The University of Texas at Dallas

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1.0 PURPOSE

This document covers the key policies and procedures governing the recording, collection, analysis and reporting of student accounts receivable.

2.0 SCOPE

The procedure encompasses and is applicable to student accounts receivable managed by the Financial Services division. The following internal controls have been incorporated into and form the basis for this procedure:

1. The maintenance of the receivable accounts and related subsidiary ledgers should be separated, wherever practicable, from the functions of (1) establishing the charges to the receivables accounts, (2) recording cash receipts and preparing the deposits, and (3) approval of any adjustments or write-off to any receivable accounts.
2. When necessary, subsidiary ledgers should be established. A trial balance of the subsidiary ledgers should be taken periodically, but not less than quarterly and reconciled with the related control accounts in the Financial Records System (FRS). Differences should be investigated and adjusted promptly.
3. All charges, collections, and adjustments to the accounts should be recorded promptly and in particular at the end of the fiscal period.
4. Billings to students and others should be issued in a timely manner.
5. Billing and collection transactions should be reviewed periodically to ensure compliance with established procedures.
6. Past due accounts should be reviewed each semester and follow-up collection efforts made.
7. A reserve for doubtful accounts should be established to reflect the net collectible valuation of the related receivable account. Review procedures should be established to provide a realistic reserve based on past collection experience and anticipated losses on the receivables.
8. Requirements for approval of write-off of accounts determined to be bad debts and adjustments for disputed amounts or other items should be established.
9. The size of the account may influence the effort put into collection attempts. The expenditure of time, effort, and money to collect large amounts is appropriate; however, the same effort expended on very small (under $50.00) accounts is wasteful.

3.0 STUDENT RELATED ACCOUNTS RECEIVALBE

Student accounts receivable are created by assessments for tuition/ fees, short term and long term loans and other miscellaneous student charges. The receivables are categorized as follows:

1. Student fees receivable
2. Third party receivable
3. Tuition and Fees (5%) loans
4. Emergency (10%) loans
5. Special purpose (0%) loans
6. Perkins loans
7. Returned Checks
8. Miscellaneous (i.e. traffic tickets for students and employees, lab equipment breakage, etc.)

4.0 BILLING AND COLLECTION PROCEDURE

1. The following steps are followed in collecting student accounts receivable:
   1. Student tuition and fees invoices are mailed to students at least ten days prior to payment due date.
   2. Students who have unpaid tuition and fees amounts are notified via e-mail. If email address is unknown or incorrect, an attempt is made to contact the students by phone.
   3. If payments have not been received by census day, students with unpaid tuition and fees amounts are dropped from registered classes.
2. Third party receivables invoices are mailed after census day. If not paid within 45 days, a second notice is mailed or telephone contact is made. A third party agreement will not be honored for a student if the company is delinquent for two semesters. Perkins loans are sent to a billing agency for monthly billing and collections when promissory note is signed. After loan is 60 days past due, three letters are sent to student from UT Dallas Perkins billing agency. After 90 days, additional letters (one certified) and a telephone call are sent from UT Dallas Perkins loan administrator. If no response, loan is sent to collection agency.
3. Tuition and Fees loans, Special Purpose loans and Emergency loan accounts receivable statements are mailed and emails are sent to students 30 days prior to the due date for the fall and spring semesters. A past due notice will be mailed and an email sent to the student 30 days after due date. Student accounts will be sent to a collection agency after the start of the next regular semester. Delinquent accounts ($51 and above), upon which the division is unsuccessful in collecting through the above procedure are referred to a collection agency.
4. Upon placement of delinquent accounts, the collection agency will report the debtor to the credit bureaus. The collection agency will retain the placement for one year before returning the account to UT Dallas as uncollectible.
5. UT Dallas will make the decision to either place the delinquent account with another agency, or forward the account to the Office of General Counsel, of the University of Texas System for legal action.
6. Upon placement of delinquent accounts, the collection agency will report the debtor to the credit bureaus. The collection agency will retain the placement for one year before returning the account to UT Dallas as uncollectible.
7. UT Dallas will make the decision to either place the delinquent account with another agency, or forward the account to the Office of General Counsel, of the University of Texas System for legal action.
8. After one year of unsuccessful collection efforts by the Office of General Counsel, the delinquent accounts are considered uncollectible and are written off.

5.0 ACCOUNTS RECEIVABLE WRITE OFF PROCEDURES

Accounts that are uncollectible are written off on a quarterly basis in accordance with the following procedure:

1. Accounts up to $100 may be written off by the DIVISION if all collection efforts were completed up to the time the accounts would have been referred to a collection agency. Requests for write off should include name, amount, and semester term.
2. Accounts where it has been determined that the student is deceased will be written off regardless of the amount. Request for write off should include name, amount and semester term and proof of death. After reviewing the request, the Bursar Office Director will approve the write off.
3. Delinquent accounts of $101 and above will require the approval of the Associate Vice President for Finance. Requests for write off should include name, amount, semester term, and statement why account should be written off.
4. Accounts may be adjusted for charges made in error without regard to the above provisions.
5. The withholding of official transcripts will continue to apply to students whose accounts receivable have been written off that were over $100.00.

6.0 ALLOWANCES FOR DOUBTFUL ACCOUNTS

An allowance for doubtful accounts is an account established to record a subtraction for Accounts Receivable balance, to allow for those accounts that will not be paid. The reserves are established when there is a basis to doubt the full collection of accounts receivable amounts. The adequacy of the reserves is evaluated each year as part of year-end closing activities. The estimate for the reserve may be based upon the following information gathered for that purpose:

1. The estimate for the student account receivable allowance is determined by using the June month end revenue report (FBM095) and taking 1.5% of the total revenues that flowed through the Student Information System. This estimate is than compared to the Aging Report (SRBBTRM1-9) of accounts that are less than one year to check reasonableness.
2. The estimate for the loan receivable allowance is determined by taking 15% of the student account receivable allowance. This estimate is than compared to the loan aging report by taking 3% of total dollar amount of loans given out that current year to check the reasonableness of the estimate.
3. The estimate for the Perkins receivable allowance is determined by using the principal amount outstanding in default greater than 5 years. This figure came from the campus partners report titled: NDSL Fiscal Operation Analysis.

7.0 ACCOUNTS RECEIVABLE AGING AND RECONCILIATION TO GENERAL LEDGER

The following Financial Records System (FRS) general ledger sub-codes are used to record student accounts receivable transactions:

The reconciliation of the detail student accounts receivable records to the corresponding accounts receivable amounts in the general ledger is performed on a monthly basis. The reconciliation document includes aged and subtotaled details of all student receivables as compared to the general ledger sub-code totals as of the end of the particular month. Any differences are identified, analyzed, explained and corrected as applicable. The document is signed and dated by the preparer and approved by the Director. The completed documents are presented to the Associate Vice President for Finance & Controller at a quarterly accounts receivable review meeting.