Case Study: Setoff Debt Application

Client: Municipal Association of South Carolina

The Municipal Association of South Carolina (MASC) represents and serves the state's 269 incorporated municipalities. Since its establishment in 1939, MASC's mission has been to offer services and programs to give municipal officials the knowledge, experience and tools for making the best possible public decisions in the complex world of municipal government. Among its services to its members are legislative services, research, education, insurance programs, collections programs and technology programs.

Business Scenario

VC3 developed, maintains and hosts the Setoff Debt Application to enable MASC to manage and run their Setoff Debt Collection Service. This service allows MASC's member cities and other public bodies to collect delinquent accounts or debts by deducting money from the debtor's state income tax refund prior to the South Carolina Department of Revenue (SCDOR) issuing the refund. It is a valuable revenue source for South Carolina cities and enables cities to annually recoup millions of dollars in revenue from debts that would otherwise be lost. In 2003 alone, $10,000,000 in debts owed to South Carolina cities were handled by the system. Currently, over 100 South Carolina cities participate in the program.

The Problem

Prior to VC3's implementation, MASC used a DOS application to administer the Setoff Debt service. This required participants to install a DOS program at their facility and to exchange data with MASC via floppy disks using the US Postal Service. The application provided no integration with MASC's accounting system and historical data was difficult to retrieve. Additionally, MASC was unable to monitor the city process, which made it difficult for them to ensure that participants were in accordance with the laws governing the program.

VC3's Solutions

This was an ideal scenario for a hosted web application. All debt and debtor information is now entered in by the cities via a web browser and stored in a centralized database in VC3's data center. The application generates letters that the cities send to their debtors explaining the setoff debt process. Those who respond to the letter by paying their debts have their information updated in the Setoff Debt Application. Unpaid debt information is processed by the system and sent to the SCDOR. If a debtor is to receive a tax refund, the SCDOR deducts the debt amount from the tax refund and sends a check to MASC. MASC administrators upload the debt information into the Setoff Debt Application. MASC then sends a check to each city for any debts that are setoff, less a service-processing fee paid by the debtor. At any point during the process, a city can access the Setoff Debt Application to determine which debts have been setoff. In addition to the web interface, the application interfaces directly with MASC's accounting system to generate checks to the cities for all debts that have been setoff. The application also provides a full audit trail and history of every transaction.

Benefits

The Setoff Debt application has produced time savings due to elimination of floppy disk handling, as well as the automation of updates to MASC's accounting system.
Real time access to setoff debt information allows cities to know immediately what debts have been setoff, and it allows MASC to know what debts have been paid.
The application is very easy to learn and use due to the rich web-based user interface.
The user acceptance has been very high, enabling more efficient entry of debt information, which in turn translates into a higher number of debts setoff.

Technologies

VC3's development team leverages Microsoft's .Net application development platform, utilizing the C# programming language, SQL 2000 and 128bit SSL encryption.

The Setoff Debt application is the first project in which MASC has used the ASP model to deliver complex application functionality to member cities. In doing so, MASC has laid the foundation for future service offerings and, more importantly, has established the credibility of this approach with the cities by letting the cities see first hand the numerous advantages of ASP hosted software.