STUDENT ACCOUNT COLLECTION policy

Controller's Office Policy CO 07 08

Purpose:

To be used when a student has incurred a debt to the university. The University of North Carolina at Pembroke must abide by the statewide accounts receivable program policy and the Office of the Attorney General’s guidelines for submitting accounts.

Scope:

Per G.S. 147 -86.22 the State Controller, in conjunction with the Office of the Attorney General, shall establish policies and procedures to govern techniques for collection of accounts receivable. These techniques shall include use of credit reporting bureaus, judicial remedies authorized by law, and administrative setoff by a reduction of an individuals tax refund pursuant to the Setoff Debt Collection Act, Chapter 105A of the General Statutes, or a reduction of another payment, other than payroll, due from the State to a person to reduce or eliminate an accounts receivable that the person owes the State. Utilize the following list of state web sites, as a guide in effectively managing accounts receivable.

North Carolina Department of Justice - Attorney General’s Office - Collections Guidelines

Office of the State Controller - Statewide Accounts Receivable Program

Policy:

Accounts Receivable Collection Policy. All accounts will go through the following procedure:

Age of Accounts	Account balances that are less than $5.00 will be written off based on states policies
1-30 days past due	Mail first past-due letter Electronic Bill Receive a promise to pay.
31-60 days past due	Mail second and final past-due letter Electronic Bill Refer to Attorney General's Office.
61 + days past due	Complete appropriate submittal forms and send to the Attorney General's Office, or the agency legal counsel. Refuse additional service to the delinquent debtor where this does not conflict with Federal and State laws. After 45 days from date sent to Attorney General’s Office, a decision will be made on how to proceed with account. Account may be assigned to a state contracted collection agency. December of every year a list will be submitted to the Department of Revenue for tax set off proceeding to satisfy the debt owed to the university.
	A student with an unpaid balance at UNC Pembroke will not be allowed to enroll for the next term. Current financial aid will not be used to pay our prior semester balances.

The University of North Carolina at Pembroke, UNCP utilizes a third party vendor, AMS/SallieMae TuitionPay for payment arrangements. This vendor will allow payment arrangements for current or future term balances.

For accounts that are to be assigned to a collection agency, the Student Account’s Office will allow a six (6) month payment arrangement. The student must sign a promissory note and the payments will be, at a minimum, the remaining balance divided into six equal payments with the first payment due the date of the payment arrangement.

Procedure:

Attorney Generals Guidelines:
The Attorney General’s Office is the primary agency responsible for the provision of all legal services and advice related to the collection of accounts receivable. For detailed procedures regarding submission of past-due accounts, please contact the Attorney General’s Office or the appropriate legal counsel.

G.S. 147-86.11(e)(4) states: For monies received or to be received, the statewide and UNCP’s cash management plan shall provide at a minimum that: Unpaid billings due to a state agency shall be turned over to the Attorney General for collection no more than 60 days after the due date of the billing.

If, within the first 60 days, it is apparent that collection of an account will not be secured without legal assistance or that compromise of the claim is justified (i.e., a formal settlement is to be made by the Attorney General’s Office, with part of the debt paid and the remainder discharged), the account shall be forwarded immediately to the Attorney General’s Office or the appropriate agency legal counsel.

Where the debtor is paying a debt in periodic payments satisfactory to the agency, the account may be retained beyond 90 days, until the account is satisfied.

Please limit lists to no more than one hundred (100) accounts per month. To submit accounts of more than one hundred (100) per month requires permission from the Collection Section Manager before submitting the accounts. All list forms may be mailed, faxed or e-mailed to the Collection Section. All accounts must be submitted in alphabetical order. Do not submit the Debtor’s name alone, without either an address or social security number, on the account list form. A social security number must be provided in order to obtain information about a Debtor from the N.C. Department of Revenue. The Collection Section follows the following guidelines when processing accounts for collection: Lists are processed in the order they are received from the Agency Creditors.

PLEASE NOTE: IF A CONTACT PERSON CHANGES, INFORM THE COLLECTION SECTION SO CHANGES CAN BE MADE TO THE FORM DEMAND LETTER.

For each submitted student loan list, total indebtedness for each Debtor is computed (e.g., total principal due, interest and late charges). For each submitted account receivables list, total indebtedness for each Debtor should be listed. List a breakdown separately of the principal amount due, the state rate of interest due, late charges due and any other costs that a Debtor may owe and indicate if you want this listed in the demand letter. If an Agency Creditor wants the contact person’s e-mail address listed in the demand letter, please indicate this on the form by writing. The original demand letter is sent to the Debtor and two additional copies of the demand letters are photocopied. One copy is retained in the active files of the Collection Section and one is forwarded to the Agency Creditor with a memorandum stating when the responses from the demand letters are due back to Collection Section. The Debtor is given thirty (30) days from the date of the demand letter to respond. The Agency Creditor should notify the Collection Section within forty-five (45) days from the date of the demand letter what response, if any, the Agency Creditor has received from the Debtor. The codes to be used for the responses are listed below as well as in the above referenced memorandum

(PD) Paid
(SR) Satisfactory Response
(N/R) No Response (A.G.’s Office will make a recommendation)
(N/R SUE) No Response (A.G’s Office will file lawsuit)
(N/R CA) No Response (Client will send to Collection Agency)
(UR) Unsatisfactory Response (A.G.’s Office will make a recommendation)

