Privacy Act of 1974; New System of Records

DEPARTMENT OF VETERANS AFFAIRS

Privacy Act of 1974; New System of Records

AGENCY: Department of Veterans Affairs.

ACTION: Notice of new system of records.

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SUMMARY: The Privacy Act of 1974 (5 U.S.C. 522a(e)(4)) requires that

all agencies publish in the Federal Register a notice of the existence

and character of their systems of records. Notice is hereby given that

the Department of Veterans Affairs (VA) is adding a new system of

records entitled ``Accounts Receivable Records--VA'' (88VA20A6).

DATES: Interested persons are invited to submit written comments,

suggestions or objections regarding the proposed system of records. All

relevant materials received before December 5, 1994, will be

considered. All written comments received will be available for public

inspection in Room 119 of the address given below, only, between 8 a.m.

and 4:30 p.m., Monday through Friday (except holidays) until December

13, 1994. If no public comment is received during the 30-day review

period allowed for public comment, or unless otherwise published in the

Federal Register by VA, the new system of records, and the routine use

statements included therein, are effective December 5, 1994.

ADDRESSES: Written comments concerning the proposed routine uses may be

mailed to the Secretary, Department of Veterans Affairs (271A), 810

Vermont Avenue, NW., Washington, DC 20420.

FOR FURTHER INFORMATION CONTACT:

Daniel D. Osendorf, Director, Debt Management Center (389/00), U.S.

Department of Veterans Affairs, Bishop Henry Whipple Federal Building,

1 Federal Drive, Ft. Snelling, Minnesota 55111, (612) 725-1844.

SUPPLEMENTARY INFORMATION: The Veterans Benefits Administration is

responsible for collecting debts resulting from individuals'

participation in certain programs administered by VA. These programs

include--but are not limited to--compensation, pension, educational

allowance, guaranteed and direct home loans as well as education loans.

VA established the Centralized Accounts Receivable System (CARS) in

1975 as a pilot project for automation of debt collection and

indebtedness record retrieval. At the time, and for a number of years

after, collection activity was shared among the Centralized Accounts

Receivable Division (CARD)--a division of the VA Regional Office and

Insurance Center in St. Paul, Minnesota--and the 58 individual VA

regional offices. Generally, collection techniques were limited to

written requests for payment and referral for litigation to the United

States Attorneys. CARD collected only certain categories of debts while

the regional offices had responsibility for the remaining categories.

Methods of locating delinquent debtors were relatively expensive and

labor-intensive.

Since the inception of the CARS pilot project, additional means of

automated collection and locating debtors have either been authorized

or made available by new technologies. Chief among the vehicles

broadening the scope of debt collection authority was the Debt

Collection Act of 1982 (Pub. L. 97-365). The Act authorized disclosure

of personal information to consumer reporting agencies, made possible

disclosure of taxpayer mailing addresses to creditor agencies and

authorized disclosure of debtor information for purposes of

administrative and Federal salary offset. Since the enactment of Pub.

L. 97-365, new technologies have enabled creditor agencies to pursue

authorized collection activities with increased efficiency and

innovative methods. These methods, in many cases, involve some form of

computer matching. Among the new technologies is the Credit Alert

Interactive Voice Response System (CAIVRS). This is an automated

telephone system enabling participating Government agencies to verify

information provided by new loan applicants. Information for CAIVRS is

retrieved from an automated data base.

In 1990 and 1991, VBA debt collection activities for major benefit

programs were, for the most part, consolidated under one automated

system--CARS--and one organization--Debt Management Center (DMC), The

Director, DMC, reports directly to the VBA Chief of Staff. CARS is,

now, the system of record for indebtedness accounts resulting from

participation in all major VBA programs, except the All-Volunteer Force

Educational Assistance Program (38 U.S.C. ch. 30 and 10 U.S.C. ch.

106). While that program's indebtedness records are maintained on a

personal computer system, certain ch. 30/106 debt-related computer

matching services are performed by DMC through CARS.

With the new means of collection and locating debtors developed

over the years, computer matching with other Government agencies has

become a significant part of the routine activity conducted by DMC.

Computer matching using CARS data is performed in accordance with the

provisions of the Privacy Act of 1974 (5 U.S.C. 552a), as amended.

Disclosures are made as routine uses under Privacy Act systems of

records 58VA21/22, ``Compensation, Pension, Education and

Rehabilitation Records-VA'', and 55VA26, ``Loan Guaranty Home,

Condominium and Manufactured Home Loan Applicant Records, Specially

Adapted Housing Applicant Records, and Vendee Loan Applicant Records-

VA''. Typically, the responsibility for revising or introducing new

routine uses associated with debt collection falls upon program staff

who are not directly responsible for debt collection operations.

