Supporting Statement for ICR 1660-0011 CLEAN 6-28-2020

July 16, 2019

Supporting Statement for

Paperwork Reduction Act Submissions

OMB Control Number: 1660 - 0011

Title: Debt Collection Financial Statement

Form Number(s): FEMA Form 127-0-1

General Instructions

A Supporting Statement, including the text of the notice to the public required by 5 CFR 1320.5(a)(i)(iv) and its actual or estimated date of publication in the Federal Register, must accompany each request for approval of a collection of information. The Supporting Statement must be prepared in the format described below, and must contain the information specified in Section A below. If an item is not applicable, provide a brief explanation. When Item 17 or the OMB Form 83-I is checked “Yes”, Section B of the Supporting Statement must be completed. OMB reserves the right to require the submission of additional information with respect to any request for approval.

Specific Instructions

A. Justification

1. Explain the circumstances that make the collection of information necessary.

Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information. Provide a detailed description of the nature and source of the information to be collected.

Under the Debt Collection Act as amended (31 U.S.C. §§ 3701, et. seq.), the Federal Claims Collection Standards (31 CFR Parts 900 - 904), and the Department of Homeland Security (DHS) regulations (6 CFR Part 11); the Administrator of the Federal Emergency Management Agency (FEMA) is: 1) required to attempt collection of all debts owed to the United States arising out of FEMA’s activities; and 2) authorized to compromise certain debts, or terminate a collection action completely, where it appears that no person is liable for such debt or has the present or prospective financial ability to pay a significant sum or that the cost of collecting such debt is likely to exceed the amount of the recovery (31 U.S.C. § 3711 (a) (2)).

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection. Provide a detailed description of: how the information will be shared, if applicable, and for what programmatic purpose.

FEMA Form 127-0-1, Debt Collection Financial Statement , is a form that collects information provided by the debtor and estimates the current and future ability of a debtor to pay their debt. FEMA uses the form to evaluate the debtor’s financial condition in making determination of whether termination of debt collection activity, or compromise of some or all of the value of the debt, is appropriate. This financial information is essential to meeting the requirements set forth in applicable regulations and to appropriately apply the various collection standards.

This information allows FEMA to review and discuss with debtors their financial resources in an attempt to resolve their debt. FEMA also uses this data to determine whether alterations to established installment payment agreements should be allowed based on a significant change in the debtor’s ability to pay and comply with the terms of the agreement.

enforcement.

000.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration of using information technology to reduce burden.

FEMA Form 127-0-1 is available to debtors upon request but is not submitted online. Debtors may call the following number listed on the Notice of Debt Letter (NDL) to request the FEMA Form 127-0-1: (800) 816-1122. The form will be mailed to the respondents for completion. Once the debtor completes the form, he or she returns the form and supporting documentation to FEMA (National Processing Service Center, P.O. Box 10055, Hyattsville, MD 20782-8055) by USPS or fax (800-827-8112).

FEMA staff will upload the debtor’s response in the National Emergency Management Information System (NEMIS).

Current and former FEMA employees may use this form to request a compromise or payment plan for an employee debt. FEMA employees will send the completed form to the FEMA Finance Center (FFC) (FEMA Finance Center, Accounts Receivable, P.O. Box 9001, Winchester, VA 22604) by USPS or fax (540-504-2288). The FFC will scan the documents into FEMA’s SharePoint system for processing.

FEMA staff documents the information in FEMA’s financial system for accounts receivable including: the debtor’s request for a payment plan or compromise, the debtor’s response to FEMA’s request for financial information (RFI) packet that includes the FEMA Form 127-0-1, the progress of the evaluation of the debtor’s eligibility for a payment plan or compromise based on the debtor’s ability to pay, and the disposition of the debt resolution evaluation. Only authorized FEMA staff have access to this information.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above. 

This information is not collected in any other form or process, and therefore is not duplicated elsewhere.

5. If the collection of information impacts small businesses or other small entities (Item 5 of OMB Form 83-I), describe any methods used to minimize.

This information collection does not have an impact on small businesses or other small entities.

6. Describe the consequence to Federal/FEMA program or policy activities if the collection of information is not conducted, or is conducted less frequently as well as any technical or legal obstacles to reducing burden.

FEMA would be unable to appropriately adjudicate requests for compromise or a payment plan without having the debtor’s financial resources to assist with resolving their debt. FEMA also uses this data to determine whether alterations to established installment payment agreements should be allowed based on a significant change in the debtor’s ability to pay and comply with the terms of the agreement.

