Accounting Services Section (ACT)
Effective Date: 01/23/2004
Last Modified Date: 03/31/2006
All accounts receivable should be billed monthly (accounts receivable in the University Cashier's Student Ledger are on different billing cycles). A concerted effort should be made to collect all accounts, including the current amount due applicable to installment payments. Follow-up notices should be sent on uncollected accounts.
Statewide Accounts Receivable Program Policy and Procedures Manual
The Office of the State Controller issued the "Statewide Accounts Receivable Program Policy and Procedures Manual" in May of 1995. This document provides guidelines to assist all state agencies in developing procedures to properly account for, manage and collect receivables in accordance with General Statutes (G.S.) 147-86.20 through .27. Contact the Cash Management Accountant in Accounting Services for a copy of this manual.
An account is considered delinquent if it is a least 60 days in arrears, and no arrangements have been made by the debtor to satisfy the obligation.
Uncollected accounts will be turned over to the Attorney General of North Carolina for collection. The Office of the Attorney General is the primary agency responsible for the provision of all legal services and advice related to the collection of accounts receivable. Unpaid billings due to the University should be turned over to the Attorney General for collection no more than 60 days after the date of the billing.
Authorized Use of Commercial Collection Agencies
The use of commercial collection agencies without the approval of the Attorney General is not authorized. There are currently seven collection agencies authorized by the Attorney General to collect delinquent accounts for state agencies. Only five of these seven are authorized for use by universities. (The other two agencies are for use by non-university state agencies.) Please contact the Cash Management Accountant in Accounting Services for the names and addresses of the collection agencies.
In addition, the 1979 Session of the General Assembly enacted two bills to facilitate the collection of debts owed by an individual to a State agency. The first enactment, known as the Set-Off Debt Collection Act (SODCA), provides for the collection of past-due accounts by offset against State income tax refunds due debtors to the State.
Employee Debt Collection Act
The second enactment, known as the State Employee Debt Collection Act (SEDCA) requires that arrangements be made for the satisfaction of amounts owed the State as a condition of continued employment or service by all State employees, public officials and State legislators.
Pursuant to regulations issued by the Department of Revenue, the State Budget Office and Administrative Memoranda from UNC General Administration, the University is required to submit annually, by December 1st, certain information to the State in order to implement these Acts.
The Cash Management Accountant, CB #1210, 104 Airport Drive, is designated as the University representative to coordinate the accumulation of the required information concerning delinquent accounts, submission of these debts to the Attorney General and compliance with SODCA and SEDCA.
Accounts are not literally "turned over" to the Attorney General for collection. The Attorney General provides letterhead stationery on which a past due notice is printed under the supervision of a representative of the University Counsel's office. When the letters are signed in the Attorney General's office they are returned to the University for mailing. The content of the letter is provided by the Attorney General and will contain the name, address, and telephone number of the University employee to be contacted regarding the debt payment arrangements.
When accounts are determined by the Attorney General to be uncollectible, they are to be written off. However, collections are still to be made, if at all possible.
Even if debts are submitted to the Attorney General for collection, SODCA and SEDCA still must be used.
Information Required about Delinquent Accounts
Due to the cyclical nature of billing and collection activity, the University has established a cut-off date of the 15th of each month for the compiling of required information for submission in compliance with SODCA and SEDCA. The information to be submitted to the Cash Management Accountant for delinquent accounts is as follows:
- Social Security Number (see Federal Privacy Act of 1974, below)
- Name (First, Middle Initial, Last)
- Address (North Carolina Address only)
- Amount Owed
Debtor lists are submitted to the N.C. Department of Revenue and the Office of State Budget for debtors whose combined indebtedness is at least $50.00.
Claims Against Income Tax Refund
Department of Revenue personnel place a "hold" on State income tax refunds due debtors whose names appear on the list submitted. The Department of Revenue notifies the debtor that the University has a claim against the income tax refund in the lesser of the amount of the debt or the refund. The debtor must contact the Cash Management Accountant for additional information and to contest the debt. If the debt is not forgiven, the Department of Revenue will forward to the University a check in the lesser of the amount of the debt or the refund less a collection assistance fee. The funds are then distributed to the indebted University department.
Debt Collection List
The Office of State Budget and Management will arrange to compare the University lists with lists of employees who are members of the Teachers and State Employees Retirement System or who are on a central payroll. Appropriate department personnel will be notified if any of the individuals listed are employed by a state department, agency or institution, Community College system or by a city or county Board of Education. Included with this notification are instructions as to how to proceed to collect the debt.
Chapter 143 Article 59 of the North Carolina General Statutes states that full restitution of the amount owed is a condition of continued employment.
Federal Privacy Act of 1974
The Federal Privacy Act of 1974 conditions of implementation of SEDCA are as follows:
- The transfer to the State Budget Office of an individual's Social Security number in the process of debtor/State employee identification under SEDCA is a "disclosure" of the number within the meaning of the Privacy Act of 1974 and so the transfer is conditioned by that act.
- Any individual who is asked to make initial disclosure of his or her Social Security number in the context of SEDCA must be told that:
- such disclosure is voluntary,
- such request for disclosure is incident to State administrative procedures for debt collection, and the number upon disclosure would be available to effect debt collection.
- Any individual whose Social Security number has been disclosed in a manner other than accordance to condition (2), above, without informing the individual of possible use of the number for debt collection, must be informed of such possible use before transfer (disclosure) of the number to the State Budget Office. (The time lapse between informing the individual of the intended or potential use and the transfer of the number to The State Budget Office for such use is not important so long as the individual is, in fact, informed before the transfer.)
- It is not significant whether a Social Security number is obtained before December 31, 1974 (the effective date of the Privacy Act of 1974).
- It is important whether the Social Security number for use under SEDCA was obtained (a) by initial disclosure from the individual [see condition (2), above] or (b) from pre- existing institutional records or from a third party [see condition (3), above.
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