Loading...
HomeMy WebLinkAboutExhibit AExhibit A Accounts Receivable Write -Off Policy and Procedures for the City of Miami, Florida: PURPOSE: To provide for efficient financial administration, the purpose of this Policy is to set forth parameters for the management of the City to allow for the write-off of balances from certain defined types of customer accounts, whether with persons or entities, deemed uncollectible at a future date. It specifies the responsibilities over the administration of certain defined types of customer accounts receivable and the actions required to adjust those types of uncollectible accounts receivable. Further, it provides for enhanced collection efforts to ensure uniform, consistent efforts to recover receivables. GENERAL PROCEDURAL CONTROLS: Types of Accounts Receivable Subject to this Policy: Primary responsibility for final collection of the following defined types accounts receivable rests with the Finance Department: accounts payable to the City for permits of all types (collectively, "Customer Accounts"), fees owed to the City for uses of all types (collectively, "Fees"), debts owed to the City pursuant to contracts, agreements, licenses, and other legal documents which are determined by the City Attorney's Office not to be legally collectible (collectively, "Debts"), amounts owed to the City historically by entities which are no longer legally existing ("Inactive Entities"), and amounts owed to the City historically by person(s) who cannot be legally located after the passage of the applicable legal time period under the circumstances and diligent efforts by the City to locate ("Missing Person(s)) (hereinafter for purposes of this Policy, the "Accounts Receivable") subject to this Policy. Types of Accounts Receivable Not Subject to this Policy: The Finance Department does not have primary responsibility for the collection of accounts receivable (1) related to special assessment liens for Business Improvement Districts, and (2) for liens on properties in violation of development/loan covenants, unsafe structures violations, special assessments of all types, and (3) all types of violations under leases, revocable licenses, subleases, development agreements, tax-exempt or taxable bond related documents, bonds for construction, payments, and performance, or that result in any type of legal lien under the laws of the United States, State of Florida, Miami -Dade County, any regional authority or agency, and the City Code, all of which are usually forwarded by City departments to the City Attorney's Office for enforcement and collection that may first involve Court processes. Procedures for Timely Designation and Collection of Delinquent Debts: The Finance Department's responsibilities for the Accounts Receivable subject to this Policy includes the development and updating of departmental policies and procedures to ensure the timely collection of any past -due Customer Accounts, Debts, Fees, and amounts owed by Inactive Entities and Missing Person(s), and the ongoing analysis of the collectability of such eligible associated past due Customer Accounts, Debts, Fees, and amounts owed by Inactive Entities and Missing Person(s) to be designated "delinquent" to then become an Account(s) Receivable pursuant to this Policy. In general, an Account Receivable becomes "delinquent" when payment is past due and not received in accordance with conditions giving rise to the receivable being timely paid and all cure periods have passed without such required cure occurring. Thus, if payment is not received in an amount at least equal to that required or within the time specified for the account to be due and payable, such account is delinquent. Notwithstanding this generality, the Finance Department shall declare an account "past due" if not paid within thirty (30) days of the date that both of the following have occurred: (1) the due date has passed, (2) all cure period(s), if any are legally required, have passed, and (3) the City has provided written notice to the debtor that the foregoing have passed and that the City will now begin collection efforts. If payment is not received by the City within ninety (90) days of the date that both (1) the due date has passed, and (2) all cure period(s), if any are legally required have passed, then the account shall be considered "delinquent" and is forwarded by the Finance Department to an independent third -party collection agency properly procured by the City for collection of delinquent Accounts Receivable. In all cases, the exercise of due diligence in collecting an account requires prompt notification of (1) the account's "past due" and "delinquent" status changes and designations to the debtor, and (2) to the City's requests for payment from the debtor. Every effort shall be made to collect Accounts Receivable subject to this Policy prior to designating any Customer Account, Fee, Debt, or amounts owed by Inactive Entities or Missing Persons as "delinquent" and referring such delinquent Customer Account, Fee, Debt, or amount owed by an Inactive Entity or Missing Person to an independent third -party collection agency. Such accounts, after a year with the independent third -party collection agency without any recovery, will be evaluated for write off in consultation with the City Attorney's Office and any other relevant City Department(s). When an account is written -off, the accounts receivable account should be credited, and the Allowance for Uncollectible Accounts should be debited. All Accounts Receivable deemed uncollectible, no matter what the amount, shall be included in the annual report by the Finance Director to the City Commission. REGISTRY OF DELIQUENT ACCOUNTS Pursuant to the Authorizing Resolution for this Policy, the Finance Director shall create and maintain a Registry of Delinquent Accounts. All Accounts Receivable for City contractors, vendors, suppliers, providers, users, persons, and entities that exceed a total amount of twenty-five thousand dollars ($25,000.00) and have been delinquent for greater than one hundred and eighty (180) days shall be listed on the City's Registry of Delinquent Accounts. CONTINUING COLLECTIONS EFFORTS: The adjustments of Accounts Receivables of a Customer Account, Fee, Debt, and amount owed by an Inactive Entity or Missing Person from the City's accounting records does not preclude continuing collection efforts, to the extent deemed practicable and legally appropriate under the circumstances and considering the nature and value of services provided by the City. Absent a written authorized settlement as set forth in the settlement procedures above, the adjustment(s) of an uncollectible Account Receivable are not considered a total forgiveness of debt; customers for whom accounts have been declared uncollectible in the amount of more than twenty-five thousand dollars ($25,000.00) or as stipulated by contractual agreement shall not be considered for future business relationships with the City until full restitution has been made to the City or agreed to (1) in writing by the City's authorized representatives, (2) in a form acceptable to the City Attorney, and (3) the authorized representative(s) of the delinquent customer. Actions to the contrary shall be (a) fully documented by the relevant City Department director, (b) submitted to the Finance Director, the Chief Financial Officer, and the City Manager for review and concurrence, and (c) in a form acceptable to the City Attorney.