Departments 'more proactive' in pursuing money owed

Brunei-Muara - The number of debt collection cases-filed by government agencies has almost doubled in past two years, according to recent statistics from the Attorney General's Chambers (AGC).

Debt cases have jumped from 2,982 in January 2011 to 4,356 in December 2012 - an increase of 42 per cent.

Senior Counsel Ahmad Jefri Rahman, head of the Litigation & Dispute Resolution Unit at AGC, said this was because government departments were becoming more proactive in pursuing money owed to them in the form of unpaid utilities bills, housing fees, municipal fees and hospital bills, among others.

"(This issue) received a lot of attention in the Legislative Council two years ago. It was raised by the second Minister of Finance that we - have debts amounting to several hundred million." The public owes the State more than $569 million in unpaid housing and car loans, while water and electricity bills amounted to $230 million, it was revealed during the last session of the Legislative Council in March.

The private sector did not fare much better, owing the State $489 million in uncollected revenue, a whopping amount which could be used to build "roughly 4,000 homes or 50 health centres, or 23 secondary schools, or 100 primary schools or 250 km of highway", said Minister of Finance II Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abdul Rahman Hj Ibrahim.

"So after that (announcement) a lot of people came to see whether their department was one of those (owed money)," Jefri explained in an interview on the sidelines of an AGC event in Jerudong. "Knowing they have to do something about it, they started referring cases to us and said please help us."

The AGC has been carrying out a series of briefings on debt collection management for government offices, aiming to increase awareness of their responsibilities to chase unpaid revenue. Under law, heads of department are person ally responsible for prompt collection of all revenue relating to their department: If revenue is outstanding for longer than 18 months and the officer responsible is satisfied that payment cannot be expected, he must submit an application to waive recovery of the revenue and detail the action taken, such as legal proceedings, to recover the debt.

Jefri said any officer who is responsible for debt recovery may be held liable if revenue becomes irrecoverable due to delay in enforcing collection of payment. If any public debt is written off by reason of neglect or fault of any officer, he may be liable to a surcharge under the government's financial regulations.

However, the senior counsel added that recovering debt through legal action should always be a last resort. "It is like trying to recover something which is already going to be difficult to recover. It is better to be proactive and not allow the debt to accumulate."

The government is already undertaking several measures to prevent debt from accumulating, according to Jefri. "If government rents out properties, we take three months deposits and that's the extent of our tolerance. If three months' rent is not paid we would then advise them to terminate the contract and get another tenant."

"Alternatively, you can start the claim while the person is still there because if you let it go on too long the guy may be not be there anymore and you've got to do the chasing." Each government department also has an internal debt collection policy, he added, usually giving three notices before referring a case to AGC for court action.