The Newton Community School District in Newton, Iowa has agreed to hire an outside collection agency to help recover an estimated $50,000 owed to the district in overdue food-service accounts. The board voted 5-1 to approve a contract with collection agency Transworld Systems. 

Newton Food Service Supervisor Cristy Croson told the school board that the school district’s last two external audits and reviews from the National School Lunch Program resulted in warnings to make sure the district is attempting to collection delinquent lunch balances. 

Iowa law also actually prohibits Newton Schools from writing off food-service debts, as it did in past years.

Croson said the school district’s policy is to make sure all students receive meals, regardless of past due balances, but that policy has left several large delinquent balances on the table. The district needs to be fiscally responsible, she said, but hopes to work with families on payment plans. 

Officials are mostly concerned about the accounts where a payment hasn’t been made for several months and Croson said she hopes families who have left the district are pursued first, along with those carrying overdue balances above $500.

Transworld Systems’ Tim Greteman, a district manager, told board members that the agency works for several other regional school districts and he reassured them that the first contact to families will be a courtesy notice, suggesting the person contact the school district to determine if the delinquency is simply an oversight. The next three contacts will be either a letter or an automated phone call, whichever the school district chooses.

Because any calls made are automated, possible concerns that a collector would become too aggressive - or even abusive - are non-factors, Greteman said. 

Transworld Systems’ rates range based on how many accounts are handled. Two accounts per month come with a fee to the district of $16 per month, while 100 accounts would knock the cost down to $11.75 monthly, per account pursued.

The board member who voted against using Transworld Systems expressed concerns about how well the school district would be represented by a third-party collection agency but Croson said she expects many people to react differently when they hear from the agency as opposed to the usual phone calls from the school district. 

She said approximately 5% of student accounts owe more than 75% of the delinquent balances. 

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