One area of judicial operations that reveals an abundance of opportunity when viewed through this type of lens is the

collection and enforcement of court-ordered fines and restitution.

Fines and Restitution

Collecting by Investing
By Paul B. Litschewski
Warren Buffett once said, It is not necessary to do extraordinary things to get extraordinary results. Buffett has found remarkable success by combining his understanding of business with his wisdom in recognizing opportunities that have the potential to yield superior returns. Just about any endeavor, not just those related to the mood on Wall Street, can be looked at through an investment lens, whether the
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investment is of time, skills, dollars, or other resources. One area of judicial operations that reveals an abundance of opportunity when viewed through this type of lens is the collection and enforcement of court-ordered fines and restitution. Much has been written about criminal fines and restitution and the roles they play in deterrence, punishment, and the restoration of

victims and society. The importance of enforcing compliance with these monetary sanctions is well established, with most agreeing that neglecting to do so erodes the credibility and integrity of the criminal justice system. Despite these acknowledgments, there is often a lack of inertia and follow-through by policymakers and managers to capitalize on time-tested practices and other opportunities to strengthen collections.

Courts throughout the United States ponder the unending streams of offenders who, for one reason or another, avoid paying their fines and restitution. Other countries share the frustration. For example, a recent article in a news publication out of London stated, Chances are the people who dont pay their fines are repeat offenders. One can only conclude that those who dont pay also dont learn or dont feel compelled to follow the rules most of us abide by in our daily lives. The State of Colorado continues to forge ahead in its commitment to holding offenders accountable for their court-ordered financial obligations. A 1991 Court Manager article, Getting a Grip on Court Collections, described the Colorado Judicial Departments collections program, its initial results, and its designs for the future. The passage of 20 years allows the opportunity to review how the program has matured, as well as to visit how investments in people, collaboration, and tools have paid solid dividends.

permission to spread out payment of their court obligations over a period of weeks, months, or years (or simply allege an inability to pay anything at all). The collections investigators meet face-to-face with these individuals to: a) Problem solve and discuss any resources and options the offender has that would allow for immediate, full payment; b) Gather financial and other personal data to obtain a complete picture of the offenders ability to pay; c) Limit the duration of any payment plan to the shortest, reasonable time frame. Experience has shown that many offenders pay, in full, simply to avoid disclosing their financial information and the associated interview by the collections investigator. Those who do receive payment plans are given a very clear message that compliance is expected and, possibly even more impactful, that someone will notice if a payment is missed. Colorados collections investigator staffing level is currently 83 full-time equivalents (FTE), allocated across all 22 of the states judicial districts and serving the county and district courts as well as the county probation departments. The costs associated with these employees are covered by specific assessments paid by offenders and earmarked for this purpose. Staffing has grown incrementally over the last 20 years, enabling the program to keep pace with increased case volume, implement a broader range of tools, and expand coverage beyond traffic and misdemeanor cases to felony matters, which bring higher balances and greater degrees of complexity. Studies along the way have demonstrated the significant gains to be achieved by incorporating specialized

collection staff. From a cost-benefit standpoint, this model fairs very well. As positions were added over the years, they unfailingly brought in new revenue that greatly exceeded the cost of the employees (as high as 10 times greater in some instances).

Investing in Collaboration and Bringing Players Together

Collaboration among the various players and stakeholders is critical to adopting thoughtful processes that will meet a variety of needs. In Colorado, the investment in a proactive collection process began in the 1980s when people at various levels in the system united to address the exploding volume of unpaid fines and restitution. Not surprisingly, skepticism and a certain amount of resistance to change crept in, but these concerns quickly dissolved as pilot programs began to show promise and, ultimately, yielded increased compliance. Over the years, the collections program has become highly integrated into local court and probation operations. At its most basic level, the strategy employed can be summed up as follows: Full payment from offenders is expected upon sentencing unless there are extenuating circumstances. Offenders are not automatically granted payment plans. Instead, there must be a demonstrated need determined through a financial investigation. A range of procedures and mechanisms are in place to monitor and expedite collections. Support and investment in the process has also come from district attorneys and victim advocates.
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Investing in People and Capitalizing on Their Impact

A common thread emerges when one conducts national research into court systems that are enjoying sustained increases in payment compliance. They have often invested in employees who are specifically assigned and accountable for the monitoring and collection of fines and restitution. It takes a person, not a form or a procedure, to challenge and work with an offender in order to find payment solutions. In Colorado, collections investigator positions fill this need, managing the approximate 200,000 offenders per year who request

success in collecting fines and restitution is driven, in large part, by the availability and use of offender-specific information, which can provide a roadmap to the offenders unique avenues for payment.