Should the Debtor contact the Agency Creditor, after receipt of a demand letter from the Collection Section, it is the responsibility of the Agency Creditor to handle such an inquiry. The Collection Section only makes repayment agreements after a lawsuit is filed. If the Debtor contacts the Collection Section, after receiving a demand letter, the Debtor will be referred to the Agency Creditor to make any arrangement for repayment, etc. Once the forty-five (45) day time period has expired, and the Collection Section has received the Agency Creditor’s response codes, the Collection Section will make its recommendations for each account. The Collection Section recommendation for action will be marked on both the Agency Creditors’ list and a list maintained by the Collection Section. The Agency Creditor’s list will be returned to the Agency Creditor with a memorandum stating the recommendations of the Collection Section. If any demand letter is returned from the Post Office because of an insufficient address, the Collection Section will mark the code (NAN) (New Address Needed) on the returned envelope and letter and return it to the Client. Please resubmit any letters returned NAN on a new list after an accurate address is obtained for the Debtor. The Debtor’s account must be resubmitted because the dates in the letter will be incorrect and the Debtor must be afforded thirty (30) days in which to repay the debt. All account receivables submitted for collection should be reviewed to ensure that the statute of limitations has not run. The statute of limitations will be three (3) years on most account receivables. If the promissory note or contract is under seal@ there is a ten (10) year statute of limitations. On federal loans (Perkins) there is no statute of limitations. Account Receivables, which had N/R (no response) from the demand letter, and are $25.00 or less, are recommended to be written off (W/O). Account Receivables in amounts over $25.00 should be placed with a State-contracted collection agency. PLEASE NOTE: ONCE AN ACCOUNT IS TURNED OVER TO A COLLECTION AGENCY YOU CANNOT CHARGE THE COLLECTION AGENCY FEE TO A DEBTOR. YOU, HOWEVER, MAY STILL CHARGE THE STATUTORY RATE OF INTEREST AND THE LATE PENALTY FEES TO THE DEBTOR. Student loan accounts, with a N/R CA recommendation for any dollar amount are recommended to be submitted to one of the State-contracted collection agencies. Student loan accounts, with a N/R SUE recommendation in the amount of $200.00 or more, are recommended for lawsuit. If the Debtor lives out of state, and the promissory note was signed in North Carolina, the Collection Section will file a lawsuit and serve the complaint by certified mail. If the Debtor lives out-of-state and the Collection Section cannot serve the Debtor, the Collection Section recommends that the account be submitted to a State-contracted collection agency.

Set Off Debt Collection Act/Tax Set Off:

N.C. Gen. Stat. ' 105A N.C. Gen. Stat. ' 105A-3(b) – Mandatory State Usage: A State agency must submit a debt owed to it for collection under this Chapter unless the State Controller has waived this requirement or the State agency has determined that the validity of the debt is legitimately in dispute, an alternative means of collection is pending and believed to be adequate, or such a collection attempt would result in a loss of federal funds. The State Controller may waive the requirement for a State agency, other than the Department of Health and Human Services or a county acting on behalf of that Department, to submit a debt owed to it for collection under this Chapter if the State Controller finds that collection by this means would not be practical or cost effective. A waiver may apply to all debts owed a State agency or a type of debt owed a State agency. The Collection Section will submit Debtor information to the N.C. Department of Revenue for debts owed to the N.C. Department of Justice through the Set Off Debt Collection Act. Other State agencies should register with the Department of Revenue and the State Controller’s Office (unless the State Agency Creditor has previously been registered) in order for each Agency Creditor to submit its delinquent accounts to the Department of Revenue for Set Off Debt Collection.

Review for accounts should start on October 1 for tax set off due date of December 1. Acknowledgement letters must be sent to debtors within 10 days of notification that the set off has occurred.

Bankruptcy:

If you receive a Notice of Bankruptcy you must immediately cease all collection efforts. Most Agency Creditors will receive Chapter 7 (Asset Case or No Asset Case) or Chapter 13 (See Attachments 34, 35, and 36). The Agency Creditor is prohibited from engaging in collection activity against the Debtor and certain co-debtors as listed under 11 U.S.C.S. § 362 - Automatic Stay.

Write off of Uncollectible Accounts:

Accounts should be written off when all collection procedures, including those required by the Office of the Attorney General (OAG), have been conducted without results and management deems the accounts uncollectible. Accounts due from individuals or vendors must be submitted to the Department of Revenue for setoff debt proceedings at least once prior to write off. After write off, these accounts shall continue to be submitted to the Department of Revenue for debt setoff proceedings.

Any account over one year aging and inactive will be included in the doubtful allowance. Any account over two years aging and all state policies and procedures have been followed will be written off.

However, OSC requires that the reasons for writing off an account and compliance with write-off policy must be adequately documented. Such documentation must be readily available for audit.

Accounts that are written off as uncollectible require that the University reimburse the State for uncollected tuition. As a result, the University’s limited budget will be negatively impacted, possibly reducing support services to students in good standing.

Accounting for Receivables Written Off:

Uncollectible accounts may be written off of financial accounting records and no longer recognized as collectible receivables for financial reporting purposes, but the legal obligation to pay the debts still remains. Accounts written off remain debts to the agency until discharged by the Office of the Attorney General or collected.

Procedures to account for uncollectible receivables that have been written off are outlined below:

For any uncollectible receivable of more than $25.00 that has been written off, a summary level record of the accounts sufficient to substantiate the debt is to be retained indefinitely or until the debt has been collected or discharged.
For uncollectible receivables of $25.00 or less that have been written off, such records must be retained for two years. A record of accounts written off must be maintained and reported to the OSC on a periodic basis, to be determined at a later date.

If an account is determined to be an indigent care account or a contractual adjustment, the account is no longer classified as a receivable/debt of the agency and, therefore, the procedures to account for uncollectible receivables do not apply. Agencies should adhere to applicable indigent care regulations.

Updated: Thursday, December 23, 2010

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