DCCCD BUSINESS PROCEDURES MANUAL

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1 P a g e 9 Revision Log Sub-Section Revision Start Revision End Date Posted Summary of Changes All 10/ /25/05 04/25/05 The entire Accounts Receivable section (including all subsections) was revised to reflect current procedure and policy and reorganized for efficiency /13/05 03/14/05 04/25/05 Collections Procedures updated to be consistent with new District procedures found in section of the BPM All 05/01/09 11/20/09 11/20/09 Changed title and amended section with procedures for credit card chargebacks and chargeback reversals.

2 P a g e 10 RETURNED CHECK RECEIVABLES Establishing Returned Checks Receivables A. A returned check receivable is established when a check, used to pay for any district service or commodity, is returned by the drawer s bank unpaid. 1. After the first time a check is returned, the District s bank re-deposits the check automatically. 2. If the drawer s bank returns the check the second time the District s bank sends the check to District Accounting. 3. District Accounting prepares a journal entry for returned checks not related to a receivable. a. If the check was originally deposited to a student club account (Debit Club Account, Credit Cash) b. For all others (Debit Returned Checks Receivable, Credit Cash) 4. District Accounting prepares a cash receipt for returned checks related to a specific receivable. [Debit: Returned Checks Receivable (including the returned check fee) and Credit: Cash and Returned Check Fee Income] Maintenance of Returned Check Receivables A. District Business Office Responsibilities: 1. Prepare and mail a returned check notice (Notification A) to the name and address as indicated on the returned check. Make sure to include the following: a. The amount and date of the check b. A returned check fee of $25.00 will be added c. An explanation that redemption of the check (with cash or money order) shall be made to the location business office. d. Block student's enrollment records using the returned check code. NOTE: If the student already has a returned check block" within the past three (3) years, the student must be placed on a cash only block. 2. Forward a copy of the Returned Check Notice to the location business office.

3 P a g e 11 B. Location Business Office Responsibilities: 1. Upon receipt of the returned check notice and attached returned checks, the location business office should immediately perform the following tasks: a. Reconcile the amount listed on the transmittal slip to the actual amount of returned checks received from the District Accounting Office. Inform District Accounting of any discrepancies. 2. Review the student BLOCK screen on a scheduled basis, as indicated below, to determine if students that are currently on a CASH ONLY block may be cleared (i.e. checks may be accepted from these students). This review shall be accomplished according to the following schedule: a. The District business office will generate a system report two weeks prior to the beginning of each semester that lists students whose records have been blocked because of a CASH ONLY block. b. The location business office shall review this report and remove from CASH ONLY status those students whose records have been blocked in excess of 36 months, and the debt has been paid in full. (Only the campus originally establishing the block will be authorized to remove the block.) c. A student may request a review of their individual status at a time falling between the above scheduled reviews. The location business office may do so and remove the CASH ONLY if the account qualifies (see 2.b above). Returned Check Collections Procedures See section of the Business Procedures Manual for all collections guidelines related to accounts receivable. Guidelines for Credit Card Chargebacks These guidelines have been developed to define the responsibilities of the District Service Center Account Receivables Department and the location business offices. Definitions A credit card chargeback results when a cardholder files a dispute regarding a credit card charge and the credit card issuer refunds the charge to the cardholder.

4 P a g e 12 District Account Reconciliation Responsibilities Chargebacks are discovered when the District Account Receivables Department receives chargeback information from credit card companies third party vendors. Once chargebacks are received, the follow actions should be taken: 1. Retrieve transaction details from payment system. The credit card number on the chargeback notification is used as a cross reference. 2. Determine the District location associated with the original payment. a. If the payment originated at a location, transaction details are sent to the location business office for investigation. b. If payment originated at the DCCCD website, the District Accounts Reconciliation Department may choose to dispute the claim. 3. Send copies of all chargebacks to the District Receivables Accountant Location Business Office Responsibilities The location receives chargeback notifications from the District Account Receivables Department. Once a notification is received, the location business office: 1. May choose to dispute claim 2. Research dispute to begin resolution 3. Send letter of disapproval to Credit Card Company District Account Receivables Responsibilities After receiving the copies of any chargebacks from the District Reconciliation Department, the District Receivables Accountant should take the following actions: 1. Retrieve the student s account information to determine semester the original payment occurred. 2. Send the chargeback information to a District Business Office cashier for system entry. The entry will indicate a debit to student account. 3. Notify the District Receivables Accountant once the chargeback has been entered into the system.

5 P a g e Determine what action to take against student account. a. If the chargeback resulted in debit balance, the appropriate block should be placed on the account. b. At a minimum, the block record should include the term, the date the chargeback was received, the amount of the chargeback, and the case number associated with the chargeback 5. Maintain proper documentation for chargeback and action taken. Guidelines for Credit Card Chargeback Reversals These guidelines have been developed to define the responsibilities of the District Service Center Account Receivables Department and the location business offices. Definitions A credit card chargeback reversal results when a credit card issuer returns funds after a chargeback dispute has been settled in favor the DCCCD. District Account Reconciliation Responsibilities Chargeback reversals result from are discovered when the District Account Receivables Department receives chargeback information from credit card companies third party vendors. Once chargebacks are received, the follow actions should be taken: 1. Receive chargeback reversal from credit card companies 3rd party vendor. Information received from the card company s vendor will include details from the original transaction that resulted in a chargeback. (For Discover, an activity log is checked daily for chargeback reversals.) 2. Determine the District location associated with the original payment. a. If the payment originated at a location, transaction details are sent to the location business office for investigation. b. If payment originated at the DCCCD website, the District Accounts Reconciliation Department will send copies of all chargeback reversals to the District Receivables Accountant

6 P a g e 14 District Account Receivables Responsibilities Once chargeback reversals are received from the reconciliation accountant, the following actions should be taken: 1. Match the chargeback reversal with the original chargeback. 2. Send the reversal information to the cashier for system entry. 3. Determine what action needs to be taken against the student s account. a. If a block was placed on the account after the original chargeback occurred, that block will need to be removed. b. If the chargeback reversal creates a credit balance, a refund will need to be issued to the student. 4. Maintain proper documentation for chargeback reversal and any action(s) taken.