Prosecutors now have increased confidence that penalties and sanctions will be enforced when there are convictions, and the prospects that restitution will be recovered are higher than ever. Crime victims have been major beneficiaries of the enhanced collection efforts, with nearly 50 percent of the total dollars paid by offenders going toward restitution or local programs that offer aid and assistance to victims. Investment in this process has also been reflected in the general assemblys actions, writing into law numerous effective tools and ensuring that collection efforts are funded. Executive branch agencies have also played an integral role, partnering with the courts to implement processes such as tax refund intercepts that have captured millions in recoveries from offenders.

Investing in Tools and Making Life Easier

Generally, the implementation of some very basic tools will go far in expediting the collection of fines and restitution. Oftentimes, the most effective tool (if one can call it that) is simply telling the offender that he or she is expected to pay immediately. Your total balance is due today. Please pay the cashier. These simple words can serve as an effective first line of defense in reducing the throngs of

offenders expecting the court to allow them to pay later, even though they very possibly have the ability to pay now. An inventory of ideas can be assembled by looking at other jurisdictions, researching other governmental operations facing similar collection challenges (e.g., child support enforcement), or borrowing ideas from private industry. In addition, the National Center for State Courts offers a wide range of information and excellent advice concerning this topic. Colorado has tapped into these resources over the years and adopted an array of tools that have coalesced into a multi-faceted approach, which is able to accommodate a variety of case circumstances. Certainly, the staples of any effective collections protocol past due notices, phone calls, etc. are a good starting point with proven results. The following tools require a more serious investment of time and resources but have proven track records in Colorados system: Information Gathering Tools Attachments of Earnings Intercepts Drivers License Suspensions Private Collection Agencies Online Payments Automated Tracking Each of these is discussed below.

Information Gathering tools

Success in collecting fines and restitution is driven, in large part, by the availability and use of offenderspecific information, which can provide a roadmap to the offenders unique avenues for payment. Of paramount importance is a written, financial disclosure that requires the offender to detail and certify his or her personal financial status in order to demonstrate eligibility for a payment plan. Examination of the disclosure, with any necessary verification of the statements made by the applicant, either ends in denial of the request or in the granting of a payment plan that reflects the offenders financial ability. Colorado courts use both basic as well as highly in-depth disclosure forms, with the latter typically being used in large balance restitution cases. Research and verification of information such as addresses, wages, and property and vehicle ownership is facilitated by intergovernmental data sharing. While many of us bemoan the diminishing level of privacy in todays world, from the point of view of locating offenders who are dodging their obligations, Internet-based investigation tools have left them with far fewer ways to hide. A growing number of no-cost sites often provide sufficient data and leads. Although, for more complex searches, it is often worth the relatively small fee charged.

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For the collections investigators, determining if an offender has multiple obligations or a history of court activity throughout the state requires only a few keystrokes. Colorado is fortunate to have a single, statewide computer system for court case processing and management, which provides interconnectivity from one county to the next.

attachments of earnings
While property liens and bank account garnishments have certainly found their place in the enforcement of fines and restitution, Colorados statutory attachment of earnings (AOE) is turned to most frequently due to its simplicity and effectiveness. The general assembly passed legislation in 1996 creating the AOE, which is similar to the administrative wage assignment commonly issued by child support enforcement units. Up to 50 percent of an offenders earnings are subject to attachment, although collections investigators often set the percentage lower based on the specific case circumstances. Approximately 25,000 AOEs are issued annually, with the return being an estimated $3 to $5 million.

