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HomeMy WebLinkAboutMINUTES - 05211985 - 1.69 TO: � BOARD OF SUPERVISORS FROM: Donald L. Bouchet, Auditor-Controller Contra By: Kenneth J. Corcoran, Assistant Accounting Manage Costa DATE: May 7, 1985 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 $10,991 .01 . 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 450 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 - $609.90 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 Originating Department - $6,448.95 These are accounts where the County department which originated the billing has determined that the account should be written off. The reasons for these write-off recommendations generally fall into two categories. The first involves cases where the billing statements are returned undeliverable by the post office and efforts to identify the current location of the"debtor are unsuccessful . The second involves private individuals/groups enrolled in the County Health Plan (HMO) who are delinquent in making their premium payments. After verifying that no medical services have been rendered, the individual/group is disenrolled from the HMO and the account is recommended for write-off. CONTINUED ON ATTACHMENT: X YES SIGNATURE: _ RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATIO .OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S) ACTION OF BOARD ON =37 , APPROVED AS RECOMMENDED _ OTHER Listings dated 11/.5/.84 , 12/5/84/ , 1/5/85 , 2/5/85 , 3/5/85 , 4/5/85. VOTE OF SUPERVISORS X UNANIMOUS (ABSENT . ) 1 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 SUPERVISORS ON THE DATE SHOWN. CC: County Administrator ATTESTED May 21 . 1985 Auditor-Controller PHIL BATCHELOR, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR M382/7-e3 DY ����`��. DEPUTY -2- TO: Board of Supervisors SUBJECT: Write-off of Delinquent General Accounts Receivable C. Bankruptcy - $122'.50 These are cases where an order from the bankruptcy court requires the County to write-off the account. D. Compromise Settlement - $1 ,117.23 These are cases where an amount less than the total billed amount. 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. E. Determined Uncollectible by the Collection Agency - $(192.59) The County's outside collection agency periodically returns accounts to the County as "uncollectible". In this particular case, an account for $192.59 was returned and written-off; subsequently, the debtor was located and now the account is being reinstated. F. Statute of Limitation - $2,839.74 r Small claims or Superior Court actions are initiated on 'many delinquent accounts. By law, the defendant must be served with a notice of the action within certain time limits. In these particular cases the Sheriff and/or Marshal was unable to serve the papers within the necessary time frames and the statute of limitation expired. G. Balance $10 or Less - $45.28 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. 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 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.