This new system of records is being established to reflect the

centralized environment VBA continues to build for collection activity

as well as to provide the public with one reference for routine use

disclosures related to debt collection. The debt collection program

adheres to VA security and reporting requirements under title 38, Code

of Federal Regulations and other Federal regulations, as well as the

Privacy Act of 1974, as amended (5 U.S.C. 552a), and the appropriate

provisions of the Internal Revenue Code, title 26, United States Code.

Approved: October 27, 1994.

Jesse Brown,

Secretary of Veterans Affairs.

88VA20A6

Accounts Receivable Records-VA.

Automated indebtedness records for compensation, pension,

educational assistance, survivors' and dependents' educational

assistance and home loan debts are maintained at the VA's Austin

Automation/Systems Development Center in Texas. Extracts of those

automated records are maintained in the Benefits Delivery Network for

accounting and adjudication purposes. The Benefits Delivery Network is

administered by the Benefit Delivery Center, Hines, Illinois. Certain

paper records, microfilm and microfiche are maintained at the VA Debt

Management Center (DMC), Ft. Snelling, Minnesota. Education loan

automated, paper, microfilm and microfiche records are maintained at

DMC. Automated and paper indebtedness records related to the All-

Volunteer Force Educational Assistance Program are also maintained at

DMC. Paper records related to accounts receivable may be maintained in

individual file folders located at the VA regional office having

jurisdiction over the domicile of the claimant or the geographic area

in which a property securing a VA guaranteed, insured or direct loan is

located. Generally, such papers maintained at regional offices are not

used directly in the debt collection process unless they are forwarded

by conventional mail, electronic mail or facsimile to DMC. Records

provided to the Department of Housing and Urban Development (HUD) for

inclusion in the Credit Alert Interactive Voice Response System

(CAIVRS) are located at the HUD Data Processing Center in Lanham,

Maryland.

Persons indebted to the United States Government as a result of

their participation in benefit programs administered by VA under title

38, United States Code, chapters 11, 13, 15, 21, 30, 31, 34, 35, 36 and

37, including persons indebted to the United States Government by

virtue of their ownership of property encumbered by a VA-guaranteed,

insured, direct or vendee loan. Persons indebted to the United States

Government as a result of their participation in a benefit program

administered by VA under 10 U.S.C. ch. 106. Persons who received

benefits or services under 38 U.S.C. or 10 U.S.C. ch. 106, but who did

not meet the requirements for receipt of such benefits or services.

Information varies depending on the benefit or home loan program

from which the debt arose. Identifying information, including VA claim

number, Social Security number, name and address and, when appropriate,

loan reference number obtained from the ``Compensation, Pension,

Education and Rehabilitation Records-VA'' (58VA21/22) and ``Loan

Guaranty Home, Condominium and Manufactured Home Loan Applicant

Records, Specially Adapted Housing Applicant Records, and Vendee Loan

Applicant Records-VA'' (55VA26) systems of records. Initial

indebtedness amount, type of benefit from which the debt arose,

identifying number of the VA regional office with jurisdiction over the

underlying benefit claim or property subject to default or foreclosure,

name of co-obligor and property address of the defaulted home loan from

58VA21/22 and 55VA26. History of debt collection activity on the

individual, including correspondence, telephone calls, referrals to

other Government agencies, VA district counsel, private collection and

credit reporting agencies. Payments received, refunds made, interest

amount, current balance of debt and indication of status of current VA

benefit payments. Federal employment status obtained by computer

matching with Government agencies and the United States Postal Service.

Title 38, United States Code, sections 501(a), 5314 and 5315.

Federal Claims Collection Act of 1966 (Pub. L. 89-508), 31 U.S.C.

Chapter 37, Subchapter I (General) and Subchapter II (Claims of the

United States Government), 31 U.S.C. 3711, Collection and Compromise,

31 U.S.C. 3716, Administrative Offset; Debt Collection Act of 1982

(Pub. L. 97-365), 5 U.S.C. 5514, Installment Deduction for

Indebtedness.

For purposes of the following routine uses:

(a) The term, veteran, includes present, former or retired members

of the United States Armed Forces, the reserve forces or national

guard; and,

(b) The term, debtor, means any person falling within the

categories of individuals covered by this system, as set forth above. A

debtor may be a veteran, as defined above, a veteran's dependent

entitled to VA benefits in his or her own right or a person who is

neither a veteran nor a veteran's dependent for benefit purposes.