Intercepts
Like several other states, Colorado has invested in the development and adoption of several intercept programs to recover dollars owed to crime victims and the courts. Essentially, these programs operate under the premise that money should not be given over to an offender with one hand while the other hand is attempting to collect money owed by that same offender simple, common sense! Over the last several years, the general assembly has

identified four areas in which dollars are to be intercepted: lottery winnings, unclaimed property, state income tax refunds, and gambling winnings. (The latter is currently under development.) Lottery and unclaimed property intercepts number about 100 per year, bringing in $60,000 annually. However, the state tax refund intercepts have yielded, by far, the biggest dividends. During 2005, the programs first year, the Colorado courts recovered $3 million through this enforcement mechanism. In 2010, more than $6 million came in. The practical impacts of this are far reaching. Nearforgotten cases are suddenly being paid, new revenue is available for a range of statutory purposes, and most importantly, crime victims who have been patiently awaiting restitution are being paid. In the last year alone, 40,000 court cases received payments from a tax refund intercept. Much to the relief of court accounting personnel, the high volume of payment transactions is managed through an automated posting process at the state court administrators office, which creates a receipt record in each offenders case. As one would expect, intercepts can and do generate a certain number of inquiries from the responsible parties, particularly in those instances in which the unpaid violation occurred a number of years ago. The use of a centralized hotline has provided an effective means to track and promptly respond to these inquiries. Only about 10 percent of the people whose refunds are intercepted call with questions. Typically these matters are quickly resolved by refreshing the callers memory about the citation he or she forgot to pay. While there is the occasional error or discrepancy, this programs track record for accuracy has been excellent.

Of course, there is not transferability of an intercept system such as this to states that do not have a state level income tax yet. This could change under proposed federal legislation that is gaining widespread support. Congress may consider establishing a federal income tax refund intercept program to assist the states in the enforcement of local level fines and restitution. The idea of taking the intercept tool to the federal level holds an enormous amount of promise and, if implemented, would tremendously bolster local efforts.

drivers License suspensions

Not many things can get a persons attention like a notice from the state warning that their drivers license is being suspended. Colorado, like many states, has employed this time-tested method, in cooperation with the division of motor vehicles, to enforce payments in traffic matters. Even if the offender has moved to another state, interstate data sharing of drivers license actions keeps them honest. One analysis showed that 55 percent of defaulted traffic infraction cases were subsequently paid within the 90-dayperiod following the default. The license suspension notification is credited with resolving many of these cases.

Private Collection agencies

While the majority of accounts can be collected through internal efforts, the use of private collection services still has its place in criminal collections, and Colorado has benefited from such partnerships. However, it is important that offenders be given the opportunity to resolve their court-ordered financial

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Online Payments
Without question, making it convenient to pay cant help but further collection efforts; hence, society has witnessed the advent of online payment systems for nearly any type of bill one can imagine. Recognizing the potential benefits, the Colorado Judicial Branch recently implemented such a process, which has been wildly embraced by the public. Online payments are skyrocketing while the traditional paper methods of check and money order represent half the volume they did five years ago. In todays world, the Internet can be accessed from just about anywhere. The ability of a person to log in and enter a credit card transaction wherever he or she might be removes a number of obstacles that could have prevented timely payment. For those who still prefer to make a payment in person, the line to the cashier has now become significantly shorter.

obligations directly with the court before introducing a third party to the mix. Placing the account with a private agency adds another layer of complexity to the case, as well as drives up costs to both the offender and the court. An arrangement, such as the one existing in Colorado, that provides for the agencys fees to be added to the debt, instead of being deducted from the proceeds, helps to minimize the impact on the court and allows victims to receive full restitution (as opposed to restitution less the agencys commission). Until the late 1990s, the Colorado courts had never contracted with private firms for fine and restitution collections and were always hesitant to consider it. However, some means to address stagnant accounts receivable needed to be developed. In 1997, a three-year pilot project was launched, in cooperation with several of the states judicial districts, in which placements were made to five collection agencies. Functional studies were conducted to determine how best to utilize the private sector services and what aspects of the overall collection process should be retained by the collections investigators. What emerged as the most practical approach was for accounts to be placed
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only after the courts had exhausted their internal remedies. The pilot projects demonstrated the viability of outsourcing as a way to augment existing efforts, and by 2001 this practice was adopted in every judicial district. Approximately $5 million per year is now being recovered through contracts with private firms. Eighty thousand placements were made by the Colorado courts and probation offices last fiscal year, and to-date, payments have been generated on 15 percent of those accounts. While this represents a small percentage, it is important to note that many, if not most, of the placements stemmed from highly elusive offenders with patterns of avoiding their obligations. Currently, there are seven collection agencies on the Colorado Judicial Departments eligible provider list, which was recently reestablished through the issuance of a request for proposals (RFP). Each district has the option to select one or more agencies from the list and may later modify their selections if they are not pleased with the performance. This model promotes competition amongst the providers, and as such, has increased their responsiveness to the courts needs.