FEMA would also be unable to appropriately adjudicate requests for compromise or a payment plan for an employee debt without this financial information.

Through the use of the data provided to evaluate debtor’s ability to pay, FEMA is able to recoup significantly higher numbers of debts and amounts through installment repayment agreements. Without the data provided on the financial statements, FEMA would not be able to proficiently negotiate such agreements and would have to use other, less effective and/or more costly methods of collection. In addition, if FEMA did not maintain accounts receivable tracking capabilities and, when appropriate, collect this necessary financial data, FEMA would not be cognizant of the debtor’s financial situation when receivables become debts. FEMA would not be able to negotiate equitable installment repayment agreements if this information was eliminated.

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

1. Requiring respondents to report information to the agency more often than quarterly.

 (b) Requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it.

3. Requiring respondents to submit more than an original and two

copies of any document.

3. Requiring respondents to retain records, other than health,

medical, government contract, grant-in-aid, or tax records for more than three years.

3. In connection with a statistical survey, that is not designed to

produce valid and reliable results that can be generalized to the universe of study.

 (f) Requiring the use of a statistical data classification that has not

been reviewed and approved by OMB.

 (g) That includes a pledge of confidentiality that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use.

 (h) Requiring respondents to submit proprietary trade secret, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information’s confidentiality to the extent permitted by law.

The special circumstances contained in item 7 of the supporting statement are not applicable to FEMA’s debt collection financial information collection.

8. Federal Register Notice: 

 a. Provide a copy and identify the date and page number of publication in the Federal Register of the agency’s notice soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.

A 60-day Federal Register Notice inviting public comments was published on July 19, 2019, 84 FR 34918. No comments were received.

A 30-day Federal Register Notice inviting public comments was published on February 28, 2020, 85 FR 12001. One comment was received unrelated to the collection and did not require a response from the program office.

 b. Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.

FEMA debt collection specialists generally use telephone conversations with respondents to discuss the respondents’ financial condition and their ability to repay the debt using information from the Debt Collection Financial Statement, FEMA Form 127-0-1.

FEMA developed a Standard Operating Procedure (SOP) for its internal processes to formalize its debt collection process. FEMA determined that following current Federal processes such as the Federal Claims Collection Standards, the Debt Collections Act as amended, with the Treasury Cross-Servicing Program, remain the most effective methods to collect FEMA debts.

c. Describe consultations with representatives of those from whom information is to be obtained or those who must compile records. Consultation should occur at least once every three years, even if the collection of information activities is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.

FEMA’s consultations include telephone conversations with debtors and cover all aspects of the information collection.

9. Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.

FEMA does not provide payments or gifts to respondents in exchange for a benefit sought.

10. Describe any assurance of confidentiality provided to respondents. Present the basis for the assurance in statute, regulation, or agency policy.

A Privacy Threshold Analysis (PTA) was approved on April 18, 2019. A PIA for this collection was determined to be needed and has been forwarded to the FEMA Privacy Office for review. 

The Debt Collection Financial Statement (Form 127-0-1) is a privacy sensitive collection requiring Privacy Impact Assessment, PAIA coverage and System of Records Notice (SORN) coverage. This collection is covered by DHS/FEMA/PIA-027 National Emergency Information System Individual Assistance and DHS/FEMA/PIA-009(A) Document Management and Records Tracking System (DMARTS). The SORN coverage is DHS/ALL-008 Accounts Receivable System of Records, September 28,2015, 80 FR 58289.

11. Provide additional justification for any question of a sensitive nature (such as sexual behavior and attitudes, religious beliefs and other matters that are commonly considered private). This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.

There are no questions of sensitive nature beyond those which seek to identify respondents’ financial abilities to pay their debts and assist the Agency in determining whether it needs to craft special repayment plans unique to the individual.

 12. Provide estimates of the hour burden of the collection of information. The statement should:

 a. Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated for each collection instrument (separately list each instrument and describe information as requested). Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than 10) of potential respondents is desired. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. Generally, estimates should not include burden hours for customary and usual business practices.

It is estimated that 300 Individuals will complete FEMA Form 127-0-1 and that it will take 45 minutes (or 0.75 hours) to complete the form. The total annual hour burden will be 300 x 0.75 hours = 225 hours.

 b. If this request for approval covers more than one form, provide separate hour burden estimates for each form and aggregate the hour burdens in Item 13 of OMB Form 83-I.

c. Provide an estimate of annualized cost to respondents for the hour burdens for collections of information, identifying and using appropriate wage rate categories. NOTE: The wage-rate category for each respondent must be multiplied by 1.46 and this total should be entered in the cell for “Avg. Hourly Wage Rate”. The cost to the respondents of contracting out or paying outside parties for information collection activities should not be included here. Instead this cost should be included in Item 13.