1. The record of an individual who is covered by this system may be

disclosed to a member of Congress or staff person acting for the member

when the member or staff person requests the record on behalf of and at

the written request of that individual.

2. Any information in this system may be disclosed to a Federal

agency, upon its official request, to the extent that it is relevant

and necessary to that agency's decision regarding: The hiring,

retention or transfer or an employee; the issuance of a security

clearance: the letting of a contract or the issuance or continuance of

a license, grant or other benefit given by that agency. However, in

accordance with an agreement with the U.S. Postal Service, disclosures

to the U.S. Postal Service for decisions concerning the employment of

veterans will only be made with the veteran's prior written consent.

3. Any information in this system may be disclosed, by computer

matching or otherwise, in connection with any proceeding for the

collection of an amount owed the United States by virtue of a person's

participation in any benefit program administered by VA when in the

judgment of the Secretary, or official generally delegated such

authority under standard agency delegation of authority rules (38 CFR

2.6), such disclosure is deemed necessary and proper in accordance with

38 U.S.C. 5701(b)(6).

4. The name and address of a veteran or the dependent of a veteran

and other information as is reasonably necessary to identify such

veteran or dependent may be disclosed to a consumer reporting agency

for the purpose of locating the veteran or dependent indebted to the

United States under a VA benefit program or to obtain a consumer report

in order to assess the ability of a veteran or dependent to repay an

indebtedness, provided the disclosure is consistent with 38 U.S.C.

5701(g)(2).

5. The name and address of a veteran or dependent, other

information as is reasonably necessary to identify such persons,

including personal information obtained from other Federal agencies

through computer matching programs, and any information concerning the

person's indebtedness to the United States by virtue of the person's

participation in a VA benefit program may be disclosed to a consumer

reporting agency for purposes of making such information available for

inclusion in consumer reports regarding that person and for purposes of

locating that person, provided that the provisions of 38 U.S.C.

5701(g)(4) have been met.

6. Any information is this system, including available identifying

information regarding a person, such as the person's name, address,

Social Security number, VA insurance number, VA claim number, VA loan

number, date of birth and employment information, may be disclosed,

except to consumer reporting agencies, to a third party in order to

obtain current name, address and credit report in connection with any

proceeding for the collection of an amount owed the United States by

virtue of the person's participation in a VA benefit program. Such

disclosure may be made in the course of computer matching having the

purpose of obtaining the information indicated above. Third parties may

include other Federal agencies, State probate courts, State drivers'

license bureaus, State automobile title and license bureaus and private

commercial concerns in the business of providing the information

sought.

7. Identifying information, including the debtor's name, Social

Security number and VA claim number, along with the amount of

indebtedness, may be disclosed to any Federal agency, including the

U.S. Postal Service, in the course of conducting computer matching to

identify and locate delinquent debtors employed by or receiving

retirement benefits from those agencies. Such debtors may be subject to

offset of their pay or retirement benefits under the provisions of 5

U.S.C. 5514.

8. Any information in this system, including the nature and amount

of a financial obligation as well as the history of debt collection

activity against a debtor, may be disclosed to the Federal agency

administering salary or retirement benefits to the debtor to assist

that agency in initiating offset of salary or retirement benefits to

collect delinquent debts owed the United States under VA benefit

programs.

9. The name(s) and address(es) of a veteran or beneficiary may be

disclosed to another Federal agency or to a contractor of that agency,

at the written request of the head of that agency or designee of the

head of that agency for the purpose of conducting Government research

or oversight necessary to accomplish a statutory purpose of that

agency.

10. Any information in the system, including the amount of debt,

may be disclosed at the request of a debtor to accredited service

organizations, VA-approved claims agents and attorneys acting under a

declaration of representation so that these individuals can aid persons

indebted to VA in the preparation, presentation and prosecution of

debt-related matters under the laws administered by VA. The name and

address of a debtor will not, however, be disclosed to these

individuals under this routine use if the debtor has not requested the

assistance of an accredited service organization, claims agent or any

attorney.

11. Any information in this system such as the amount of

indebtedness and collection history may be disclosed in the course of

presenting evidence to a court, magistrate or administrative authority

in matters of guardianship, inquests and commitments, to private

attorneys representing debtors rated incompetent in conjunction with

issuance of Certificates of Incompetence and to probation and parole

officers in connection with court-required duties.

12. Any information in this system, including the amount of

indebtedness and history of collection activity, may be disclosed to a

VA- or court-appointed fiduciary or a guardian ad litem in relation to

his or her representation of a debtor only to the extent necessary to

fulfill the duties of the fiduciary or guardian ad litem.

