Kansas Department of Administration, Office of General Services
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General Accounting

Accounts and Reports Setoff Program
State Agency


The setoff process begins with the referral of debts to the Setoff Program. Debts submitted must meet the criteria established by K.S.A. 75-6201 et seq. and as agreed to by the Director and with the state agency. A valid debt must exist and be due and owing and considered to be delinquent, and at least three attempts should be made to collect the debt prior to its submission. Further, the debt must be at least $25.

When the Creditor Agency is set up with Setoff, access to the web-based system (KDRS) is given to one or more system user(s) for the Creditor Agency. The Creditor Agency will be responsible in maintaining the debts for their respective agency. The system user(s) will have access to input debts, validate debt balances, request adjustments, and create miscellaneous reports. Using a social security number (SSN) or employer identification number (EIN) is the preferred method for submitting debts. However, if a SSN or EIN cannot be given, the debt must be entered manually in KDRS. All pertinent information about the debtor must be included in the reference box at the time of submitting the debt. Suggestions for additional pertinent information would be date of birth, Kansas driver’s license, address (service, forwarded, current, etc), name of spouse, spouse’s SSN, etc.


The Setoff Program matches several payment sources against the debtor file containing debts owed to state agencies. The types of payments we match against are:


State employees became subject to setoff with the matching of the debtor file against employee earnings which began in May 1981. This was the first payment source that the Setoff Program started with. As you will see, a piecemeal approach was used in adding payment sources to the program.

Wage garnishment laws define the wage amounts that may be set off against debts. Twenty-five percent of disposable earnings (gross pay less federal and state income taxes, social security tax, and KPERS retirement) may be set off against most debts, but 100 percent may be set off against State tax debts.

Many state employees who have had their debts matched against their wages elect wage assignments. By agreeing to a wage assignment, the debtor (state employee) acknowledges the debt and authorizes a specific amount to be deducted each payroll period. Setoff Program policy requires that a wage assignment deduction be at least $25 per bi-weekly payroll period. Obviously, if the debt amount owed is larger and depending on their ability to pay, a higher amount will be negotiated.

Income Tax Refunds

The debtor file is provided weekly to the Department of Revenue to match against individual income tax refunds in process. Set off of single individual income tax refunds was implemented in July 1981, and set off of joint income tax refunds was added in January 1982. One-hundred percent of single filers' income tax refunds can be set off against debts owed. A portion of joint filer's income tax refund who is the debtor is available for set off based on the ratio of each spouse's income contribution to total income.

Homestead Property Tax and Food Sales Tax

Set off of homestead property tax and food sales tax refunds was implemented in January 1983. One-hundred percent of the homestead and the debtor's proportionate share of the food sales tax refund can be set off.

Miscellaneous Payments

Set off of miscellaneous payments was implemented in December 1982. This includes payments to individuals and vendors, KPERS withdrawals of accumulated contributions, and Kansas Lottery winnings. One-hundred percent of most of these payments can be set off. Some miscellaneous payments, however, cannot be set off due to federal and state restrictions (e.g., emergency disaster relief payments).

Unclaimed Property

The State Treasurer matches payments for unclaimed property against the Setoff Program debtor file. This process was implemented in August 1987. One-hundred percent of these payments can be set off.

KPERS Retirement Benefits

Set off of KPERS retirement benefits began in July 1990.  KPERS matches its retirant benefit file with the file of individuals submitted by the Department of Social and Rehabilitation Services who are delinquent in payment of court-ordered child support and support debts owed to the district court trustee.

Direct Payments

Many debtors may wish to enter into repayment agreements with state agencies once they have been notified of a match by the Setoff Program. Payments can be processed through the Setoff Program or through the state agency. After the debtor has been notified by the Setoff Program, all payments received from the debtor must be reported as Setoff Program collections.


The Setoff Program follows several steps in setting off debts:

  • Substantially all state payments in process are matched against the debtor file on social security numbers and employer identification numbers. Setoff Program personnel review the listings of the matches to determine if the matches on both identification numbers and names are the same. If the matches are valid, the payment is intercepted for the setoff process.
  • The debtor is notified by a letter of intent to set off the payment in process against his/her debts. A copy is sent to the state agency to alert them of the pending set off and to allow the opportunity to review the account and inform the Setoff Program of any necessary adjustments.
  • The debtor is given 15 days in which to request an administrative appeal. If no appeal is requested, final set off is effected.
  • The funds are collected by the Setoff Program and applied to the debtor's account balance.
  • A receipt of payment is provided to the debtor.
  • Funds collected are transferred twice a month after withholding the collection assistance fee.


To assure due process, Kansas law requires that the debtor be given the opportunity to appeal the setoff procedure. The debtor initially has the right to appeal within 15 days from the date of the letter of intent to set off. If an appeal is received within 15 days, further setoff procedures are delayed until the dispute is resolved. Even if the debtor does not appeal within the 15-day period, the debtor still has the right to appeal within two years from the date final set off was effected. If the appeal request is received after the initial 15-day period, set off may have already occurred. However, a hearing will be held to determine if the set off was proper. Most hearings are conducted by telephone conference. There have been a few cases where the debtor did not make the 15-day appeal, but did appeal within the two-year period and prevailed in his/her appeal. Moneys that have been erroneously set off are refunded. It is the state agency's responsibility to issue a refund if an over collection of a debt occurs providing the Setoff Program has already collected and transferred the money to the state agency.

When the Setoff Program receives a hearing request from the debtor, the Setoff Program will notify the state agency and request that they try to resolve the dispute. If it cannot be resolved, the matter is scheduled for hearing. At this hearing, the state agency is responsible for providing evidence to establish the debt's validity.


The state agency will maintain control of setoff accounts and are involved in every step of the setoff process. The debt is owed to the state agency and they maintain control of it. The Setoff Program's role is to assist in collection on behalf of the state agency.

The Setoff Program will provide the state agency a copy of all correspondence sent to the debtor and the state agency is responsible for: meeting with debtors, providing documentation regarding the validity of the debts, resolving disputes, and arranging payment plans. The state agency is also responsible for updating debtor account balances which have been referred to the Setoff Program, including the accounting for direct payments and adjustments to the debts.

A debt remains in the Setoff Program for as long as the referring state agency decides to leave it there. Historically, debts are removed when: the debts are uncollectible; the debts are no longer delinquent because payment has been made or because a deferment has been filed; or the debts are discharged due to bankruptcy.


The Setoff Program remits collections of setoff accounts twice a month after withholding the collection assistance fees. However, for the Department of Social and Rehabilitation Services, collections for child support debts are remitted daily. Included with each remittance is the detail of all collections by debtor and amounts set off.

The Setoff Program is financed by the collection assistance fees charged to state agencies, municipalities, municipal courts, and district courts. The fee is charged only on the amount collected. Based upon the method of submitting debts, two different fee structures are used for municipalities: 1) 18.4% for debts submitted with the correct SSN or EIN; or 2) 23.4% for debts that require research. Monies collected, less the fees, are transferred to your agency twice a month. The Setoff Program fee is quite reasonable when compared to the fees charged by other collection firms and attorneys which generally range from 30 to 50 percent of the amounts they collect. The Setoff Program is self sufficient because of the fees we charge, thus the taxpayers do not pay for the operating cost of our program which is a refreshing concept in today’s governmental environment.