HomeMy WebLinkAboutDocumentation_Workshop_Tab 01_4/1/2024 Agenda Item #1.
Workshop
STAFF MEMO
Meeting: Workshop - Apr 01 2024
Staff Contact: Jeffery Snyder, Finance Director Department: Finance
ITOMM
Discussion on Accounts Receivable Policy for the Village of Tequesta
The Proposed Policy - Accounts Receivable, will formally establish our collection efforts for past due
accounts. Including the process of notification, the write-off request process, and the collections
efforts the Village staff will utilize for utility bills and emergency transport bills. All write-off requests
will come before the Village Council to approve. Accounts written off will be removed from our
financial reporting. The Village's collection efforts may, depending on amount and reasons for writing
off, continue take place even after they have been removed from our accounting records. This policy
also establishes the method of accounting for payments received after being written-off.
This document and any attachments may be reproduced upon request in an alternative format by
completing our Accessibility Feedback Form, sending an e-mail to the Village Clerk or calling 561-
768-0443.
BUDGET • - •
BUDGET AMOUNT N/A AMOUNT AVAILABLE N/A EXPENDITURE AMOUNT: N/A
FUNDING SOURCES: N/A IS THIS A PIGGYBACK:
❑ Yes ❑ N/A
DID YOU OBTAIN 3 QUOTES?
❑ Yes ❑ N/A
COMMENTS/EXPLANATION ON SELECTIONN/A
POTENTIAL MOTION - • e
Consider moving approval of the Accounts Receivable Policy as drafted. .
Proposed Accounts Receivable Policy 4-2024
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Agenda Item #1.
Village of Tequesta
Accounts Receivable Policy
Table of Contents
SECTION1. Purpose ....................................................................................................................................I
SECTION2. Definitions. ..............................................................................................................................1
SECTION3. Policy.......................................................................................................................................2
SECTION 4. General Description of the Village's Accounts Receivable.....................................................2
SECTION 5. Requirements for Detailed Records and Accounts Receivable...............................................2
SECTION 6. Responsibility for Receivable Records and Internal Controls.................................................2
SECTION 7. Legal Considerations ............................................................................................................3
SECTION 8. Collection Efforts..................................................................................................................3
SECTION 9. Request for Write-Off Authority.............................................................................................5
SECTION 10. Recording the Write-Off or Collection..................................................................................5
SECTION 1. Purpose
To establish uniform guidelines and principles for the internal control, collection and write-off of
accounts receivable administered by the Village. Policies contained herein are designed to comply
with applicable state laws, rules and regulations.
SECTION 2. Definitions.
Accounts Receivable: A record reflecting amounts due from applicants, vendors, contractors,
employees, customers, citizens, businesses, or other responsible parties for goods and services
furnished by the Village, including utilities and emergency transports.
Customer Service:The location designated by the Village for the collection of water utility payment.
Debt: An obligation to pay based upon the Village's services utilized or the product consumed.
Emergency Transport Fee:The cost charged by the Fire Department for transporting someone to the
hospital or related urgent care facility.
Finance and Accounting Policies: Procedures established to ensure proper controls, consistency and
accountability of funds collected for the Village.
Fiscal Year:The 12 month period from October I through September 30.
Internal Controls: Policies and procedures established to provide reasonable assurance that specific
objectives are achieved.
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Agenda Item #1.
Write-Off.• An accounting adjustment reflecting the portion of an accounts receivable determined
uncollectible.
SECTION 3. Policy.
This policy establishes procedures to standardize the collection of past due balances due and owing
to the Village. When an account is known to be delinquent, the appropriate department will make a
diligent effort to collect the account in compliance with these procedures. If such efforts fail to
achieve collection, the customer service division will promptly lien the property (if greater than
$750), send to collections, or refer the account to the Village attorney (if greater than $10,000) for
evaluation and further action (s) to protect the financial interest of the Village.
SECTION 4. General Description of the Village's Accounts Receivable
The Village has two different accounts receivable systems. Water is billed after consumption by the
Utilities Department. The Fire Department bill customers for emergency medical service transports
(ambulance fees). The Building Department also collects funds but payment is required to issue
building permits.
SECTION 5. Requirements for Detailed Records and Accounts Receivable
The departments must maintain a record detailing the amount due from customers, contractors,
renters, employees or other responsible parties. Because of the number of accounts involved, it is
important that procedures be implemented that maintain accounts efficiently and accurately.
Although the form forthe detail accounts will vary by type ofobligation,the following data is desirable
and should be obtained whenever possible:
a. Responsible Party's Name
b. Billing Address
c. Driver's License Number, Social Security Number, or Federal Employer Identification
Number (if available)
d. Type of receivable
e. Date of Transaction
f. Explanation of Transaction
g. Amount Due
(1) Amount Assessed
(2) Adjustment Amounts
(3) Paid Amounts
(4) Write-Off Amounts
(5) Balance Due
All billing adjustments (late fees, penalties, turn-on/turn-off fees, billing errors, etc.) will be authorized
by the appropriate supervisors.
