604 OVERVIEW

College department management is responsible for establishing and maintaining the proper environment of internal controls by use of a written accounts receivable procedure. No goods or services shall leave the college without the college receiving payment or an account receivable record being established. The amounts owed may be recorded as revenue or a recovery of expenditure.

The following are types of goods or services that may generate account receivable records:Third party payments, tuition and fees, facility rental, childcare, grants and contracts, NSF checks, overpayments, student loans.

The basic processes of accounts receivable are listed below and should be included as a minimum in any operating procedures:

  • Creating / recording the account receivable transaction
  • Producing a billing
  • Receipt of payment
  • Aging of A/R
  • Collection process
  • Write off

Following are procedures for the types of account receivable transactions:

Third Party Sponsorship

Definition: An organization or person other than the student that is responsible for payment of the students financial obligation.

  1. Obtain written documentation from the sponsor which includes a minimum of the following:
    • Name of individual
    • Student ID number
    • Year/Quarter
    • Class
    • Amount authorized
    • Billing information
  2. Establish Sponsor ID (Customer ID)

    Financial Aid Office or Campus Business Office is responsible for establishing a sponsor ID (customer ID) to be used by cashiering as a mode of payment and records an unbilled receivable in the financial management system (FMS).

  3. Invoice issued to sponsor

    Accounting is responsible for invoicing the sponsoring agency in a timely and regular basis.

  4. Payments Received

    Payments received must be deposited into the colleges account in a timely manner (24 hours).

  5. Aging

    Aging of unpaid receivables will follow the standard aging criteria. (30, 60, 90 days etc.)

  6. Collection

    Accounts that remain unpaid after a specified period of time will be turned over to a collection agency.

  7. Write off

    If the collection agency returns an account as uncollectible, a write-off request will be sent to the Office of the Attorney General for accounts over $2,500.00.

Short term Loans

Short term loans will be processed and billed in accordance with Seattle College District Policy and Procedure 332.

Grants, Contracts, and Miscellaneous Receivables

  1. Billings will be issued for grants and contracts and miscellaneous receivables, which arise during the colleges course of operation
    • Upon completion of miscellaneous receivable transactions, invoices are to be prepared and sent to debtors.
    • Billings for grants and contracts are to be prepared on a regular basis, at least quarterly, except for instances where a written contract or regulations require a different schedule.
  2. The campus or district accounting office may issue billings. However, all billings issued by the campus must be under the control of the campus business office.
    • Billings are to incorporate sufficient detail to adequately document the goods or services provided. Source documentation is to be retained and available upon request.
    • Billings are to be issued on sequentially numbered Seattle College District documents (invoices) unless a written contract or regulation requires a different format.
    • Copies of these documents are to be maintained at the campus business office if originated by the college, with the official record maintained at the district accounting office.
  3. Receipt of payments is to be promptly recorded in the FMS cashiering system, which will clear the account receivable.
  4. Aging of unpaid receivables will follow the standard aging criteria (30, 60, 90 days etc.)
  5. Accounts that remain unpaid after a specified period of time will be turned over to a collection agency.
  6. If the collection agency returns an account as uncollectible, a write off request will be sent to the Office of the Attorney General for accounts over $2,500.00.

Collection Efforts Accounts Receivable

Every effort will be made to collect amounts due for accounts receivable

If payment is not received for accounts due from other than the Federal or Other Governments or State Agencies, the following actions will be taken:

  • Accounts 30 days past due - second invoice will be issued
  • Accounts 60 days past due - third invoice will be issued with threat of collection efforts
  • Accounts 90 days past due - will be referred for collection

All efforts to collect receivables shall be documented. Accounts with balances of less than $2.00 will be cleared by the institution and not be pursued for collection.

Management will review and make recommendations regarding the processing and classification of past due receivables. Monthly aging reports of the sub-ledger will be reviewed and reconciled to the general ledger.

Write Off of Uncollectable Accounts Receivable

When it has been determined an account will likely not be collected, it is to be removed from the accounting records.

Determination of uncollectability may be based on the following criteria:

  • Amount of account
  • Cost vs. benefits of collection efforts
  • Factors affecting the likelihood of access to future assets such as
  • Court decisions, death, incarceration
  • Other mitigating factors such as hardship or unable to locate

Management review will occur prior to or immediately following the write-off of uncollectable receivables. The Attorney General's office may review certain types of receivables to ensure that no cost effective legal means of collecting the receivable remains.

It may be found cost-effective to pursue minimal collection actions for uncollectable accounts such as balances due on student accounts. The student account will be flagged and a hold placed on the student records for students with financial obligations to the institution. If the obligation is paid, the hold will be removed. For other types of uncollectable accounts, documentation will be maintained for future review and possible matching of repeat transactions.

Uncollectable accounts in amounts under $2,500 will additionally be reviewed by the Districts Vice Chancellor of Business and Finance or other designated individual.

Uncollectable accounts in amounts over $2,500 will be reviewed and approved by the Office of the Washington State Attorney General.

After management review, any account determined to have been inappropriately written off is to be returned to the accounting records as a past due receivable.

Companion Document : Pol604
Adoption Date : 1993/10/29
Revision Date : 1993/10/29