Revised September 28, 2015
Table of Contents
.040 Collection Agencies
.070 Setoff Collections
.160 Write Off Request
The State Department of Administration has established policies and procedures to be followed by all state agencies in the management, collection and reporting of accounts receivable.
As used in this chapter, "accounts receivable" refers to amounts due from federal, state or local governmental agencies, from other funds within the same agency, and from firms, individuals or others which have been billed as a result of regular business transactions. Amounts covered by Interdepartmental Vouchers (IFVs) need not be included as receivables, even though the IFV credit has not yet appeared on the monthly departmental FIS statement.
Accurate records are to be maintained on all accounts receivable. The records to be maintained for each customer must include the complete name and address plus the social security number (when necessary), Federal Employer Identification Number (FEIN) or other taxpayer identification number.
At the time of sale, a charge slip or invoice is to be provided to the customer. These are to be consecutively numbered for accountability. The sale is to be entered into an accounts receivable ledger for the customer and the total sales for the day are entered into a control ledger. The accounts receivable ledger is to be maintained for each account showing all charges and payments. The control ledger is to equal the receivable ledgers for all customers. A monthly reconciliation is to be completed between the receivable records for the customers and the control ledger to ensure accuracy.
Statements are to be sent at least monthly to all customers who have an outstanding balance due. The statement should indicate the total balance due and identify a payment due date. The payment due date is up to each department, but should allow sufficient time for the department to post the payment before the next billing cycle. If the department has approval to assess a finance charge, the amount and terms must also be disclosed on the statement. If full payment is not received the procedures outlined in .030 are to be followed.
It is the responsibility of each department to collect monies due to Kansas State University in the most effective and efficient manner. The following procedures should be used at a minimum for collecting amounts due:
Obtain the complete name and address as well as the social security number (when necessary) or a Federal Employee Identification Number (FEIN), or other taxpayer identification number before extending credit.
Use the following procedures for accounts which exceed $25, and keep a record of each action, including the name or initials of the person taking the action and the date the action was taken.
|Step||Days From Date of Charge||Action|
|1||30||Send first statement to customer.|
Send second statement to customer. (If the customer is a student, place a hold on the student's academic records. See .060 Placing a Hold on Student Records for Non-Payment for further details
|3||75||Send a letter to customer requesting immediate payment.|
|4||90||Telephone or send a second letter to customer.|
Send a letter informing the customer that unless the past due payment of $ _______ is received within the next 15 days it will be necessary to refer the account to a collection agency.
Send a Delinquent Account Data Form (original and one copy) to the Division of Financial Services for each account that has been processed through the steps noted above The Division of Financial Services will submit the debtor's name and taxpayer identification number to the State Division of Accounts and Reports in order to "setoff" any State payment due the debtor such as salary, travel reimbursement, income tax refund, etc. At the same time, the Division of Financial Services will forward the original Delinquent Account Data Form to the collection agency and file the duplicate. If the debt is collected by "setoff" the account will be recalled from the collection agency.
If the account has been at the collection agency for at least 9 months without any collections, the Division of Financial Services will request that the collection agency return the delinquent account.
When the account has been returned from the collection agency, the Division of Financial Services will notify the department to follow the .080 Departmental Write-off Request Procedures.
Only the first four steps are required for accounts of $25 or less. However, they are to be included in the write-off request if not collected. When any account becomes 60 days past due, additional credit should not be given until the account is returned to current status.
Accounts may be referred to any of the following firms. These firms will not initiate litigation action until written authorization is provided by the department involved and the K.S.U. Division of Financial Services.
|Collection Agency||Fee Without Litigation||Fee With Litigation|
Credit World Services, Inc.
Mission, KS 66202
Enterprise Recovery Systems Inc.
2400 World Rd. Ste. 200
Westchester, IL 60154
National Credit Management
10845 Olive Blvd. Ste. 210
St. Louis, MO 63141
Account Control Technology, Inc.
5531 Business Park South
Bakersfield, CA 93309
General Revenue Corporation
4660 Duke Dr. Ste. 300
Mason, OH 45040-8466
Monthly Accounts Receivable Report (KSU DA-32 form) is to be completed by each department which has accounts receivable. This report is to be maintained in the department. The cutoff date for posting receivable transactions need not coincide with the end of a calendar month. However, all departments are to report receivable data as of June 30th and submit a copy of the Annual Accounts Receivable Report to the Division of Financial Services by July 15th.
