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Policy and Procedure ManualChapter 330, Financial Management and Services Responsible Department: Accounting
and Financial Services Exhibit A, Sample Dunning Letter
to Students This section describes the policy and procedures for collection of general accounts receivable (bills owed the University) and write-off of uncollectible accounts receivable. These collection procedures do not apply to travel advances. Portions of this section apply to UCD Medical Center and School of Medicine Professional Billing Group patient care accounts receivable; additional information is in other policies and procedures (see V, below). A. Bad debt--an account determined to be uncollectible after exhausting the available collection remedies or at the time the account is referred to a collection agency when using the UC Davis Financial Information System (DaFIS) or returned from a collection agency when using the Banner Student Information System (Banner). B. Dunning letter--a letter or notice to a debtor demanding payment on a delinquent account. It is University policy to collect on bills as expeditiously as possible. Any amount of money owed the University is due and payable when the first statement or billing is received. An account is considered overdue if it remains unpaid 30 days after the first statement is issued. An uncollected account is considered as a bad debt after all collection efforts have been exhausted. The account will then be written off (see IV.C, below). A. Authority 1. The following list identifies the campus offices authorized to collect accounts receivables consistent with prescribed procedures. Questions concerning billings received or other collection procedures should be directed to the responsible office in each case.
2. The Chancellor is delegated authority to write off bad debts, subject to the availability of reserves, specific income, or an appropriation for that purpose. The Chancellor has redelegated this authority to approve the write-off of uncollectible accounts as follows: a. The Vice Chancellor--Administration has been delegated authority to approve write-offs for general campus accounts, including health care professional fee billings. b. The Director of Hospital & Clinics has been delegated authority to approve write-off of bad debt for hospital patient accounts. B. Delinquent accounts 1. Students with delinquent accounts shall have a hold placed on their registration, preventing future registration at the University, and a hold placed on release of their transcripts. Such action will be taken no later than the end of the quarter in which the account becomes delinquent. 2. Other delinquent accounts, including those of former students, employees, and non-University individuals or organizations, shall be referred to a collection agency. In addition, a hold shall be placed on the release of transcripts of former students until the delinquent accounts are paid in full. 3. Other administrative remedies (e.g., withdrawal of privileges) may be approved by the Provost & Executive Vice Chancellor. A. Aging of accounts receivable Adequate information concerning the age of outstanding bills and claims is essential for proper overall control of accounts receivable; therefore: 1. Aging information must be collected, maintained, reported, and acted upon in a standardized and consistent manner. 2. Levels of effort in record keeping and collection must be commensurate with collection value. 3. In general, bills must be collected as expeditiously as possible, but the cost of collection must not be allowed to exceed the expected revenue. 4. Minimum standards require that reference copies of bills be maintained in a manner that provides information as to which bills are 30 days old or less at the beginning of a month, 31-60 days old, 61-90 days old, 91-120 days old, 121-180 days old, 181 days-1 year old, 1-2 years old, and over 2 years old. The aging will be based on the date of the billing. B. Collection efforts on unpaid accounts 1. For Banner users, the Banner system ages the receivables and generates appropriate dunning letters that are mailed to the customers by Student Accounting. When all collection efforts have been exhausted, Student Accounting staff will initiate the placement of holds on registration for current students and referral to a collection agency for employees, former students, and the general public. 2. For DaFIS users (note: all bills to current students and Sodexho Marriott Services must be processed through Banner), the department must age its receivables in accordance with IV.A, above, and generate the appropriate dunning letters. For accounts remaining unpaid after the collection efforts listed below have been exhausted, the department must contact Student Accounting at (530)752-3649 regarding referral of the accounts to a collection agency. 3. Schedules of collection efforts are listed below. a. Current students 1) 30 days delinquent--second billing (billing statement with past due amount shown). 2) 60 days delinquent--third billing (billing statement with past due amount shown). 3) 90 days delinquent--dunning notice (see Exhibit A for sample). Dunning notices to students must include the amount of the outstanding obligation, the action intended to be taken against the individual, and the department, address, and telephone number of the person with whom the individual should correspond if he/she contests the obligation. The dunning notice will also advise that an administrative review may be requested to consider any contentions the individual may have that are related to the delinquent account. The request for administrative review must be in writing and returned to the responsible office within 10 days.
4) End of subsequent quarter in which account becomes delinquent--hold placed on registration. b. Employees, former students, and general public 1) 30 days delinquent--second billing (billing statement). 2) 60 days delinquent--third billing (billing statement). 3) 90 days delinquent--dunning notice (Exhibit B, fourth notice). 4) 120 days delinquent--stronger dunning notice (Exhibit B, final notice). 5) 150 days delinquent (except government agencies)--referral to collection agency. c. Government agencies Special schedules of collection follow-up action may be established to fit the needs of certain circumstances as long as the number of collection notices sent is at least equal to the following: 1) 120 days delinquent--second billing (billing statement). 2) 180 days delinquent--dunning notice (Exhibit B, third notice). 3) 210 days delinquent--stronger dunning notice (Exhibit B, fourth notice). C. Write-off of accounts After the collection efforts are completed, uncollected accounts are considered as bad debts and are written off within 30 days. 1. Recovered and uncollectible receivables a. For Banner users, the receivable is held open in the Banner system until such time as recovery is made and remitted by the collection agency or the account is determined to be uncollectible. If recovery is made, the funds will be applied to the receivable with any remaining balance charged back to the department account that received the initial credit for the transaction. If the account is determined to be uncollectible, the full receivable will be charged back to the department account that received the credit for the transaction. b. For DaFIS users, when the receivable is turned over to the collection agency, it is charged back to the account that initially received the credit. If recovery is made, the funds received from the collection agency will be credited to the account that was charged. c. Government agency accounts are not referred to a collection agency. When the receivables are deemed uncollectible, the receivable is considered a disallowed charge and is charged back to the departmental account that received the initial credit. 2. Supporting documentation a. For campus accounts up to $1,000 and UCDMC hospital patient accounts from $1,000 up to $20,000, requests for write-off must be supported by listings of the accounts by type of billing; debtor name; amount; an indication whether the account has been turned over to a collection agency; and the reserve, specific income account, or appropriation to be charged for the write-off. b. For campus accounts of more than $1,000 and UCDMC hospital patient accounts of more than $20,000, requests for write-off must include the information listed in a, above, plus supporting information to justify each write-off. 3. Responsibility for submitting write-off requests a. The Associate Director of Hospital & Clinics--Financial Services submits monthly requests to the Director of Hospital & Clinics for write-off of bad debts for hospital patient accounts. b. The Manager of the Professional Billing Group Office submits monthly requests to the Vice Chancellor--Administration for write-off of bad debts for health care professional fee billings. c. The campus Accounting Officer submits monthly requests to the Vice Chancellor--Administration for write-off of bad debts for all other accounts receivable. V. References and Related Policy B. Office of the President: Delegation of Authority--To Write Off Bad Debts (DA2007), 12/22/93. 2. Chapter H-214-7, Health Care Services: Professional Fees. 3. Chapter H-576-60, Medical Centers: Patient Accounts Receivable. 4. Chapter R-212-2, Receivables Management. D. UCD Policy & Procedure Manual: 1. Section 300-10, Travel Policies and Regulations. 2. Section 330-50, Sales of University Supplies. 3. Section 330-89, Billing for Accounts Receivable. Copyright © 2006 The Regents of the
University of California, Davis Campus. All Rights Reserved. |
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