006.09.1 R4-19-4-2004. Accounts and Notes Receivable
AR ADC 006.09.1 R4-19-4-2004Arkansas Administrative Code
Ark. Admin. Code 006.09.1 R4-19-4-2004
006.09.1 R4-19-4-2004. Accounts and Notes Receivable
State agencies must promptly record amounts due for delivery of goods and services, licenses, unpaid taxes, student loans, special assessments, accounts receivable, notes receivable and capital leases receivable.
Collection procedures shall be developed and followed to ensure that all receivables are collected promptly in a cost effective manner. Written procedures shall be filed with the Department of Finance and Administration-Office of Accounting (DFA-OA) within 90 days from the effective date of this regulation.
Agencies shall diligently and actively pursue the collection of receivables. Diligently and actively pursuing the collection of these accounts may include but is not limited to:
2. Referring an account to a licensed collection agency or an attorney for collection with a remuneration not exceeding fifty percent (50%) for accounts of five hundred dollars ($500) or less and not exceeding thirty-three and one-third percent (33 ⅓ %) for accounts in excess of five hundred dollars ($500). If an agency is unable to procure the services of a collection agency or attorney for the collection of any account in excess of five hundred dollars ($500) for a fee of one-third ( ⅓ ) of the amount recovered as authorized in this subsection, the agency may report this fact to the Legislative Joint Auditing Committee, and the Committee may authorize the agency to pay a higher fee for collecting the account, not to exceed fifty percent (50%); or
Agencies are to document all efforts made toward the collection of receivables. Agencies are to prepare aging reports at least monthly. Aging reports are required to be reviewed by management, and such review documented on the report as to the action taken. Accounts receivable records may contain personal information about citizens. Safeguarding and disposition of personal information must be consistent with federal and State laws/regulations applicable to the information.
Allowance for Doubtful Accounts
Generally Accepted Accounting Principles (GAAP) require that a determination be made between receivables deemed to be collectable and those considered not economically collectable, including those not collectable at all. Agencies are to develop and follow written criteria for the determination of those not collectable. These written procedures shall be filed with the DFA-OA within 90 days from the effective date of this regulation. Estimates of total e receivables not collectable are to be made at fiscal year end, and adjusting entries are to be recorded in the agency's accounting records to the allowance for receivables not collected.
Abatement Procedures
The procedures that must be followed by State agencies, departments, boards, commissions and institutions to “charge off” moneys owed to them are prescribed in ACA§ 19-2-301 through 19-2-307. The provisions contained in the law must be complied with before any accounts or notes receivable may be abated. If, after the State agency has pursued collection of the debt owed it as set out above and such debt or partial debt is decreed unable to be collected, then the debt shall be referred to the Chief Fiscal Officer of the State for abatement. Before any debt will be considered for abatement, the State agency shall certify in writing that the above procedures have been complied with and submit detailed support of collection attempts. A statement must be included justifying why any of the above methods was not used, and the agency shall provide a copy of the letter from the attorney or collection agency stating they were unable to collect the bad debt, if applicable.
The Chief Fiscal Officer of the State shall verify that all efforts to collect the indebtedness have been fulfilled. He/she may then, by written approval, declare the debt or remaining debt unable to be collected and notify the State agency and Legislative Joint Auditing Committee of abatement of the debt.
Refer to Appendix P2-19-4-2004, for transaction instructions.
PLEASE NOTE: Refer and adhere to the provisions of ACA§ 19-2-301 et seq. in applying the above regulation.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.09.1 R4-19-4-2004, AR ADC 006.09.1 R4-19-4-2004
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