After five years of running S.D. debt recovery center, CGI plans to leave its state contract

Capitol News Bureau

PIERRE, S.D. (KELO) — A company that since 2015 has worked to corral money that people owe to South Dakota state government now plans to step aside.

State Administration Commissioner Scott Bollinger gave the news Wednesday to the Legislature’s Government Operations and Audit Committee.

Virginia-based CGI Technologies and Solutions signed the original five-year contract in November 2015. A clause would have let the company renew for five more years if state government agreed.

One other company, RevQ, submitted a proposal that year. Then-Governor Dennis Daugaard had convinced the Legislature to establish a central obligation recovery center. Some state agencies previously had used various outside collectors, while other agencies pursued debts on their own.

Bollinger said Wednesday that CGI gave notice last spring it wasn’t interested in an extension. He said negotiations were under way with a replacement that, if agreement is reached, would start November 15.

CGI charges a recovery fee of 20% atop amounts collected, the rate set by the 2015 law.

State agencies, public universities and three public technical colleges send unpaid accounts to the center.

After 60 days, CGI can refer accounts to two outside collectors to further pursue: Harris and Harris, based at Chicago, Illinois; and Municipal Services Bureau, in Austin, Texas. If those efforts don’t work, state agencies can ask the South Dakota Board of Finance to write-off the amounts.

Bollinger’s report showed CGI collected $2,670,012.10 for state agencies in the fiscal year that ended June 30, while outside collectors brought in $671,639.87. CGI also arranged debt-payment plans that totaled $8,083,556.66, while outside agencies arranged plans on $2,402,744.85.

He told lawmakers the $3.34 million collected for state agencies in fiscal 2020 was nearly as much as the prior year. “From that standpoint, it was very positive in that regard,” he said.

CGI and outside collectors received $621,535.83, according to the report.

Legislators didn’t have any questions.  “Sounds like you’re perfect,” said the committee’s chairwoman, Representative Sue Peterson, a Sioux Falls Republican. Replied Bollinger, “I wish we were. If we were perfect, we’d collect it all.”

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