University System of New Hampshire
Financial and Administrative Procedures

UNCOLLECTIBLE ACCOUNTS RECEIVABLE (WRITE-OFF BAD DEBTS)
Procedure 4-032

Issued By: Controller
Date: 05/31/94


The procedure outlined below is intended to ensure that proper prior approval of write offs is obtained, and that each request is based on fully documented good faith efforts to collect the account (i.e. due diligence). This procedure does not pertain to student loans administered under the Federal Perkins Student Loan Program.

A. SUMMARY OF ADMINISTRATIVE PROCEDURE

  1. Approval: The authority to approve the write off of uncollectible accounts is vested in the Chief Financial Officer (CFO) at each campus. All decisions to write off an account are based on review of documented collection efforts demonstrating that due diligence has been exercised. All write offs must be approved in advance by the CFO, or his/her designee, at each campus.

  2. Accounting for Write Offs: The University System Financial and Administrative Procedures Manual, Procedure 10-002, Billing for Goods Sold or Services Rendered, states that when accounts receivable must be written off due to uncollectibility, such amounts are always recorded as a charge to an expense object code or the related reserve for doubtful accounts, not as a reduction of revenue.

  3. Initial Collection Efforts: Any receivable account balance which remains unpaid 90 days after the initial payment due date shall be referred to the campus' department responsible for collections. This department will take appropriate collection steps, including, but not limited to, dunning calls and letters, placement with collection agencies, contact with credit bureaus, or initiation of legal action to recover amounts due USNH.

    1. For accounts less than $10, no collection work is necessary to write off balances, but CFO or designee advance approval is still required. Each campus may exercise more stringent practices, but may not be more lenient. For accounts $10 or more, but less than $100, the collections department must make at least 2 good faith efforts to collect by letter or telephone. For accounts of $100 or more, at least 3 good faith efforts to collect must be made and documented.

    2. If the account remains unpaid after 45 days in the collection process (i.e. 135 days past the original due date), the account will be evaluated for transfer to an appropriate collection agency or collection attorney.

    3. If the account is returned by a collection agency as uncollectible, the account record will again be reviewed to determine if further collection agency placement or legal action should be taken, before a recommendation to write off the account will be made.

  4. Requests for Write Offs: If it is determined that further collection action would not be productive, and after appropriate consultation with the referring office, the complete record of the account and collection actions will be forwarded by the collections department to the Campus CFO, or his/her designee, for write off approval.

  5. Processing Write Offs: When write off is recommended, an appropriate expense account, or the proper reserve for doubtful accounts, will be identified by the collections department, to fund the write off. When approval is received, appropriate documents will be prepared by the collections department to accomplish the write off of the account within CUFS and/or the campus' accounts receivable system.

  6. Record Retention: The complete record of the account, including write off approval and documentation of due diligence in the collection effort, will be retained in the archives of the collections department for seven (7) years.

  7. Credit Bureaus: Any write off of $100 of more will be reported to the servicing Credit Bureau for entry into the credit file of the individual or company.


B. DETAILED OPERATING PROCEDURES

for UNH, and UNHM accounts (Students or Commercial)

  1. DELEGATION OF AUTHORITY

    1. The UNH CFO has delegated authority to write off bad debts to the Controller for all units of UNH, including UNHM, NHPTV, DCE and Sponsored Programs.

    2. As an administrative convenience, the authority to write off individual accounts up to $100, has been delegated to the Manager of Credit and Collections.

  2. BALANCES LESS THAN $10

    1. Account balances of less than $10 will be automatically written off by the Manager of Credit and Collections, when the account is more than 90 days past due.

    2. A quarterly report of all accounts written off will be provided to the Controller for review.

  3. BALANCES BETWEEN $10 and $24.99

    1. Account balances between $10 and $24.99, more than 90 days past due, may be written off by the Manager of Credit and Collections upon completion of at least two documented good faith attempts to collect the account.

    2. A quarterly report of all accounts written off will be provided to the Controller for review.

  4. BALANCES BETWEEN $25 and $99.99

    1. When the account is 90 days in arrears, UNH Business Services will assume collection responsibility. It is the originating department's responsibility to notify UNH Business Services on a timely basis, and provide all relevant background materials.

    2. UNH Business Services will make at least 2 good faith efforts to collect, by letter and/or telephone, as appropriate in each case.

    3. If the account remains unpaid after 45 days in the collection process, UNH Business Services staff will evaluate the account. A recommendation to take further action or to write off the account will be made to the Manager of Credit and Collections.

    4. If write-off is recommended and approved, the account will be written off in the Banner system as follows:

      1. A "CCWO" credit amount will be entered into the Banner system to write off the account against the Banner reserve for doubtful accounts fund.

      2. A "CW" hold will be placed on all student Banner accounts to preclude registration or issuance of transcripts.

    5. A quarterly report of all accounts written off will be provided to the Controller for review.

  5. BALANCES OF $100.00 or OVER

    1. When the account is 90 days in arrears, UNH Business Services will assume collection responsibility. It is the originating department's responsibility to notify UNH Business Services on a timely basis, and provide all relevant background materials.

    2. UNH Business Services will make at least 3 good faith efforts to collect by letter and/or telephone as appropriate.

    3. If the account remains unpaid after 45 days in the collection process, the account will be transferred to a collection agency or attorney, as appropriate.

    4. If the account is returned by a collection agency as uncollectible, the account record will be reviewed to determine if further collection agency placement or legal action should be taken.

    5. If it is determined that further collection efforts would not be productive, the Manager of Credit and Collections will forward the documented record to the Controller for approval of the write off.

    6. Upon approval of the Controller, the Manager of Credit and Collections will effect the following actions:

      1. A "CCWO" credit amount will be entered into the Banner system to write off the account against the Banner reserve for doubtful accounts fund.

      2. A "CW" hold will be placed on all student Banner accounts to preclude registration or issuance of transcripts.

      3. The servicing Credit Bureau will be notified of the defaulted payment so that the credit file of the individual or company is updated.

  6. REPORTS

    1. Semiannually, a Banner report will be generated listing any payments made to accounts with a "CW" hold. This will permit the reversal of write off actions, when appropriate, and restore the funds to the reserve for doubtful accounts fund for future use.

    2. Appropriate reports will be prepared by the Manager of Credit and Collections of accounts written off to support internal and external audit requirements for due diligence.