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HomeMy WebLinkAboutMINUTES - 09011987 - 1.51 TO: hOARD OF SUPERVISORS FROM: DONALD L. BOUCHET, AUDITOR-CONTROLLER Contra By: Kenneth J. Corcoran, Assistant Accounting Manager Costa DATE: AUGUST 12, 1987 County SUBJECT: WRITE-OFF OF DELINQUENT GENERAL ACCOUNTS RECEIVABLE SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION I . RECOMMENDED ACTION It is recommended that the Board of Supervisors authorize the write-off of delinquent accounts receivable in the amount of $27,680.34. This includes the months of January through June, 1987. II. FINANCIAL IMPACT In accordance with generally accepted accounting principles the County maintains a Reserve for Bad Debts account. Delinquent and uncollectible accounts receivable are charged against this reserve account when they are written-off. As a result, there will be no financial impact on current year revenue if this write-off is authorized. III. REASONS FOR RECOMMENDATION Approval of the recommended action will allow approximately 150 delinquent accounts to be written-off and purged from the file of active accounts. This will reduce computer processing time and will allow more effort and concentration to be focused on the collection of current accounts. The reasons for write-off recommendation can be summarized as follows: A. DECEASED - NO ASSETS - $189.00 These are accounts where the debtor has died and there has been a verification by staff that there are no assets available against which a creditor's claim could be filed. B. DETERMINED UNCOLLECTIBLE BY AUDITOR-CONTROLLER - $92.16 These are accounts where the Auditor-Controller has determined the accounts should be written-off. It has been determined that the cost of further collection efforts will exceed the revenues realized. C. DETERMINED UNCOLLECTIBLE BY ORIGINATING DEPARTMENT - $2,041 .82 These are accounts where the County department which originated the billing has determined that the account should be written off. The CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF B RD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON 1987 APPROVED AS RECOMMENDED X_ OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS (ABSENT .Zzr _) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CC: County Administrator — ATTESTED SEP 11997 Auditor-Controller PHIL BATCHELOR, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY � DEPUTY M382/7-83 Ll -2- TO: BOARD OF SUPERVISORS SUBJECT: Write-off of Delinquent General Accounts Receivable main reason for this write-off recommendation is that the billing statements are undeliverable by the post office and efforts to identify the current location of the debtor are unsuccessful . D. DETERMINED TO BE IN COUNTY'S BEST INTEREST - $2,374.71 These are accounts where it has been determined (primarily by County Counsel ) not to be in the County's best interest to pursue. E. BANKRUPTCY - $11 ,684.64 These are accounts where an order from the bankruptcy court requires the County to write-off the account. F. COMPROMISE SETTLEMENT - $5,077.63 These are accounts where an amount less than the total amount billed is accepted as payment in full . The difference between the billed and payment amounts is recommended for write-off. Such compromise settlements are accepted only after extensive review by the originating department, the County's Lien Committee and/or County Counsel ' s office. G. DETERMINED UNCOLLECTIBLE BY COLLECTION AGENCY - $1 ,014.25 These are accounts where the County' s outside collection agency has returned them as uncollectible. This recommendation by the collection agency is for various reasons, the most common including that the debtor has "skipped" or has filed bankruptcy. H. STATUE OF LIMITATIONS - $4,431 .76 These are accounts which were taken to Small Claims Court for judgment. By law, the small claims judgments expired after a 10 year period. I . SMALL CLAIMS JUDGMENT IN FAVOR OF DEFENDANT - $765.10 These are accounts where the County has taken the debtor to Small Claims Court, and all , or a portion of, the account has been ruled in favor of the defendant. J. BALANCE $10.00 OR LESS - $9.27 Delinquent accounts with balances of $10 or less are recommended for write-off because further collection effort cannot be justified on a cost-benefit analysis. This -also includes accounts with credit balances of $10 or less, which have been written-off rather than refunded due to cost and inability to locate. IV. BACKGROUND Many County departments request the Auditor's Office to bill for services they have provided. This billing is accomplished through the General Accounts Receivable system. After three invoices have been sent out with no response, addtional collection efforts incl-uding. court action and assignment to a collection agency, are initiated. For the reasons noted in Section III, it is periodically necessary to formally write- off certain accounts. Historically, authorization to write-off these accounts has been done either quarterly or semi-annually. -3- TO: BOARD OF SUPERVISORS SUBJECT: Write-off of Delinquent General Accounts Receivable It should be noted that the Board's authorization to write-off accounts only relieves the department originating the claim from further collec- tion efforts. The Board's action does not relieve the delinquent debtor from responsibility for the debt. Therefore, the account may be rein- stated at any time if conditions with the debtor change. V. CONSEQUENCES OF NEGATIVE ACTION If the recommended action is not taken there will be a slight increase in monthly General Accounts Receivable processing costs. Also, leaving these accounts on the file will cause some decrease in clerical efficiency.