Policy Number: II-1
Effective Date: October 8, 2020
Last Reviewed: November 14, 2024
Responsible Dept.: Financial Services
A signed copy of this policy is available in the President’s Office.
Purpose
The purpose of this document is to outline policy as it relates to the handling, collecting, recording, depositing, and/or accounting for monies received or disbursed by the college, including but not limited to accounts receivable and accounts payable transactions.
Applicability
This policy is applicable to all students, faculty and staff at Virginia Western Community College, including those at off-campus facilities.
Policy
All college employees shall comply with Commonwealth of Virginia Policy as outlined in the CAPP Manual Topics 20200- Cash Receipts Accounting, 20300-Cash Disbursement Accounting, 20400-Interagency Transfers and 20500-Accounts Receivable (as it relates to the handling, collecting, recording, depositing, and/or accounting for monies, including but not limited to accounts receivable and accounts payable transactions).
Procedures
A. Billings and Accounts Receivable:
- Objective
To collect accounts receivable in a timely manner in order to keep outstanding balances to a minimum, to adhere to the collection policies and guidelines established in the Commonwealth of Virginia CAPP Manual Topic 20505 and the Virginia Debt Collection Act. - Operating Procedures
- The Accounts Receivable GL journal entries are recorded daily to ensure that quarterly AR reports reflect the actual receivable balance.
- College accounts will be billed within two (2) weeks after the add/drop period has ended or on an as needed basis. Invoices will include a remittance of 30 days from date of invoice. Accounts are recognized as being past due if payment is not received within 30 days. Invoices not paid by the due date will be sent a notice requesting immediate payment.
- Procedures for adjusting doubtful accounts and write-offs to accounts receivable:
- Each semester, all receivables past due will be reviewed by the Coordinator of Student Accounts to assess their collectability. Those receivables that are considered to have a low probability of collection and have been submitted to the Set-Off Debt Office at least once (for individuals) will be written off the students SIS record and reported on the quarterly receivable report for the college.
- Management has established an allowance for doubtful accounts that reflects the amount of an agency’s accounts receivable that management estimates will be uncollectable. The establishment of an allowance account ensures that the Agency’s accounts receivable are not overstated for financial reporting purposes.
- The President has final authority to “write-off” past due accounts receivable. These “write-offs” will still remain as a legal obligation to pay, they will only be “written-off” for accounting purposes.
- (1) Write-offs must be recorded on the quarterly Receivables Summary Report. Records must be maintained detailing those accounts written off including original indebtedness documentation – Request for Permission to write-off.
- (2) Collections on written-off accounts will be treated as current revenue and be deposited in the usual manner. Those accounts that have been written off will be reversed by Financial Services Staff so that payment can be processed. The Quarterly Receivables Summary Report should reflect such transactions as Recoveries on Accounts Written-Off in Prior Semesters in the Analysis of Uncollectable Debts.
- (3) Those accounts over $25.00 which have been written-off must be resubmitted annually to Set-Off Debt for collection.
- Federal Grants or Contracts
- Federal funds will be requested, deposited, and disbursed in accordance with the appropriate federal/state regulations.
- The College will request payment as expeditiously as possible if reimbursable methods of payment are used.
B. Processing and Deposit of Cash Receipts:
- Objective
- To process and deposit promptly all cash receipts.
- To report to the Department of Treasury all state deposits in the manner prescribed by the state Treasurer.
- Operating Procedures
- Funds received shall be deposited on a daily basis.
- State funds received that are combined with local funds shall be deposited into the local clearing account. A local funds check will then be processed in order to remit the state funds portion back to the state account.
- Checks will be accepted subject to collection for authorized charges only. A check in excess of the amount due, which would necessitate a return of cash to the payer would not normally be accepted. The Business Manager or the Student Accounts Coordinator must approve exceptions. Cashing of checks for any reason and by any person is not permitted.
- Procedures for processing returned checks.
- NSF check documentation is sent from the bank to the Accounts Payable Tech. All NSF checks are automatically debited from the local funds account along with all related bank fees. At this time the NSF return is recorded in the local funds bank account. The Accounts Payable Tech then requests the funds be returned to local funds from state funds using the following chartfields 10300/100800/40151. The Accounts Payable Tech then passes the NSF information to the Fiscal Tech/Cashier for collection.
- (1) The Fiscal Tech/Cashier initially tries to contact the student by telephone to inform him/her that the bank has notified us of a returned check (NSF).
- (2) A letter is sent by the Fiscal Tech/Cashier to the student, requesting payment to the college of the amount of the returned check and service charge. The student account in the Student Information System (SIS) is flagged with a Return Check Service Indicator. A Service Indicator “No Check Presentation” is added to the student account until the NSF check is collected. Continued returned checks will result in a loss of the issuers’ ability to pay by check.
- (3) When cash is collected from the issuer of the returned check, the cash is deposited in State bank account back to the 10300/100800/40151 in order to offset the above refund to local funds. Service Charges are assessed in accordance with VCCS Policy 4,2.3.1 – Procedures Regarding Bad Checks. Service charge fees, less fees paid to the bank, are deposited into state SIS Account 10300 101050 40758.