13. Any relevant information in this system may be disclosed to the

Department of Justice and United States Attorneys in the defense or

prosecution of litigation involving or pertaining to the United States.

Any relevant information in this system may also be disclosed to other

Federal agencies upon their request in connection with review of

administrative tort claims and potential tort claims filed under the

Federal Tort Claims Act, 28 U.S.C. 2672, the Military Claims Act, 10

U.S.C. 2733 and other similar claims statutes.

14. Any information concerning a person's indebtedness to the

United States by virtue of that person's participation in a benefit

program administered by VA, including personal information obtained

from other Federal agencies through computer matching programs, may be

disclosed to any third party, except consumer reporting agencies, in

connection with any proceeding for the collection of any amount owed to

the United States. Purposes of these disclosures may be to (a) assist

VA in collection of title 38 and 10 U.S.C. ch. 106 program debts and/or

costs of services, and (b) initiate legal actions for prosecuting

individuals who willfully or fraudulently obtain title 38 or 10 U.S.C.

ch. 106 benefits without entitlement.

15. The debtor's name, address, Social Security number and the

amount (excluding interest) of any indebtedness waived, compromised or

written off may be disclosed to the Treasury Department, Internal

Revenue Service, as a report of income under 26 U.S.C. 61(a)(12).

16. The name of a debtor, any other information reasonably

necessary to identify such individual and any other information

concerning the individual's indebtedness under a VA program, may be

disclosed to the Treasury Department, Internal Revenue Service, for the

collection of that indebtedness by offset of Federal income tax refunds

pursuant to 31 U.S.C. 3720A.

17. Debtors' social security numbers, VA claim numbers, loan

account numbers and other information as is reasonably necessary to

identify individual VA indebtedness accounts may be disclosed to the

Department of Housing and Urban Development for inclusion in the Credit

Alert Interactive Voice Response System (CAIVRS). Information in CAIVRS

may be disclosed to all participating agencies and lenders who

participate in the agencies' programs to enable them to verify

information provided by new loan applicants and evaluate the

creditworthiness of applicants. Records are disclosed to participating

agencies and private-sector lenders by an ongoing computer matching

program.

18. Name, Social Security numbers and any other information

reasonably necessary to ensure accurate identification may be disclosed

to the Department of the Treasury, Internal Revenue Service, to obtain

the mailing address of taxpayers who are debtors under this system of

records. Disclosure is made by computer matching and pursuant to 26

U.S.C. 6103(m)(2).

19. Any information in a record under this system of records may be

disclosed to the United States General Accounting Office (GAO) to

enable GAO to pursue collection activities authorized to that office or

any other activities within their statutory authority.

Disclosures pursuant to 5 U.S.C. 552a(b)(12) may be made from this

record system to consumer reporting agencies as defined in the Fair

Credit Reporting Act (15 U.S.C. 1681a(f)) or the Federal Claims

Collection Act of 1966 (31 U.S.C. 3701(a)(3)). The disclosure is

limited to information necessary to establish the identity of the

individual, including name, address, and taxpayer identification number

(Social Security number), the amount, status and history of the claim;

and the agency or program under which the claim arose for the sole

purpose of allowing the consumer reporting agency to prepare a

commercial credit report. 38 U.S.C. 5701(g) governs the release of

names and addresses of any person who is a present or former member of

the Armed Forces, or who is a dependent of such a person, to consumer

reporting agencies under certain circumstances. Routine uses, above,

provide for disclosure under those circumstances.

Records are maintained on magnetic tape and disk, microfilm,

microfiche, optical disk and paper documents. DMC does not routinely

maintain paper records of individual debtors in file folders with the

exception of correspondence, and replies thereto, from Congress, the

White House, members of the Cabinet and other similar sources. The

finance division of VARO St. Louis maintains certain debtor

correspondence in folders by terminal digit. Paper records related to

accounts receivable may be maintained in individual file folders

located at VA regional offices. Generally, such papers maintained

outside of DMC are not used directly in the debt collection process

unless they are first forwarded to DMC. Information stored on magnetic

media for most benefit debts may be accessed through a data

telecommunications terminal system designated as CAROLS (Centralized

Accounts Receivable On-Line System). Most CAROLS terminals are located

in DMC; however, VA regional offices generally each have one terminal

for inquiry purposes. Information stored on magnetic media and related

to the All-Volunteer Force Educational Assistance or education loan

debt collection programs may be accessed through personal computers.

