HomeMy WebLinkAboutMINUTES - 09091986 - 1.65 Tlp: .} BOARD OF SUPERVISORS Contra
FROM: Donald L. Bouchet, Auditor-Controller Costa
By: Kenneth J. Corcoran, Assistant Accounting Manager
DATE: August 13, 1986 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 for the period from January 1 , 1986 through
June 30, 1986, in the amount of $41 ,743.61 .
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 475 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 the write-off recommendation can be summarized as follows:
A. Debtor Deceased - $1 ,500.00
This is an account where the debtor has died and there has been verification
by staff that there are no assets available against which a creditor's claim
could be filed.
B. Determined Uncollectible by Originating Department - $4,697.23
These are accounts where the County department which originated the billing has
determined that the account should be written off. The primary reason for
these write-offs involves cases where the billing statements are returned un-
deliverable by the post office and efforts to identify the current location
of the debtor are unsuccessful . .
C. Bankruptcy - $1 ,748.73
These are cases where an order from the bankruptcy court requires the County
to write-off the account.
CONTINUED ON ATTACHMENT: XX YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATIOVIk BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S)
ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
XUNANIMOUS (ABSENT ) I HEREBY CERTIFY THAT THIS IS A TRUE
AYES: NOES:, AND CORRECT COPY OF AN ACTION TAKEN
ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD
OF SUPERVISOR ON THE DATE SHOWN.
CC: Audi tor-Control l er ATTESTED
Administrator PHIL BATCHELOR, CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
M382/7-83 BY DEPUTY
-2-
TO: Board of Supervisors
SUBJECT: Write-off of Delinquent General Accounts Receivable
D. Determined Uncollectible by the Collection Agency - $31 ,292.00
The County' s outside collection agency annually returns accounts to the
County 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.
E. Small Claims Judgment in Favor of Defendant - $2,505.66
These are cases 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.
F. Balance $10 or Less - ($0.01 )
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,
additional collection efforts, including 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.
It should be noted that the Board' s authorization to write-off accounts only
relieves the department originating the claim from further collection efforts.
The Board's action does not relieve the delinquent debtor from responsibility
for the debt. Therefore, the account may be reinstated at any time if con-
ditions with the debtor change.
V. CONSEQUENCES OF NEGATIVE ACTION
If the recommended action is not taken, there will e a slight increase in
monthly General Accounts Receivable processing cos`.-.s. Also, leaving these
accounts on the file will cause some decrease in clerical efficiency.