Section 4 - Receivables

Summary of Receivables

A receivable is defined as an amount of money due. In addition to regular billings, receivables include such items as overpayments to vendors, clients, or employees; over-reimbursements on contracts, results of audit findings that reflect amounts to be returned and similar items.

All receivables must be promptly billed. Any decision not to bill valid obligations or any decision to cancel valid existing obligations needs the approval of the appropriate authority such as the Bureau Director or Division Administrator. Receivables are to be recorded on the fiscal system monthly and reconciled monthly to the subsidiary records .

Adequate separation of duties must be maintained over receivables records, including a division of responsibility between the person who maintains receivables records, the person(s) who receive and deposit cash, and the person who reconciles the receivables records.

It is the responsibility of each organization to establish, within the Department of Health Services (DHS) policies and procedures, the terms and/or conditions for payment at the time an account is created and to monitor accounts receivable regularly. If payment is not received within 30 days, collection efforts must be made, including referral to a collection agency, if needed. The collection effort should be proportional to the amount of money due. Any amount over $1000 requires a concerted and thorough collection process. RECEIVABLES 2.0 detail debt collection policies for DHS . RECEIVABLES 2.2 provide collection procedures for grants receivables.

Each organization shall review accounts receivable at the end of every quarter. Annual Receivables reports are prepared by BFS.  Information required is contained in RECEIVABLES 5.0. This information is compiled and sent to the Department of Administration (DOA) by BFS.  Procedures for the annual report of receivables and reconciliation are detailed in RECEIVABLES 5.0.

Write-offs of uncollectible accounts must be approved by an independent person, preferably the Institution Business Director or division management . All write-offs must be documented as to collection efforts. All write-offs between $100 and $1,000 require BFS approval. All write-offs greater than $1,000 require DOA approval. Policies for the write-off of receivables are described in RECEIVABLES 2.0.

When an employee is overpaid by the State, it is the responsibility of the payroll person of the organization to immediately notify BFS and BHR of the overpayment. See PAYROLL 12.0 for these important procedures.

Last Revised: May 15, 2017