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Agenda Item #1.
SECTION 6. Responsibility for Receivable Records and Internal Controls
The Finance Department is responsible for establishing, maintaining, and monitoring an internal control
systems over the accounts receivable functions. This will include adequate segregation of duties, cash
handling procedures, restrictive endorsements, accounts receivable aging report analysis, proper
documentation for account adjustments, etc.
SECTION 7. Legal Considerations
a. Delinquent Accounts: An account receivable becomes delinquent when payment is not
received in accordance with conditions giving rise to the receivable. Thus, if payment is not
made in an amount at least equal to that required or within the time specified for the account,
such account is delinquent. The Village, however, declares an account "past due" if not paid
within 30 days of the due date. If not paid within 90 days following its due date, the account is
considered "delinquent". In all cases, the exercise of due diligence in collecting an account
requires prompt notification of the account's overdue status to the customer and request for
payment.
b. Statute of Limitations: Because of changes in applicable statutes and the complexity of
applying the statutes to specific cases, the finance department will not attempt to settle or
write-off any account receivable without specific authorization from Village Council or as may be
specifically authorized by a law or rule relating to the debt giving rise to the receivable.
c. Write-Off Authority: Except as otherwise provided by the Village Charter, the authority to
adjust and settle accounts or debts owed to the Village rests with the Village Council.
Corrections that reduce a fee by the reason of error in the assessment or recording must
not be regarded as a compromise, write-off, or default. However, any such adjustment to
the accounts must be supported by documents explaining the reason for the adjustment,
signed by the appropriate supervisor, department director and/or the Village Manager,
based upon amounts.
SECTION 8. Collection Efforts
Responsibility for collecting accounts receivable rests with the Fire Department and the Utilities
Department.
Before declaring an account uncollectible, diligent effort must be made to collect the amount
outstanding.The collection effort may be shared bythe Utility Department, Fire Department, Finance
Department, and the Village Attorney, but must include at least the following:
a. If the utilities payment is not received within 30 days after its due date, the department will
notify the debtor in writing of the amount that is past due. The account shall have the
appropriate penalties applied, if any. Past due payments will result in the Village
locking/removing the water meter until an extended payment agreement is negotiated or
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Agenda Item #1.
prompt payment is made for the entire balance due, including penalties.
b. The Utilities Department and the Fire Department may negotiate an extended payment
agreement for the past due payment with the responsible party for a period not to exceed
six months. If this is done it is the department's responsibility to keep track of payments
and a running balance of the amount due. The Utilities Director or the Fire Chief shall
approve extended payment agreements that exceed six months.
c. If payment is not received, or an extended payment agreement is not reached within 60
days from the due date on the receivable the Utilities Department or the Fire Department
will notify the responsible party in writing that the account is overdue. The bill will include
a statement that if payment is not received or an extended payment agreement is not
executed within two weeks of notification,the account may be referred to legal counsel or
to a collection agency for further action.
d. If an adequate resolution of the past due account is not reached within 90 days of the due
date, the finance department, the Utilities Department, and/or the Fire Department may
refer the account to the collection agency, the Village attorney, or retain the account for
further collection efforts. Before referring the account, the appropriate department will
assemble available documents to assist the collection agency or Village attorney in
determining an appropriate action. Such documents should include relevant documentation
of the debt and efforts made to collect or contact the debtor. Accounts of $10,000 or less
will either be referred directly to the collection agency or retained for further collection
efforts.
e. When the Utilities Department delinquent account becomes 180 days past the due date an
accounting entry to bad debt and the allowance for uncollectible will be made.
f. Annually by October 30, the finance department shall prepare, in writing, all pending
collection items that have not been referred to the collection agency; including those accounts
which havebeen retained and those referred totheVillage attorneyforenforcement which are in
excess of 180 days past due. These reports shall include the date the item was due, the name
of the account holder (unless prohibited by HIPAA or other applicable rule), and the amount
of the past due balance.
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Agenda Item #1.
SECTION 9. Request for Write-Off Authority
After all the above procedures have been completed and the account is determined to be uncollectible, a
list of the receivables will be prepared, except as otherwise prohibited by statute, the Village Council will
be asked to authorize the write-off of the amounts due and owing in a public meeting.
SECTION 10. Recording the Write-Off or Collection
Upon Village Council's authorization, the write-off in the accounting system will be made by reducing
accounts receivable and making the appropriate adjustment to the allowance account for utilities, for
emergency transports we will adjust the accounts receivable program.
If the amount due is collected through the Village's collection agency, the receiving department/division
will account for the payment in the appropriate fund. The account will be reestablished by a debit to
accounts receivable and a credit to the allowance account. The payment will be recorded as a credit
to accounts receivable and a debit to cash or a credit to the appropriate revenue account and debit
to cash.
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