0200 Accounts Receivable

Agencies and institutions shall develop internal policies and procedures for delaying or withholding certain state services to persons who refuse to pay their debts. This policy shall not be interpreted to be in conflict with the policies of any State-supported hospital and shall not be the basis of denying necessary mental health or medical assistance or other similar services deemed necessary under Federal or State laws to any individual.

State agencies will develop and implement internal policies and procedures to charge, as directed and in the manner prescribed by State Statute, interest and a late penalty fee on past-due accounts receivable. Interest shall be charged at the rate established pursuant to G.S. 105-241.21 on a past due accounts receivable from the date it was due until it is paid. Agencies should contact the Department of Revenue, to obtain the rate currently being charged. A late payment penalty fee of no more than ten percent (10%) of the accounts receivable shall be charged on all past due accounts.

All accounts sent to the Office of the Attorney General will go through the enclosed procedure.

Collection techniques used by state agencies.

State agencies should obtain the enclosed minimum prescribed information on prospective debtors, wherever practical.

Techniques for collection of accounts receivable shall include use of credit reporting bureaus, judicial remedies authorized by law, and administrative setoff by a reduction of an individual’s tax refund pursuant to the Setoff Debt Collection Act, Chapter 105A of the General Statutes, or a reduction of another payment, other than payroll, due from the State to a person to reduce or eliminate an accounts receivable that the person owes the State.

Agencies and institutions should ensure that accounting and financial management systems are adequate to properly account for, record, and manage receivables, whether those systems are manual or automated.

State agencies must establish internal policies and procedures for the collection of accounts receivable consistent with statewide accounts receivable policies and procedures adopted by the State Controller and the statutory requirements.

Accounts should be written off an agency’s financial accounting records when all collection procedures, including those required by the Office of the Attorney General (OAG), have been conducted without results and management deems the accounts uncollectible. Accounts due from individuals or vendors must be submitted to the Department of Revenue for setoff debt proceedings at least once prior to write off. After write off, these accounts shall continue to be submitted to the Department of Revenue for debt setoff proceedings.

Management should establish an allowance for doubtful accounts to reflect the amount of an agency’s receivables that management estimates will be uncollectible. The establishment of an allowance account ensures that the agency’s receivables are not overstated for financial reporting purposes.