The Debt Management Standard ensures that debt management practices are consistent, legally compliant, and aligned with operational and technological needs while promoting responsible financial management and risk mitigation. There are several technologies available and widely used across Commonwealth entities, generally as either modules of a broader-purpose CRM platform or as specific implementations of a Case Management system, that support responsible and ethical debt recovery practices.
It is critical this standard be considered alongside those of complementary capabilities:
- Case Management
- Customer Relationship Management (CRM)
- Entitlements
- Information Asset Management
- Information Asset Security
- Payments
Comply with legislation and regulation
Entities must:
- comply with relevant Commonwealth legislation including (but not limited to):
- Public Governance, Performance and Accountability Act 2013 (Cth) (PGPA Act)
In accordance with the PGPA Act, the accountable authority is required to promote the financial sustainability and the proper use and management of public resources of their entity. Accountable authorities:
- are required to pursue recovery of debts owed to the Commonwealth
- can modify the terms and conditions on which an amount owing to the Commonwealth is to be paid.
Align operational and technological needs
Entities should:
- ensure that the debt management systems integrate with existing financial and operational systems to support seamless operations
- assess their technological capabilities and limitations and plan for upgrades or enhancements where necessary to support effective debt management.
Undertake responsible debt collection
Entities must
- adopt responsible debt collection practices that balance the needs to recover debt with fairness and ethical considerations.
Entities should:
- implement a system that enables process transparency
- communicate clearly with debtors via systemic, standardised means
- ensure collection practices are proportionate and respectful.
Proactively mitigate financial risks
Entities should:
- ensure accurate budgeting and forecasting to anticipate and prevent financial shortfalls
- establish oversight mechanisms to monitor and prevent debt accumulation of individuals and businesses
- share best practices and strategies across government to minimise the risk of debt generation
- ensure a feedback loop at the conclusion of debt recovery activities to enable ongoing refinement to ensure preventative measures are improved.
Monitoring for debtor and entity risks
Entities should:
- implement automated monitoring tools to track the outcomes of in debt management, identifying any patterns of bias or unintended consequences
- conduct regular audits of debt management systems to detect and address systemic biases, with adjustments made promptly based on findings
- establish a feedback loop to review debt management decisions and update systems as needed to eliminate identified biases.
Adhere to reuse principles
The Australian Government Architecture provides information for entities on Reuse.
Entities should:
- compare their requirements with those of other comparable entities and system functions, and seek to reuse learnings from preceding implementations
- consider specific functional and non-functional requirements prior to solution design or consideration of technology choice, including:
- volume and nature of debts
- broader entity purpose
- performance and availability requirements
- privacy/sensitivity concerns
- meet the requirements of the whole-of-government reuse policy.