of all debts owed to the agency. The targets for any one agency will depend on the nature of the business environment but in all cases the targets should be challenging.

In circumstances where collection activities would or do absorb considerable staff resources or where internal efforts appear to be achieving less than optimun results it may be cost effective to contract-out the collection of overdue debts.

Assistance from the Office of Public Management.

The Office of Public Management has commenced as series of studies of collection performance and processes in a selection of departments and authorities. The chief executives of those organisations are being provided with additional advice. Organisations which have not been contacted for inclusion in the studies may telephone Mr. Malcolm Richardson, Office of Public Management, on 228-4802 to seek specific advice if desired.

R. G. Humphry,
Director-General.

Issued by: OPM-IRU
Dated: 03/04/1991