The Accounts Receivable forms and instructions are available by clicking on one of the following documents.
The Division of Financial Services will handle the accounts receivable procedures for sponsored project invoices sent to the Division of Financial Services. Thus, departments should not include such receivables in their reports.
If a student's account becomes past due a hold may be placed on the student's records to prevent the issuance of a transcript and/or diploma and enrollment. Departments or colleges that place holds on a student's academic records should note the following:
Departmental policy should determine the minimum amount for which a hold should be placed on a student's accounting; however, it is recommended that a hold not be placed on an account for less a than $10 delinquent balance.
Any hold or removal of a hold is to be posted to iSIS by the originating department or college.
Departments are responsible for timely removal of any hold, which they have placed on a student's academic record.
KSU departments are to contact the Registrar's Office with questions concerning procedures for placing a hold on a student's academic record. The Registrar's Office will train departments in placing holds on student's academic record.
Lists of students by name and department and/or by hold code can be obtained from the Registrar's Office. These lists do not include delinquent dollar amount.
The Registrar's Office distributes to each department a list of students whose hold is in override status immediately following early enrollment. If a department does not want a student's academic record cleared, the department is responsible for reactivating the hold.
When collections are obtained by the setoff action described in Step 6 of the .030 Departmental Collection Procedures, 100% of the receipts will be credited to the department by using an Interfund. Another Interfund will be used to pay the State Division of Accounts and Reports their 17% collection assistance fee. The Division of Financial Services will contact the department to determine which account is to receive the payment and from which account the collection assistance fee is to be paid, and will then send a record of each of these transactions to the department for recording and filing.
A department is to apply to the Division of Financial Services for authority to write-off a receivable when the following criteria have been met:
The department has complied with .030 Departmental Collection Procedures and has determined that the receivable is uncollectible.
The department has received notification in writing from the Division of Financial Services that the account to be written off has been returned by the collection agency.
The Write Off Request should be sent to the Division of Financial Services (original and one copy) after including the following information:
A statement signed by the department head that in his/her opinion the accounts are uncollectible and should be written off.
A list showing each debtor's social security or tax identification number, the debtor's name, the dollar amount due and the basis for determining the account to be uncollectible.
The total dollar amount to be written off.
The total number of accounts to be written off.
All requests to write-off accounts as uncollectible are submitted to the Division of Accounts and Reports. When the accounts have been approved for write off by the State Division of Accounts and Reports, the department will be notified by the Division of Financial Services and instructed to delete the accounts from the department's accounts receivable. These accounts are not to be included on the monthly accounts receivable reports after receiving the notification.
All state agency accounts receivable which have been approved for write-off by the Director of Accounts and Reports become assigned to the State. Any amounts received on these accounts are to be remitted to the Department of Administration, Division of Accounts and Reports, State Office Building 110N, Topeka, Kansas 66612 by an Interfund Voucher. The description on the Interfund Voucher should read, "Transfer of amount collected from ________________. This account has been approved for write-off and thus transferred to the Department of Administration in accordance with K.S.A. 75-3728b." Use State of Kansas sub-object code 2790 on the Interfund Voucher.
The law also authorizes the Director of Accounts and Reports to attempt to collect the accounts which have been written off and thus assigned to the Director.
Each department is to provide the same assistance for these written off and assigned accounts as they do for other accounts placed in the setoff program, including answering general debtor inquiries concerning the accounts and participation in any appeal resolution hearings or litigation.
Sufficient business practices should be implemented to detect and stop identity theft from occurring through campus sales and service activities. Pursuant to the Federal Trade Commission's Red Flags Rule the following guidelines are offered to assist in the identification of risks associated with extending credit or establishing account receivables for customers.
"Identity Theft" is a fraud committed or attempted using the identifying information of another person without authority.
A "Red Flag" is a pattern, practice, or specific activity that indicates the possible existence of identity theft.
A "Covered Account" includes all customer accounts or loans that are administered by the University.
"Identifying information" is any name or number that may be used, alone or in conjunction with any other information, to identify a specific person.