Table A.12: Estimated Annualized Burden Hours and Costs
Type of Respondent	Form Name / Form Number	No. of Respon-dents	No. of Respon-ses per Respon-dent	Total No. of Responses	Avg. Burden per Response (in hours)	Total Annual Burden (in hours)	Avg. Hourly Wage Rate*	Total Annual Respondent Cost
Individuals or Households	Debt Collection Financial Statement/ FEMA Form 127-0-1	300	1	300	0.75	225	$36.47	$8,206
Total		300				225		$8,206

Instruction for Wage-rate category multiplier: Take each non-loaded “Avg. Hourly Wage Rate” from the BLS website table and multiply that number by 1.46. For example, a non-loaded BLS table wage rate of $42.51 would be multiplied by 1.46, and the entry for the “Avg. Hourly Wage Rate” would be $62.06.

According to the U.S. Bureau of Labor Statistics (https://www.bls.gov/oes/current/oes_nat.htm), the May 2018 National Industry-Specific Occupational Employment and Wage Estimates wage rate category for Individuals (Standard Occupational Classification 00-0000 All Occupations) is $24.98 per hour. Including the wage rate multiplier of 1.46,¹ the fully-loaded wage rate is an estimated $36.47 per hour. Therefore, the estimated annual burden hour cost is approximately $8,206 ($36.47 x 225 hours = $8,206).

13. Provide an estimate of the total annual cost burden to respondents or recordkeepers resulting from the collection of information. The cost of purchasing or contracting out information collection services should be a part of this cost burden estimate. (Do not include the cost of any hour burden shown in Items 12 and 14.)

The cost estimates should be split into two components:

a. Operation and Maintenance and purchase of services component. These estimates should take into account cost associated with generating, maintaining, and disclosing or providing information. Include descriptions of methods used to estimate major cost factors including system and technology acquisition, expected useful life of capital equipment, the discount rate(s), and the time period over which costs will be incurred.

b. Capital and Start-up-Cost should include, among other items, preparations for collecting information such as purchasing computers and software, monitoring sampling, drilling and testing equipment, and record storage facilities.

There are no record keeping, capital, state-up or maintenance costs associated with this information collection.

14. Provide estimates of annualized cost to the federal government. Also, provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing and support staff), and any other expense that would have been incurred without this collection of information. You may also aggregate cost estimates for Items 12, 13, and 14 in a single table.

Notes

FEMA’s estimate for the overall time to determine and set up a payment plan, obtain approval for the payment plan, print and mail the results of the decision, and archive the form for data collection is based on past estimates to review and evaluate a debtor’s financial information. All employees are assumed to work in Washington, DC.

A GS 9 Step 5 employee takes approximately 45 minutes (0.75 hours) to review the information with the applicant, generate a request for information (RFI) and upload the packet to NEMIS and an additional 90 minutes (1.5 hours) to evaluate the RFI. The senior analysts, usually GS 13 Step 5 and GS 14 Step 5 employees, take 10 minutes (0.17 hours) to review the information. A supervisor, usually a GS 15 step 5 employee, takes 5 minutes (0.08 hours) to conduct a final review.

Assuming each respondent submits one form, FEMA anticipates it will receive 300 forms. The total time a GS 9 employee spends is 675 hours (300 forms x 0.75 hours + 300 forms x 1.5 hours = 675 hours). The total time the senior analysts spend is 51 hours (300 forms x 0.17 hours = 51 hours). The total time the manager spends is 24 hours (300 forms x 0.08 hours = 24 hours).

The total cost to the federal government to administer and manage the required information collected with this activity are the costs associated with staff salaries, printing, and postage.

The 2018 Washington, DC hourly salaries for GS 9, Step 5 employee is $30.54; GS 13 Step 5, $52.66; GS 14 Step 5, $62.23; and, GS 15 Step 5, $73.20.² Including the wage rate multiplier of 1.46,³ the fully-loaded wage rates are $44.59, $76.88, $90.96, and $106.87, respectively.

