Internal Governing Policies


 

#127 - Collection of Delinquent Accounts, Internal Offset Procedures


Approved: October 18, 1989

Nomenclature changes: July 16, 1997

Monitor: Vice President for Business Affairs


Various units within the University have the responsibility for billing and for initial collection efforts of amounts due the University from students, employees, and non-employees.

If all reasonable efforts to collect or resolve the amounts due fail, such amounts shall be considered delinquent and the debtor shall be subject to specific collection procedures, including deduction from salary or any other amounts owed to the debtor by the University or the State of Illinois.

Amounts determined to be delinquent by the billing department shall be referred to the University Business Office for collection, along with a record of collection efforts already undertaken. 

Procedure

  1. Notification

    The Business Office shall notify each debtor, by letter, of delinquent amounts and advise the debtor that one of the following actions must be taken within the date specified (ordinarily five working days):

    a. Pay the amount due;

    b. Make satisfactory arrangements for payment;

    c. If the amount is disputed:

       1. contact the billing department to resolve the dispute and provide the Business
       Office with a signed statement from the billing department concerning the resolution;
       or

       2. file a written appeal with the Business Office, if the amount in dispute cannot be
       resolved with the billing department.
  2. Collection Process

    If none of the above actions have been accomplished within the specified time, a second letter shall be sent to the debtor advising that certain specified collection efforts are being initiated which may include: (1) deduction from any funds (including salary) due the debtor by the University or the State of Illinois, (2) referral to a collection agency, (3) litigation, or (4) other appropriate action.
  3. Appeal Process

    If a written appeal is filed by the debtor, the specified collection efforts shall be deferred.

    Within ten working days after receipt of the appeal, the Business Office shall schedule a hearing with the debtor (and/or a representative or counsel) a representative of the billing department, and the Vice President for Business Affairs, or designee.  Within two working days of the conclusion of the hearing, the Vice President for Business Affairs, or designee, shall render a written decision.

    Based upon the decision, either a credit shall be issued or the debtor shall be required to make full payment no later than three working days following the issuance of the decision.  Failure to make payment shall result in resumption of the specified collection efforts outlined earlier.
  4. Deduction of Amounts Due

    If the University or the State deducts the amount owed, a written statement of the reason for the deduction shall be provided to the debtor.  All deductions or other collection procedures shall be in accordance with applicable State laws and rules.
  5. Overlapping Payments and Deductions

    Payments by employee-debtors which are made after a deduction has been submitted to the Payroll Office shall not stop the deduction process.  Payments by debtors which are made after a deduction has been processed against University checks or submitted to the State of Illinois may not stop the deduction process.  (See Refund below.)
  6. Refund

    A refund shall be initiated by the Business Office when a credit on an account is created by the application of the deduction in conjunction with the debtor making restitution for indebtedness.
  7. Reconciliation

    a. Payroll Deductions

    The Payroll Office shall forward a copy of the appropriate deduction register to the Business Office. The Business Office shall process the amount deducted as a credit to the debtor's account upon receipt of payment through the offset procedure and shall notify the original billing department of payments received.

    b. University Checks (Non-payroll)

    The Business Office shall deduct delinquent amounts from payments to debtors through University checks and shall process such amounts in the same manner as payroll deductions outlined above.

    c. State Warrants

    The Business Office shall maintain a listing of all accounts submitted to the State Comptroller's Office for deduction. Amounts deducted from State warrants shall be processed by the Business Office in the same manner as payroll deductions as outlined above. The Business Office shall acknowledge immediately the receipt of direct payment from a debtor whose account has been forwarded to the State for collection and shall notify the State Comptroller's Office to cancel the deduction process.
  8. Non-Federally Funded Student Delinquent Loans

    These procedures shall be followed in the handling of delinquent student loans in which non-federal funds are involved:

    1. The University may annually "write off" delinquent notes of borrowers whose addresses cannot be located when the amount owed is less than $1,000.

    2. A record of accounts "written off" shall be maintained in the Accounting Office and classified as "unclear" in the Office of the Vice President for Student Affairs in order to effect recovery if the borrower has any direct or indirect contact with the University.

    3. The Vice President for Business Affairs, Treasurer, and Chief Accountant are authorized to negotiate a settlement for old accounts. If the settlement involves a reduction of the debt by $1,000 or more, the account shall be referred to the Attorney General for certification as uncollectible in accordance with the Rules of the State Comptroller.

    The Director of Financial Aid shall be notified of any negotiated settlement.