In order to identify relevant Red Flags, the University should consider the types of accounts that it offers and maintains, the methods it provides to open its accounts, the methods it provides to access its
accounts, and its previous experiences with identity theft. Please consider the following as potential Red Flags in each of the listed categories:
A. Notifications and Warnings from Credit Reporting Agencies
1. Report of fraud accompanying a credit report;
2. Notice or report from a credit agency of a credit freeze on an applicant;
3. Notice or report from a credit agency of an active duty alert for an applicant;
4. Receipt of a notice of address discrepancy in response to a credit report request; and
5. Indication from a credit report of activity that is inconsistent with
an applicant's usual pattern or activity.
B. Suspicious Documents
1. Identification document or card that appears to be forged, altered or inauthentic;
2. Identification document or card on which a person's photograph or physical description
is not consistent with the person presenting the document;
3. Other document with information that is not consistent with existing customer information; and
4. Application for service that appears to have been altered or forged.
C. Suspicious Personal Identifying Information
1. Identifying information presented that is inconsistent with other information the customer
provides (example: inconsistent birth dates or address field not matching a loan application);
2. Identifying information presented that is the same as information shown on other applications
that were found to be fraudulent;
3. Identifying information presented that is consistent with fraudulent activity (such as an invalid
phone number or fictitious billing address);
4. Social security number presented that is the same as one given by another customer;
5. An address or phone number presented that is the same as that of another person;
6. A person fails to provide complete personal identifying information on an application
when reminded to do so; and
7. A person's identifying information is not consistent with the information that is on
file for the customer.
D. Suspicious Account Activity or Unusual Use of Account
1. Change of address for an account followed by a request to change the customer's name;
2. Payments stop on an otherwise consistently up-to-date account;
3. Account used in a way that is not consistent with prior use;
4. Mail sent to the customer is repeatedly returned as undeliverable;
5. Notice to the University that a customer is not receiving mail sent by the University;
6. Notice to the University that an account has unauthorized activity;
7. Breach in the University's computer system security; and
8. Unauthorized access to or use of customer account information.
E. Alerts from Others
e.g. Notice to the University from a customer, identity theft victim, law enforcement or other
person that the University has opened or is maintaining a fraudulent account for
a person engaged in identity theft.
If the University extends credit, and requests a Consumer Credit Report, University personnel will take the following steps to assist in identifying address discrepancies:
1. Require written verification from any applicant that the address provided by the applicant is accurate at the time the request for the credit report is made to the consumer reporting agency; and
2. In the event that notice of an address discrepancy is received, verify that the credit report pertains to the applicant for whom the requested report was made and report to the consumer reporting agency an address for the applicant that the University has reasonably confirmed is accurate.
In the event University personnel detect any identified Red Flags, one or more of the following steps should be taken depending on the degree of risk posed by the Red Flag:
1. Continue to monitor the account for evidence of identity theft;
2. Contact the customer or applicant (for which a credit report was run);
3. Change any passwords or other security devices that permit access to accounts;
4. Do not open a new Account;
5. Provide the customer with a new customer identification number;
6. Notify the Division of Financial Services.
In order to further prevent the likelihood of identity theft from occurring, the departments should take the following steps in their internal operating procedures to protect customer identifying information:
1. Ensure that websites are secure or provide clear notice that the website is not secure;
2. Ensure complete and secure destruction of paper documents and computer files containing customer account information when a decision has been made to no longer maintain such information;
3. Ensure that office computers with access to accounts receivable information are password protected;
4. Avoid use of social security numbers when possible;
5. Ensure computer virus protection is up to date; and
6. Require and keep only the kinds of information that are necessary for University purposes.
In the event the University contracts with a service provider to perform an activity in connection with accounts or loans receivables, the University will take the following steps to ensure the service provider performs its activity in accordance with reasonable policies and procedures designed to detect, prevent and mitigate the risk of identity theft.
1. Require, by contract, that service providers have such policies and procedures in place; and
2. Require, by contract, that service providers review the University's policies in regard to the FTC's Red Flag Ruling and report any Red Flags to the University department with primary
oversight of the service provider relationship.
Please contact the Division of Financial Services if you have any questions concerning the identity theft prevention steps mentioned in this Chapter.
Please contact the Division of Financial Services, Cashiers and Student Accounts, 785-532-6317 if you have any questions about extending credit; recording, managing, collecting and reporting accounts receivable; or other related matters. Questions regarding the annual reporting of accounts receivable are to be referred to Financial Reporting and Asset Management section of the Division of Financial Services at 785-532-1853. Questions regarding the encumbering of students' records are to be referred to the Office of the Registrar at 785-532-6254.