- (4) If collection efforts have failed, the original payment posted in the students account will be reversed in SIS resulting in a balance due on the students account. Reimbursement to the state is pursued through the college’s Collection Agency and the Department of Taxation. A negative service indicator “Debt to College” remains on the student account until restitution is received.
- NSF check documentation is sent from the bank to the Accounts Payable Tech. All NSF checks are automatically debited from the local funds account along with all related bank fees. At this time the NSF return is recorded in the local funds bank account. The Accounts Payable Tech then requests the funds be returned to local funds from state funds using the following chartfields 10300/100800/40151. The Accounts Payable Tech then passes the NSF information to the Fiscal Tech/Cashier for collection.
C. Revenue Collection – Auxiliary:
- Objective
- To insure that monies owed the college through operations are received accurately, timely and in accordance with the existing contractual agreements.
- Operating Procedures
- The Contracting Officer for auxiliary contracts (i.e. vending, food sales, bookstore, etc.) shall monitor the timeliness of receipts and verify that payments are based upon established contract commission rates.
- A separate spreadsheet shall be maintained for each vendor that will include the minimum information listed below:
- Vendor Name
- Local Funds Revenue Account
- Outline or Schedule of Payments due
- Date and Amount of Payment received
- Verification of compliance with Contract Document
- All funds shall be deposited promptly in Local Funds.
- Funds shall be accounted for and included in the finance reports provided to the College’s Local Advisory Board.
- Detailed reports, as described above, shall be utilized to support auxiliary collections and financial reporting to the President, members of the Local Advisory Board Finance Committee, and members of the Local Advisory Board and filed for reference along with contractual documents.
D. Accounts Receivable/Third Party Contracts:
- Third Party Contracts
- A written contractual agreement shall be required in order to establish a Third Party Contract in SIS that defers the student’s tuition and fee charges to a Third Party. Virginia Western Community College’s contract or the Third Party Contract (TPC) agreement will be used to document the arrangements unless a third party document is received that includes the required information as the VWCC TPC.
- With the presentation or receipt of a written contractual agreement, the Cashier or Accounts Receivable Technician shall place a term specific DO NOT DROP (DND) service indicator on the student’s account. If the Cashier receives the contract and places the DND on the student’s account, the Cashier will then forward the contractual agreement to the Accounts Receivable Technician for handling.
- The Accounts Receivable Technician shall construct a TPC in SIS and invoice the contractor once the last day to drop or receive a refund has passed.
- In every case, an attempt will be made to protect all known students who may be the beneficiary of a TPC payment situation with a DND Service Indicator, prior to running an enrollment cancellation.
- The Accounts Receivable Technician shall have the authority to place term specific DND Service Indicators beyond the current semester. These service indicators shall be managed by the Accounts Receivable Technician through SIS queries that identify students with DND’s posted on their student account.
- Enrollment Cancellation:
- An enrollment cancellation schedule shall be developed in advance of each semester by a committee consisting of Financial and Administrative Services, Financial Aid Office, Enrollment Office, and the IT Help Desk.
- The schedule will be finalized by the Student Accounts Coordinator and shared with the Enrollment Office, Financial Aid Office, IT Help Desk, the V. P. of Academics Office, the Dual Enrollment Coordinator and other college staff that may benefit from the knowledge of the enrollment cancellation schedule.
E. Disbursements/Accounts Payables/Shared Service Center (SCC):
- Objective
- To promote effective disbursement policies.
- To disburse funds consistent with the Commonwealth of Virginia Prompt Payment Act and Shared Services Center procedures.
- Operating Procedures
- An invoice will be received and approved for payment with verification that the goods or services have been received by the end-user through eVA. If the purchase was not made through eVa the invoice or packing slip can be signed and dated by the end-user and indicated as complete by writing ‘okay to pay’ on the face of the document.
- The due date on all invoices shall be determined in accordance with the Prompt Payment Act. The due date shall be set as 30 days from receipt of the goods or service or the date of the invoice, whichever is the latest. The 30 day prompt payment window may be reduced or modified based upon vendor discount, or documented benefit to the agency, or contractual agreement.
- Invoices will be submitted for payment to Shared Services. Invoices not received at the SSC site will be submitted for payment per SSC instructions. Upon receipt of a valid invoice and receiving report the payment will be created by SSC. Local funds invoices are currently being paid on campus however, the same documentation is required as state disbursements.
- Discounts will be taken whenever possible. Every effort will be made to negotiate realistic terms of payment.
- Interest penalties for late payments to vendors will be paid on a timely basis. An explanation for the payment of interest penalties will be made a part of the voucher file.
F. Administrative and Management Review:
- Objective
- To provide adequate resources to administratively support the statewide cash management program.
- To provide the appropriate management review to ensure that the meaning and intent of the Commonwealth Accounting Policies and Procedures are carried out at Virginia Western Community College.
- Accounts will be reviewed by the Student Accounts Coordinator on a quarterly basis to determine if uncollectible (have a net realizable value of zero) status. Any uncollectible accounts will be approved by the President and/or his designee and will be written off of the financial accounting and reporting records of the institution. Individual accounts must be submitted to the Department of Taxation’s Set Off Debt program for collection.
- Operating Procedures
- The College will maintain written procedures to ensure the effective management of State billings, collections, deposits and disbursements.
- VCCS and State auditors will review our adherence to these procedures as necessary.