automated tracking
Investing in an automated collections tracking system pays enormous dividends, not only in terms of dollars collected, but also in managing time and compiling data. The Colorado state courts and probation departments share a proprietary system (developed in-house) that offers a range of advanced capabilities related to case management, offender supervision, case financial processing, as well as collections. The use of automation in fine and restitution collections paves the way for accountability and uniformity. Under Colorados system, every balance owed is entered into the case financial record, which makes it easy to identify any case that needs collection action. Offender payment plans are stored online, as

are collector notes and a full history of any action taken. All cash registers are integrated into the system, automatically importing receipt data to the payment plan and distributing the proceeds to the appropriate statutory funds (victim fees, court costs, surcharges, supervision fees, etc.) A variety of letters and forms can be generated in addition to reports for workflow management and performance analysis. Vast amounts of information are stored, which facilitates the data matching programs previously discussed, other interagency file transfers, and online public access. With all of the systems sophistication, there is still yearning for even more features and functionality. To this end, user groups are currently brainstorming and specifications are being prepared for the next generation of software!

response-ability. With the investment in collection personnel combined with a strong process and wide range of tools, the judicial system enjoys newly created accountability, which in turn allows for a much more effective response at many levels to the challenges that come with enforcing monetary sanctions. This accountability takes several forms: Employees who take responsibility for the collection of each account; Managers who are better able to track collections performance and implement necessary changes; A judicial system in which court orders more effectively accomplish what they are expected to; Probably most importantly, offenders who are being held truly accountable to the courts, to their victims, and to society.

misinterpretation can often result, leading to misperceptions about the general level of compliance. Here is an example, based on Colorados Fiscal Year 200910 restitution orders, illustrating the impact that a small group of cases can have on the statewide, total amount owed victims: $40 million of the $85 million in restitution ordered is owed by only 52 offenders. The average obligation in these 52 cases is $769,000. Most of these offenders committed crimes serious enough that they are serving lengthy terms of incarceration, making collection highly unlikely. The other $45 million is owed by approximately 11,500 offenders whose average obligation is $3,900. The likelihood of victims receiving restitution in these cases is quite high. The Colorado courts are seeing 50 percent of restitution cases being paid in full within two to three years and another 20 percent being partially paid during that timeframe. Over a five to six year period, 65 percent are being paid in full and another 15 percent are receiving partial payments. This tells us that 80 percent of all restitution cases are either fully paid or at least partially paid within five to six years. We cannot discuss restitution without mentioning a recent and very important initiative in Colorado. Innovative approaches have been adopted with regard to the supervision of economic crime offenders those convicted of crimes involving fraud, embezzlement, investment scams, and the like. These offenders often leave large numbers of victims in their wake, and the monetary losses
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Reaping the Dividends and Appreciating the Rewards

When it comes to developing and investing in a comprehensive collections program, expectations and desired results will vary considerably depending upon peoples unique perspectives and roles. The challenge is to forge a system that is sufficiently dynamic to answer a wide range of needs on multiple levels. Colorado has found this can be done, but that it happens over a period of time and takes the sustained commitment of everyone involved. Below are examples of the benefits that have been realized and the range of needs being addressed.

