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F -24 <br />POLICY FOR COLLECTIONS AND WRITE -OFF OF ACCOUNTS RECEIVABLE <br />Guided by the policy provided herein, the Administrative Services Director shall <br />establish specific procedures and dollar thresholds regarding collections and the write - <br />off of accounts receivable to the City. From an accounting perspective, aging accounts <br />receivable should generally be written off during the fiscal year in which the account is <br />no longer expected to be collectable. However, the decision regarding actual collection <br />efforts is separate. (Subsequent collection of an account previously written -off is treated <br />as new revenue.) <br />The Administrative Services Director or his designee shall establish and maintain <br />consistent working guidelines for the point at which collection efforts will no longer be <br />feasible or cost effective. Notwithstanding these guidelines, exceptions will sometimes <br />be appropriate on case -by -case basis. Each type of account and each account may have <br />specific legal or administrative nuances that may reasonably impact expectation of <br />collection. <br />The following guidelines should be applied in regarding aging accounts receivable: <br />Aging accounts receivables should be reviewed monthly to encourage timely <br />payment. Dunning notices should be mailed and penalties should be imposed <br />where appropriate. <br />The estimated cost of collection should not exceed the value of the delinquent <br />account. Delinquent accounts over the current deemed minimum account balance <br />threshold ($25.00 in 2004) and 90 days past due should be promptly sent for <br />collection. The reasonable cost of any contract collection efforts should be added <br />to the delinquent balance but the collection fee should not be recognized as <br />revenue until the amount is received. <br />Sometimes it may not be readily evident and /or practical to determine the precise <br />time a receivable becomes uncollectible on an individual account basis. On an <br />interim basis, the Revenue Division may elect to estimate and maintain an <br />allowance for uncollectible accounts as a contra asset account as a best estimate of <br />the value of uncollectible accounts that still remain on the City's balance sheets. <br />Receivables in general, should be substantiated by documentation evidencing the <br />amount and validity of the receivable. However, further written evidence should <br />be maintained by the Revenue Division to substantiate the probable collection for <br />any account deemed collectible over three years old. <br />1