[Federal Register Volume 59, Number 212 (Thursday, November 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27268]


[[Page Unknown]]

[Federal Register: November 3, 1994]


-----------------------------------------------------------------------


DEPARTMENT OF VETERANS AFFAIRS
 

Privacy Act of 1974; New System of Records

AGENCY: Department of Veterans Affairs.

ACTION: Notice of new system of records.

-----------------------------------------------------------------------

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