BURSAR S DIVISION ACCOUNTS RECEIVABLE

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1 BURSAR S DIVISION ACCOUNTS RECEIVABLE The Accounts Receivable Department is responsible for the control, collection and maintenance of all related records concerning money due the University from goods sold or services rendered by certain University departments, including some credit card sales, sponsor billing for student account balances, returned checks and specific cost for reimbursable type agreements. Summary of Major Accomplishments Receivables and Write-Offs In Fiscal Year 2010, accounts with a balance of $3,000 or less were written off for a total write-off of $143, ($125, from reserve and $17, from surplus accounts). The reserve for uncollectible accounts increased by $62, (9%) from FY 2009 to FY In FY 2010, the University recovered 3% while writing off 16% of the reserved balance that can be attributed to a high number of Veterinary Medicine accounts that were returned from both collection agencies. Of the accounts the Accounts Receivable Department manages directly, seven (nonstudent) returned item accounts ($2,039.00) and 57 Veterinary Medicine accounts ($76,599.12) were sent to collections for the first time. Seventy-one Veterinary Medicine accounts ($102,148.50) were sent to a second collection agency. In addition, Accounts Receivable assisted various departments with sending their past due accounts to collection; these amounted to nine accounts totaling $101, Retiree Benefits Beginning June 2009, certain terminated employees became eligible for government assistance in paying their COBRA insurance premiums. The ex-employees, if eligible, are only responsible for 35% of their premiums. The remaining 65% is offset to a payroll account that is used to credit payroll taxes owed. To allow for accurate reporting, the Accounts Receivable system reports the full premium due for each COBRA assistanceeligible account, and then manual adjustments are made to the paper statements mailed each month. Manual entries are made in the system to reflect the payments and the credits for the remaining portion. Credits for the 65% are done only when payment has been received. The department is working on automating this process and hopes to complete this in FY Return Item Fee Increase The Accounts Receivable Department received approval at the end of FY 2009 to increase the fee for returned items. Under this new rate, and in conformity with state guidelines, the University can assess $30 or 5% of the face value of the instrument as a service fee for returned items. In FY 2010, this increase produced just over $7,000 in additional revenue. This fee increase was implemented at the beginning of FY It would appear the majority of these fees have been paid off. F-30

2 Collections During FY 2010, the Bursar s Office only had to write off $12, in past due student account balances (of which $5, was included in the reserve last year). Recovery on these accounts has improved now that past due accounts are being sent in a timelier manner. An increase in bankruptcies has been noticed over the last fiscal year and it is anticipated that this will continue through the following fiscal year. Summary of FY 2011 Goals Collection Procedures An emphasis continues to be placed on the collection of all outstanding receivables. In addition to collection of receivables currently managed centrally, the department will improve collection procedures with the rest of campus in the coming year. It will be imperative to implement a new receivable system for campus-wide use in order to move forward in these efforts, and it is the department s hope that this task will be a priority among the financial systems requests with ADDM. An outstanding request remains open regarding a new Accounts Receivable system. Due to the fact that this system is considered part of the financials, the request competes among the other financial system requests. The department remains hopeful this will become a priority in the coming year. In FY 2011, an increased effort will be made in the collection of loan receivables. The Accounts Receivable department will work closely with the Loan Department to assess the status of outstanding student loan receivables. Current collection procedures and laws will be reviewed to determine how best to handle these accounts. Retiree Benefits In FY 2011, Accounts Receivable will strive to automate the manual processes required to account for the COBRA premiums and bill the appropriate amounts as a result of the new government assistance available for COBRA-eligible recipients. Due to limited resources and other requests, this request tends to get pushed aside for higher priorities. Accounts Receivable System Efforts to analyze the current needs in an Accounts Receivable system continue, but personnel changes and shifting priorities in both the Bursar s Office and ADDM have slowed these efforts. Accounts Receivable has requested that a more comprehensive accounts receivable system be developed. After the initial analysis, a decision will be made on where this significant project fits into the list of priorities for ADDM. Student Account Receivables The complete automation of the collection/write-off process is in progress. Accounts Receivable hopes to complete phase II of this project by the end of FY In addition to programming needs, the Bursar s Office/Accounts Receivable staff has observed an increase in the number of returned checks for payment on tuition and fees/student account balances over the past fiscal year as a means to avoid schedule F-31

3 cancelation. The Bursar s Office is working on receiving approval to proceed with a second schedule cancelation beginning with Spring Semester It is important that students not receive grades without paying accounts in full; otherwise, due to the change in bankruptcy laws, the University stands a good chance of never being able to collect these funds. Historically, the University used to process a second cancelation and was able to avoid this situation upon the implementation of the student account system. However, it appears Accounts Receivable will have to request approval to administer this second drop in the coming semesters. F-32

4 Statistical Information Below is the aged analysis as of June 30, 2010 for receivables maintained by the Accounts Receivable department. THE UNIVERSITY OF GEORGIA UNIVERSITY RECEIVABLES SUMMARY - AGED ANALYSIS June 30, 2010 TOTAL CURRENT OVER RECEIVABLES MONTH DAYS DAYS 90 DAYS I. CURRENT FUNDS A. EDUCATIONAL AND GENERAL 1. RESIDENT INSTRUCTION PHYSICAL PLANT $ 146, $ 112, $ 17, $ 5, $ 11, BUSINESS SERVICES 11, , , , OTHER SALES AND SERVICES 1,890, ,493, , , , RETURNED CHECKS 36, , , , RETURNED CHECKS SERVICE CHARGE 2, , COOPERATIVE EXTENTION SERIVCE OTHER SALES AND SERVICES MARINE EXTENSION OTHER SALES AND SERVICES VETERINARY TEACHING HOSPITAL VETERINARY CLINIC 299, , , , , B. AUXILIARY ENTERPRISES OTHER SALES AND SERVICES TOTAL ACCOUNTS RECEIVABLE 2,388, ,638, , , , F-33

5 Exhibits summarizing statistical data are presented on the following pages: Exhibit 1 - Accounts Receivable Collection Period FY 2010 Exhibit 2 - Accounts Receivables as of June 30, 2010 Exhibit 3 - Other Receivables as of June 30, 2010 Exhibit 4 - Accounts Receivables Turnover Exhibit 5 - Student Accounts Receivables as of June 30, 2010 Exhibit 6 - GSFIC Receivable Balance as of June 30, 2010 Organizational Chart F-34

6 EXHIBIT 1 EXHIBIT 2 F-35

7 EXHIBIT 3 EXHIBIT 4 F-36

8 EXHIBIT 5 EXHIBIT 6 F-37

9 ACCOUNTS RECEIVABLE ORGANIZATION CHART Assistant Bursar Thérèse Hodges Senior Accountant Susan Caldwell Sr. Accounting Tech Ann Smith F-38