FMPM 271 Debt Management

Scope

To set out the requirements for managing the University’s debtors.

Definitions

Debtor

Student Debtor

Procedure

In managing debtors the University must:

• ensure that proper accounts and records are maintained for each debtor of the University;

• promptly bring all debts to account in the accounting records of the University; and

• promptly instigate debt recovery procedures if the debt is not paid within the University’s normal terms of trade.

1.   Student Related Debts

Student Services manage student related debts owing to the University.  This may include library debts (refer to separate Library Related Debts section below)

When managing student related debts the following Acts, Policies and Procedures must be adhered to:

University Policies and Procedures

• FMPM 270-2 Accounts – Student Debtors – Penalties
• Student Fee Payments and Refunds Policy
• Library Use Policy
• Domestic Fee Payments and Refunds Procedure
• International Tuition Fee Payments and Refunds Procedure
• Incidental Fee Payments and Refunds Procedure
• Student Services and Amenities Fee Payments and Refunds Procedure
• OS-HELP Loans Procedure

Legislation

• Higher Education Support Act 2003; and
• Education Services for Overseas Students (ESOS) Act 2000

2.   Library Related Debts

The University’s Library Use Policy must be adhered to.  In addition, library fines and debt collection processes apply to all internal (JCU students and staff) and external library borrowers borrowing from the Cairns and Townsville libraries.

The Library reserves the right to recover library materials and payment of outstanding fees in excess of $50.

Notices are sent by email / SMS daily.  Print notices are only sent where an email address is not supplied or at the request of the client.

Notices timeline:

• Pre-overdue notice sent 1 day before the item is due.
• First notice sent 1 day after the item is due / lost / damaged.
• Second notice sent 15 days after item is due / lost / damaged.
• Final notice sent 29 days after item is due / lost / damaged.
• Referred to debt collection after 45 days (for debts greater than $50).

3. Debt Collection

The Debt Collection Report is extracted on a monthly basis for outstanding library accounts of $50 or more.  Debts are then referred to a debt collection agency. Debts older than  3 years are proposed for write off as part of the university’s formal write off process (refer below).

4. Parking Fine Related Debts

JCU’s traffic and parking regulations are defined and regulated under the James Cook University Act 1997, the State Penalties Enforcement Act 1999, and the State Penalties Enforcement Regulation 2014. Estate Office manage parking fine debts and broadly, the process is:

• at 28 days unpaid, if the vehicle is recorded in our database, an email reminder is sent to the owner
• at 28 days unpaid, if the vehicle is not recorded in our database, a referral is made to CITEC to identify the owner of the vehicle
• all debts are then referred onto State Penalties Enforcement Registry (SPER)
• any debts greater than 12 months are referred for write off as part of the University’s formal write off process (refer below)

5. General Debtors

Period of Credit

The University’s credit terms for invoices are strictly 30 days from the date of invoice.

Credit Control

To facilitate the recovery of debts, the following process will normally be followed for any debtor who has outstanding monies owing to the University:

• at 30 days overdue, a letter is sent reminding the debtor of our trading terms and obligation to pay the amount outstanding
• at 45 days overdue, another letter is sent followed up by a phone call to the debtor.  Accounts Receivable, where required, may contact (by phone) the person or team within JCU to:
  • communicate status of outstanding debt;
  • identify any issues preventing collection;
  • seek assistance in the debt collection process

Grants Finance should be notified at the same time if the invoice relates to a grant.

• at 60 days overdue, a letter of demand is sent (signed by either the Chief Financial Officer or Deputy Director, Financial and Business services) asking for immediate full payment and advising failure to make payment may result in referral to an external debt collection agency without further notice.  A follow up phone call to the debtor will be made:
  • confirming receipt of  letter;
  • commitment to a payment date;
  • payment plan offered if deemed appropriate
• at 75 days overdue:
  • contact relevant JCU staff member (including JCU Connect for grant related debt) regarding the intent to refer to external debt collection agency and financial impact on Organisational Unit;
  • the customer’s credit standing recorded on the University’s system will also be reviewed and normally downgraded
• notes to be recorded against the debtor and outstanding invoice in Finance One for all communication (including phone calls, emails, letters) with the debtor and JCU contact.