Records provided to the Department of Housing and Urban Development for

inclusion in the Credit Alert Interactive Voice Response System

(CAIVRS) are maintained on magnetic media at the HUD Data Processing

Center in Lanham, Maryland. Identifying information, the amount of the

debt and benefit source of the debt may be stored on magnetic media in

records that serve as the database for the VA Benefits Delivery Network

(BDN). The BDN is operated for the adjudication of claims and the entry

of certain fiscal transactions. The identifying information, the amount

of the debt and benefit source of the debt are transmitted to the

Centralized Accounts Receivable System (CARS) or a personal computer

local area network system before collection activity commences. When a

debtor is awarded gratuitous benefits under VA programs, the BDN may

operate to offset all or part of retroactive funds awarded, if any, to

reduce the balance of the indebtedness.

Paper documents, microfilm and microfiche are indexed by VA file

number or date of receipt. Automated records are indexed by VA claim

number, Social Security account number, name and loan account number in

appropriate circumstances. Records in CAIVRS may only be retrieved by

Social Security number.

1. Physical Security: (a) Access to working spaces and document

storage areas in DMC is restricted by cipher locks and to VA employees

on a need-to-know basis. Generally, document storage areas in VA

offices other than DMC are restricted by VA employees on a need-to-know

basis. VA offices are generally protected from outside access by the

Federal Protective Service or other security personnel. Strict control

measures are enforced to ensure that access to and disclosure from

documents, microfilm and microfiche are limited to a need-to-know

basis. (b) Access to CAROLS data telecommunications terminals is by

authorization controlled by the site security officer. The security

officer is assigned responsibility for privacy-security measures,

especially for review of violation logs, information logs and control

of password distribution. (c) Access to data processing centers is

generally restricted to center employees, custodial personnel Federal

Protective Service and other security personnel. Access to computer

rooms is restricted to authorized operational personnel through

electronic locking devices. All other personnel gaining access to

computer rooms are escorted.

2. CAROLS and Personnel Computer Local Area Network (LAN) Security:

(a) Usage of CAROLS and LAN terminal equipment is protected by password

access. Electronic keyboard locks are activated on security errors. (b)

At the data processing centers, identification of magnetic media

containing data is rigidly enforced using labeling techniques.

Automated storage media which are not in use are stored in tape

libraries which are secured in locked rooms. Access to programs is

controlled at three levels: programming, auditing and operations.

3. CAIVRS Security: Access to the HUD data processing center from

which CAIVRS is operated is generally restricted to center employees

and authorized contact employees. Access to computer rooms is

restricted to authorized operational personnel through locking devices.

All other persons gaining access to computer rooms are escorted.

Records in CAIVRS use Social Security numbers as identifiers. Access to

information files is restricted to authorized employees of

participating agencies and authorized employees of lenders who

participate in the agencies' programs. Access is controlled by agency

distribution of passwords. Information in the system may be accessed by

use of a touch-tone telephone by authorized agency and lender employees

on a need-to-know basis.

Microfilm and microfiche are retained in metal cabinets in DMC for

25 years. CARS records are retained until termination of debt

collection (payment in full, write off, compromise or waiver). All

other automated storage media retained and disposed of in accordance

with disposition authorization approved by the Archivist of the Untied

States. DMC generally forwards all substantive paper documents to VA

regional offices for storage in claims files or loan files. Those

documents are retained and disposed of in accordance with the

appropriate system of records. Information provided to HUD for CAIVRS

is stored on magnetic tape. The tapes are returned to VA for updating

each month. HUD does not keep separate copies of the tapes.

Director, Debt Management Center (389/00), U.S. Department of

Veterans Affairs, Bishop Henry Whipple Federal Building, 1 Federal

Drive, Ft. Snelling, MN 55111.

An individual who wishes to determine whether a record is being

maintained in this system under his or her name or other personal

identifier, or wants to determine the contents of such record, should

submit a written request to the system manager indicated above.

Individuals seeking information regarding access to and contesting

of VA records may write, call or visit the nearest VA regional office.

Address locations are listed in VA Appendix 1.

See record access procedures, above.

The records in this system are derived from two other systems of

records as set forth in ``Categories of records in the system'', above,

persons indebted to the United States by virtue of their participation

in programs administered by VA, dependents of those persons,

fiduciaries for those persons (VA or court appointed), other Federal

agencies, States and local agencies, private collection agencies,

consumer reporting agencies, State, local and county courts and clerks,

other third parties and other VA records.

[FR Doc. 94-27268 Filed 11-2-94; 8:45 am]

BILLING CODE 8320-01