Policies & Procedures


Section 1

Business and Financial Affairs

Financial Services

Sec. 704-17: Write Off and Allowance Procedures for Uncollectible Accounts

Responsible Office: Financial Services
Issued: February 2022

References / Resources

Contact: Campus Billing and Collections at CBS@uci.edu

A. Purpose and Scope

A receivable account is deemed uncollectible when it remains unpaid after the University has taken all adequate and reasonable efforts to collect an amount due.

B. Procedures

  1. Allowance for Uncollectible Accounts
    1. The University uses an allowance for uncollectible accounts to reduce outstanding accounts receivable to estimated realizable value.
    2. An allowance account is established to reserve for bad debts either at the department level or at the University-wide level.
    3. This account(s) must be reviewed by the originating department annually to ensure adequate funding prior to year-end.
  2. All Receivables
    1. All receivable accounts must be reviewed by the originating department at least annually for collectivity and potential write-off.
    2. At the discretion of Campus Billing and Collections, written-off accounts over $10 will be assigned to an outside collection agency for collection when efforts by campus collectors have proven unsuccessful.
    3. Whenever an invoice is written off as uncollectible, a record of the debt and of the administrative action will be maintained per the UC Records Retention schedule.
    4. The University’s collections efforts are considered to be completed once accounts are turned over to a collection agency.
    5. Collection agencies should not retain accounts more than twelve months unless there is evidence that collection is imminent.
    6. Accounts that have been written off will no longer be eligible to conduct business with the University until the full principal debt and all related collection fees are paid.
  3. Non-Student Receivables
    1. Aging reports are prepared mid-year and end of the year to review accounts for potential write off.
    2. Write off will occur no less than annually and recorded as of June 30 for purposes of year-end reporting.
    3. Unpaid invoices between 180 days and one year past due must be reviewed by both the initiating department and Financial Services for write-off. Any write-offs will be charged back to the invoicing department’s revenue account initially credited when the charges were created.
    4. An email will be sent to the department 30 days before the write off is processed. The notification will include an attachment of the list of accounts targeted for write off. The department must review the list for potential resolution with the vendor or institution.
  4. Student Receivables
    1. Student Accounts are reviewed for write-off by term. The following criteria are considered when writing off a student account:
      1. Accounts have been inactive for 4 terms inclusive of the Summer term.
      2. Account does not have a credit balance
      3. Student is not on a leave of absence
      4. Account does not have Housing charges that have an unresolved status of:
        1. Disputed
        2. Deferred
        3. Suspended
        4. Evicted
        5. Evicting
  5. Approval for Write-Off
    1. In order to obtain approval for write-off, originating departments must submit requests to the Director, Financial Services which include supporting documentation to justify write-off of each item and the funding source of cover the write-off.
    2. The Director, Financial Services will review the information submitted, and if complete, will include those write-offs in the narrative that summarizes all write-off activity for review by the Controller, and approval by the Chief Financial Officer and Vice Chancellor, Division of Finance and Administration.
    3. Collections for balances $10.00 and under will not be actively pursued as collectible items but will be adjusted off to a de minimis account during individual account reconciliations. Credit balances will be similarly adjusted.
  6. The Interagency Intercept Collections Program
    1. After collection attempts at the campus level have not been successful in paying the debt in full, in addition to assigning the debt to a collection agency, a series of three progressively stronger collection notices will be sent to the debtors.
    2. If the debt is still not paid in full, in addition to placing the debt with a collection agency, the account will be sent to the Franchise Tax Board as part of The Interagency Intercept Collections Program.
    3. Even if the statute of limitation on filing suit or referring debt to a collection agency has expired, the underlying debt can still be recovered by offset against tax refunds and California Lottery winnings owed the debtor by the state.
  7. Court Action
    1. UCI may elect to pursue legal action as allowable.
    2. Court action may be taken when administrative collection efforts have failed, and an account has been turned over to a collection agency. The collections agency must file any lawsuit in their own name and not the name of the Regents.
    3. Individual campuses are authorized to bring Small Claims Court action to collect amounts up to $5,000.
  8. Recovery of Bad Debt
    1. Amounts paid in full on written-off invoices will be credited to the department, less any applicable collection agency commissions or costs, and the indebtedness will be considered fully satisfied.