6. Disputed Invoices

In resolving disputed invoice amounts a request for further information will be forwarded to the officer who raised the invoice.   If a response is not received within 14 days, a credit note will be raised and any further negotiation will be the responsibility of that initiating officer.

7. Credit / Adjustment Notes

A Credit/Adjustment Note may be raised with the approval of the Financial Delegate.   Credit/Adjustment Notes are raised to:

• record the return of goods or services; and
• record a change in value of an invoice raised.

8. Repayment of Debt by Instalment

• All amounts owing to the University should be paid in full immediately when they become due. If this is not possible, it may be appropriate to negotiate an instalment agreement. Instalment agreements must be approved by the Chief Financial Officer.
• Agreements will be confirmed in writing (email at a minimum).
• Where debtors subsequently default on the instalment agreement, the matter will be referred to an external debt collection agency. The JCU contact will be advised.
• Accounts Receivable will maintain records for each debtor repaying debts by instalments.

9.  Debts deemed as Non-recoverable

• The Chief Financial Officer may approve the non-recovery of a debt and then only under any of the following conditions:
  • the non-recovery has been authorised by an Act;
  • the delegate is satisfied that the debt is not legally recoverable; or
  • the delegate considers that it is not economical to pursue recovery of the debt.
• Where the debt could be regarded as uneconomical to pursue, non-recovery of the debt could be approved.
• The act of approving the non-recovery of a debt does not expunge the debt at law. If the circumstances that lead to the debt being irrecoverable materially change, then recovery of the debt may be reinstated.
• An amount owed by a bankrupt, or a company in liquidation, should not be formally regarded as irrecoverable until the bankrupt has been discharged from bankruptcy, or the liquidation of the company has been finalized or advice of the extent of the likely distribution of funds has been received from an official receiver or trustee in bankruptcy, or from a liquidator in the winding-up of a company. Whilst awaiting bankruptcy or liquidation proceedings, the debt will be regarded as a doubtful debt in the University’s financial statements.

10. Debt Collection

Financial and Business Services may refer outstanding debts to an external debt collection agency. Any costs relating to debt collection will be charged to the Organisational Unit responsible for the debt.

11. Payment by Debtor

Where invoiced payments are received by an Organisational Unit it must:

• immediately forward them to the Cashier for processing; and
• ensure that the invoice number to which the payment relates is clearly identified.

12. Refund of an Overpayment

Where invoices have been overpaid, a refund (including any applicable GST) is to be processed promptly.

Minor overpayment amounts (eg. less than $20) are not normally refunded unless requested by the debtor. The refund of these amounts is uneconomical.

Larger overpayments are referred to the Organisational Unit concerned to ascertain whether the debtor is likely to receive further services from the University. If so the overpayment may be offset against further charges otherwise a refund will be issued.

If a refund cannot be made to the debtor for any reason, then approval is sort from Finance Committee to transfer the credit amount to central University funds.

13. Debt Write Off (All Sources of Debt)

The Chief Financial Officer may approve the write off of debts up to and including $50,000. Debts of more than $50,000 require the approval of Finance Committee prior to write off (refer FMPM 920: Policy - Losses).

For enquiries in relation to this Finance Procedure please contact AccountsReceivable@jcu.edu.au

Related documents

FMPM 270-2 Accounts – Student Debtors – Penalties

Student Fee Payments and Refunds Policy

Library Use Policy

Domestic Fee Payments and Refunds Procedure

International Tuition Fee Payments and Refunds Procedure

Incidental Fee Payments and Refunds Procedure

Student Services and Amenities Fee Payments and Refunds Procedure

OS-HELP Loans Procedure

Legislation

Higher Education Support Act 2003

Education Services for Overseas Students (ESOS) Act 2000

Administration

NOTE: Printed copies of this procedure are uncontrolled, and currency can only be assured at the time of printing.

Approval details

Modification History