Cumbria County Council Environment Directorate BUDGET MANAGERS

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Colleen Sharp
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1 Cumbria County Council Environment Directorate BUDGET MANAGERS Debt Collection Responsibilities Refer to Financial Regulations Budget holders have been delegated with the responsibility for: ensuring amounts due to the County Council are factually correct and correctly recorded; collection of debt prior to submission to the monitoring officer as set out below; and maintaining information necessary for the collection of debt. Process When an invoice is raised it becomes the budget holder s responsibility to ensure that the terms and conditions relating to the invoice are met by the Customer. As a legal requirement, reminders are automatically sent out in the following order:- First reminder is sent after 28 days Second Reminder is sent after 38 days Third Reminders is sent after 47 days Final reminder is sent after 56 day These reminders are an aid to collecting debt. If after 28 days the invoice is still unpaid. Contact should be made with the customer in the first instance by telephone, followed by either an or letter. All contact with the customer should be recorded on E5 using the Query insert facility *. This gives an audit trail of attempts to recover debt and is required in the event of a case being sent to a Debt Collection Agency. 1

2 Although Departments must own and manage their debt, advice is available from the finance team. Management Information Each month Nigel Carr will send to the Directorates details of all outstanding invoices with a request that special attention is focused on debts over 90 days old. These will be scheduled in a mix of reports that show disputed, queried invoices, invoices not disputed and taken to the next stage of debt collection (Debt Collection Agency) and any invoices the central team have identified as potential write offs for which the directors must approve and return for CMT authorisation. Any invoices disputed or queried that are 120 days old will be written back against a code on which they were raised UNLESS there is evidence of dialogue with the customer to resolve the problem. Write off approval should be by return of the signed schedule and accompanied by the minutes of the Directorate DMT in which they write off s were approved. Information on Rossendale Debt Collection Agency Cumbria County Council has engaged the services of the above Agency to assist in the collection of External debt. Debt collection through Rossendales is a based on a No Win, No Fee agreement. Rossendales will take 19% of monies recovered by letter, or telephone call Rossendales will take 27% of monies recovered by doorstep visits. The cost of recovery will be charged against the individual cost centres concerned. Should the Agency fail to collect the debt it will be deemed irrecoverable and will be written back to the Budget Managers Cost Centres. In exceptional cases where 100% liability can be proved; the case may be passed through the legal system for Court Action. This can be a long and expensive procedure therefore unless the Legal Service team are confident of success; cases will be referred back to Budget Managers. The office of fair trading rules for Debt Collection Agencies include, that no unresolved, disputed case can be forwarded for collection. Therefore it is important that queried invoices are quickly dealt with. This may mean negotiating a lesser amount due which is fully acceptable and normal commercial practice. Experience shows that the alternative of insisting of full value often results in our receiving nothing. Any negotiation should include the finance manager who will be required to authorise any reduction by credit note. Advice can also be sought from the Central Finance Team. Write Backs 2

These will be scheduled in a mix of reports that show disputed, queried invoices, invoices not disputed and taken to the next stage of debt collection (Debt Collection Agency) and any invoices the

3 The Central Debt Recovery team will write back debt to the original cost centre and nominal in accordance with the Councils Corporate policy. Any write backs will be fully recorded and reported to CMT. Debt will be written back if the following circumstances are evident:- The debt has been incorrectly raised. There is insufficient supporting documentation from the raising department to legally pursue the debt. The directorate recognises the need to follow good practice to clear off the ledger any debt that is not legitimate, as this can overstate the directorate s debt. Legal Services Role Legal services were instrumental in providing the Debt Collection Agency solution to recovering monies outstanding. Therefore only cases that cannot be referred to the agency will be forwarded for a legal opinion. In all cases legal services will expect that queries have been fully investigated and resolutions proposed but rejected by the customer. Full case files will be required by legal services. The earlier cases are referred, the better the chance of recovery. Therefore any case over 90 days old that has not been referred to the collection agency should be considered for legal action. * If anyone would like assistance with using query insert on E5, please contact the Central team on

There is insufficient supporting documentation from the raising department to legally pursue the debt.

4 Invoice Raised If unpaid after 28 days, Contact should be made by Budget Manager by telephone, or letter. All contact with Customer must be recorded on E5 using the Query Insert facility * 28 day First Reminder 38 days Second Reminder 47 days Third Reminder 56 days fourth Reminder 90 days Accounts Manager Review Disputed Debt with insufficient backup evidence Undisputed Debt Disputed Debt with full Case File Write Back Legal Services Debt Collection Agency 4

Second Reminder 47 days Third Reminder 56 days fourth Reminder 90 days Accounts Manager Review Disputed Debt with

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