Fulfillment of Restitution Obligations

In some circles, there is a pervasive sentiment that the criminal justice system is failing victims in the area of restitution and that few victims ever receive payment. Many view restitution as mostly symbolic. This, however, may be a result of overgeneralizing the difficulties encountered in recovering restitution in a minority of cases that make up the vast majority of the unpaid dollars. In other words, a relatively small number of restitution cases with unusually high outstanding balances will skew the data and leave the impression that all restitution debts have extremely low collection rates. It is important to use caution when reviewing or conveying restitution data and recovery rates. Without careful analysis and explanation of the data,

Heightened accountability
A quote from Stephen Covey rings quite true when applying it to our discussion about the collection of fines and restitution: Accountability breeds

can be staggering. Economic crime units (ECUs) within local probation departments have been launched in a number of jurisdictions, and there now exist new, statewide supervision guidelines and special terms and conditions targeted toward persons who have committed such crimes. Substantial payments are coming in on large balance cases where, previously, there was little hope of recovering restitution. Probation officers and collections investigators are making a difference by creatively responding to trends such as the increase in the frequency and severity of economic crimes, and putting solutions into action.

Payment of Courtordered Fines

We have too many outstanding tickets, and people are thumbing their noses at us and never paying their fines. This recent statement by a mayor in Oregon is just one example of the frustration that is fueling a wider perception that fines, in general, are typically ignored by offenders. In turn, questions are raised concerning the true practicality of using such sanctions for punishment and deterrence. Furthering the debate, some argue that fines have become too expensive, and therefore, low collection rates are simply a reflection of that. A range of factors weigh into the efficacy of fines in the criminal justice system, but one that should be at the core of the discussion is the extent to which jurisdictions are proactive in the enforcement of payment. Admirably, the mayor mentioned above was actively seeking new methods to tackle the problem in his community, including a tax refund intercept program! Fines (including associated costs) in the Colorado state courts now average
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about $350. Generally, statutory fine and cost assessments provide enough consistency that doing a straightforward calculation of the overall percentage of dollars paid gives a fairly accurate representation of performance. Through its investment in a comprehensive collections program, Colorado is seeing the vast majority of these obligations being paid. An analysis was recently conducted that reviewed the collection status of all cases in Colorados county and district courts in which fines and costs had been ordered over the last 10 years. (This analysis included the full spectrum of offenses: minor infractions to felonies.) The data yielded 2.7 million cases, and of those, 79 percent were paid in full. The total dollars paid represented 70 percent of the $717 million imposed. Data concerning a subset of the above, traffic-related cases (the highest volume case class), reflected that 85 percent of all cases were paid in full. In terms of dollars, 82 percent of the $377 million imposed had been paid.

Opting for low-cost, intermediate sanctions for non-payment, such as wage attachments, avoids the more costly enforcement methods, such as probation revocation or incarceration. Collecting outstanding balances through intercepts saves the entire system the costs of lengthier and more complex collection proceedings. Using an in-house collections model resolves the majority of cases and reduces the number (and the associated costs) in which a collection agency is needed.

Conclusion
An advantage that the collections arena enjoys within the judicial system is that, for the most part, progress and results can be measured with relative ease. Collections investigators appreciate having a role in which they can readily observe the fruits of their labor. The satisfaction of seeing victims receive long-awaited restitution extends to most other professionals in the system, who very likely played at least some part in the fact that those dollars were recovered. Our ability to measure and appreciate progress also shines light on where we need to focus future efforts. How, for example, can we do a better job with that 20 percent of cases in which victims have yet to receive any restitution? Solutions are out there, no doubt, waiting for those who will sense an opportunity, make an investment, and collect the dividends!
_________________ AbouT THE AuTHoR Paul Litschewski is the financial services manager for the Colorado Judicial department and oversees the planning, development, and administration of the statewide fine and restitution collections program. Contact him at paul.litschewski@judicial.state.co.us.

Cost Reduction and avoidance

A benefit not to be overlooked is that a wide variety of costs can be reduced or avoided by incorporating specialized collections staff and equipping them with solid tools. Below are some examples: Preventing unnecessary payment plans reduces the volume of cases in which the courts must expend resources to monitor compliance. Leaving payment negotiations and discussions to the collections office saves time in the courtroom, probation department, and other offices.