Purchase College - Business Office - Procedure Manual

Business Affairs

SECTION IV

INCOME FUND REIMBURSABLE BILLING AND COLLECTION

This section of the manual describes the College's billing and collection procedures for Income Fund Reimbursable (IFR) accounts. IFR accounts rely upon the revenues they generate to fund their operations. It is essential that projects collect all funds due them to prevent a revenue shortfall.

These IFR Billing and Collection procedures provide assurance that bills are controlled and that projects are credited with the proper amount of receivables and collections. If the account manager/project director believes it is necessary to use other means for billing or payment, the College Accountant should be consulted.

Contracting to Provide Goods or Services
Arrangements to provide more than $2,500 worth of goods or services to another individual or agency should be put in writing and approved by College officials. Memorandums of Understanding (MOU) will be issued when other State agencies are receiving the goods and services. Revenue contracts will be issued for agreements with individuals and other non-State organizations.

The agreement should identify the performance expectations of the parties and specify when and how the account is to be paid.

The proposed agreement, initialed by the account manager/ project director should be submitted to the College Controller for review and signature.

Purchasing will forward the agreement to the State Comptroller for review and approval, if necessary.

No goods or services should be provided by the College before the agreement is approved by the College Controller.

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Billing and Collection Controls
The following billing and collection controls provide for a minimal level of internal control that should be in place over College revenue-generating operations. Additional controls may be required by the College Controller and Accountant. No cash collection activity should be implemented without the review and approval of the College Controller.
1. Billings
  The following process should be followed when billing a client for goods or services:
  1. When a person or organization receives goods or services, and is going to pay for them at a future date, it is important that the receivable be recorded on the College's records. A College IFR invoice establishes the receivable and should be issued each time an individual or organization does not pay for the goods and services at the time of delivery.
  2. It is good business practice for account managers to issue IFR invoices and distribute copies as follows:
    Original - to Customer
    Copy - to retain for project records
    Copy - to College Accountant
  3. The invoice specifies that all payments must be sent directly to the Business Office by the client. This directive should not be changed by the project director without the prior approval of the College Accountant.
  The College Accountant's Office maintains the College's official IFR accounts receivable records and maintains open bills awaiting payment. Ensuring that all goods and services are accurately and promptly billed and that all invoices are properly paid or otherwise adjusted is the responsibility of the project director/account manager.
  
  Experience has shown that timely follow-up on outstanding invoices greatly enhances the collection process. Project directors are primarily responsible for collecting the amounts billed and for the necessary follow-up on outstanding invoices.
  
  When an invoice is not paid within a reasonable time, normally thirty to sixty days, the following actions should be taken by the project director/account manager.
  
  (1) Issue dunning letter(s) requesting immediate payment; retain copies of these letters; and; send a copy to the College Accountant.
  
  (2) No further service should be given to a client who has a past due invoice.
2. Charging Another IFR Account
  
  The expenditure transfer process is the appropriate means to charge another IFR account within the College. This process will transfer expenditures equaling the amount charged from the account providing the good or service to the account receiving the good or service. Transferring the expense from the servicing account automatically adjusts any related overhead charges.
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Project Collections
For certain programs, it is more practical to collect funds at the time of service rather than issue an invoice. In these cases, specific approval is granted by the College Accountant for the program to collect revenues directly.

Approval will usually be granted for the following types of activities:
1. Collection of fees and fines
2. Late receipts or event admissions
3. Vending operations
4. Conference fees
When collections are made at the time a good or service is provided, the following basic controls must be in place:
1. Cash, checks, or money orders are acceptable forms of payment.
  - All checks or money orders must be made payable to" P number.< account and program IFR the indicate College? Purchase>
2. A cash register receipt or press-numbered receipt should be issued for each transaction, regardless of the form of payment.
  - If a press numbered receipt system is used, a receipt should be completed for each payment received. The receipts, receipt numbers, and transaction sequences should be maintained and controlled by the project director. The receipt forms should be duplicate:
  - Original copy given to the client/customer
  - One copy retained by the project as a record of daily transactions.
  - New York State Laws require that receipts and/or cash register journals be retained for seven years.
3. Collections should be balanced daily to the total of the receipts issued. If possible, the reconciliation of collected funds should be done by someone other than the person responsible for collections.
4. All collections must be hand-carried immediately to the College Accountant.
5. If necessary a temporary small change fund may be authorized by the College Accountant for the program to make change.
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Deposit of Project Collections
1. All funds received should be safely stored until they are deposited with the Business Office. Funds should be stored in a safe or locked drawer and the area should be accessible by designated personnel only.
2. Collections should be deposited intact, that is to say in the form received, on a daily basis with the College Accountant. Deposits may be made less frequently during slow periods, but in no case less than once a week.
3. A signed listing of the items (checks and cash) included in the deposit should accompany the collections in a sealed envelope or other protective container when submitted to the College Accountant.
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Change Funds
Change funds are authorized for projects that need to collect cash and give change to clients. All change funds must be approved by the College Controller and become the responsibility of the IFR activity project director/account manager.
1. Change funds should not be used to purchase goods and services.
2. Once approved, the change fund should remain at a constant amount.
3. Change funds should be controlled at all times and, when not in use, stored in safe or locked drawer and in an area accessible by designated personnel only.
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Returned IFR Checks

At times, a check submitted by a person or organization is returned unpaid by the bank, due to insufficient funds. Repayments for returned IFR checks should be made by certified check, money order, or cash. If the repayment is made by personal check, it should be returned to the sender.

The following is the returned check process:

When an IFR check is returned as uncollectible, a new invoice must be issued to the customer for the amount of the original invoice balance plus a bad check fee of $20. The invoice is distributed in the same manner that the project director distributed the original invoice.

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Adjustments to Billed Amounts
Once an invoice has been issued, the person or organization becomes liable to New York State for that accounts receivable. The College has the responsibility to ensure the invoice is collected on time. At times, however, it is necessary to adjust an outstanding invoice. Such an adjustment can only be made through close communication between the IFR project manager and the College Accountant.

Adjustments to invoices will only be allowed when related to the situation at the time the original invoice was issued. Adjustments should not be used to reduce invoices, to address collection issues, or to offset amounts the project may owe to the person or organization.

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Reconciliation

Each IFR account manager receives the same basic monthly report package sent to State Purpose accounts' managers. Special reports regarding revenue transactions are also available to IFR account managers to aid them in administering their account(s). Account activity can also be monitored through system inquiry (see Section VII). Project records should match the official records of the College.

Any discrepancies should be resolved with the College Accountant.
Other Procedures
1. All revenues and expenditures should be processed through campus approved accounts. Separate bank accounts cannot be maintained.
2. Unauthorized petty cash accounts/funds should not be established by the project for any reason. All expenditures must be made from approved accounts.
3. Unannounced reviews of an IFR account's operation may be done at the discretion of College administration.
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