Based on the GS 9 employee estimated time of 576 hours to review the information and evaluate the RFI, the cost to the federal government is $30,341 ($44.59 x 675 hours =$25,891). Based on the senior analysts estimated time of 51 hours to review the information, the cost to the federal government is $8,560 ($76.88 x 51 hours + $90.96 x 51 hours = $8,560). Based on the manager’s estimated time of 24 hours, the cost to the federal government is $ 2,565 ($106.87 x 24 hours = $2,565). Thus, the total cost of the federal employees’ salaries is $41,466 ($30,341 +$8,560 + $ 2,565 = $41,466).

Assuming the cost to print each form is $0.10 and FEMA receives 300 forms, the cost to print the forms is $30 ($0.10 x 300 forms = $30).

Assuming the cost for postage is $0.55 and FEMA receives 300 forms, the cost to mail the forms is $165 ($0.55 x 300 forms = $165).

The annualized cost to the federal government represents the sum of federal employees’ salaries and cost to print and mail the form. The annualized cost to the federal government is $41,661 ($41,466 + $165 + $10 = $41,661).

Annual Cost to the Federal Government
Item	Cost ($)
Salaries	$41,466
Facilities [cost for renting, overhead, etc. for data collection activity]
Computer Hardware and Software [cost of equipment annual lifecycle]
Equipment Maintenance [cost of annual maintenance/service agreements for equipment]
Travel
Printing [number of data collection instruments annually]: 300 forms x $0.10 per from = $30	$ 30
Postage [annual number of data collection instruments x postage]: 300 forms x $0.55 = $165	$ 165
Other
Total	$41,661

 15. Explain the reasons for any program changes or adjustments reported in Items 13 or 14 of the OMB Form 83-I in a narrative form. Present the itemized changes in hour burden and cost burden according to program changes or adjustments in Table 5. Denote a program increase as a positive number, and a program decrease as a negative number.

A "Program increase" is an additional burden resulting from a federal government regulatory action or directive. (e.g., an increase in sample size or coverage, amount of information, reporting frequency, or expanded use of an existing form). This also includes previously in-use and unapproved information collections discovered during the ICB process, or during the fiscal year, which will be in use during the next fiscal year.

A "Program decrease", is a reduction in burden because of: (1) the discontinuation of an information collection; or (2) a change in an existing information collection by a Federal agency (e.g., the use of sampling (or smaller samples), a decrease in the amount of information requested (fewer questions), or a decrease in reporting frequency).

"Adjustment" denotes a change in burden hours due to factors over which the government has no control, such as population growth, or in factors which do not affect what information the government collects or changes in the methods used to estimate burden or correction of errors in burden estimates.

Itemized Changes in Annual Burden Hours
Data collection Activity/Instrument	Program Change (hours currently on OMB Inventory)	Program Change (New)	Difference	Adjustment (Hours currently on OMB Inventory)	Adjustment (New)	Difference
Debt Collection Financial Statement						0
FEMA Form 127-0-1	300	0		x	0	0
Total						0

Explain:

There is no change from previous process with the reinstatement of this form.

16. For collections of information whose results will be published, outline plans for tabulation and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.

There are no plans for tabulation and publication of data for this information collection.

17. If seeking approval not to display the expiration date for OMB approval of the information collection, explain reasons that display would be inappropriate.

This collection does not seek approval to not display the expiration date for OMB approval.

18. Explain each exception to the certification statement identified in Item 19 “Certification for Paperwork Reduction Act Submissions,” of OMB Form 83-I.

 This collection does not seek exception to Certification for Paperwork Reduction Act Submissions. This collection does not use efficient statistical survey methodology or use of information technology.  Statistical Survey methodology is not applicable. Question #3 in the supporting statement justifies the non-use of information technology.

1 U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, Table 1.  “Employer costs per hour worked for employee compensation and costs as a percent of total compensation:  Civilian workers, by major occupational and industry group, December 2018.”  Available at http://www.bls.gov/news.release/pdf/ecec.pdf.  Accessed July 15, 2019.  The wage multiplier is calculated by dividing total compensation for all workers of $36.77 by wages and salaries for all workers of $25.22 per hour yielding a benefits multiplier of approximately 1.46.

2 The hourly federal salaries, including locality pay, for the Washington, DC area can be found online at: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2018/DCB_h.pdf .

3 U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, Table 1.  “Employer costs per hour worked for employee compensation and costs as a percent of total compensation:  Civilian workers, by major occupational and industry group, December 2018.”  Available at http://www.bls.gov/news.release/pdf/ecec.pdf.  Accessed July 15, 2019.  The wage multiplier is calculated by dividing total compensation for all workers of $36.77 by wages and salaries for all workers of $25.22 per hour yielding a benefits multiplier of approximately 1.46.

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