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File code: ADM.OFFSET.POL
Approval Date: 08/10/95
Approved By: President's Staff

Policy on Internal Offset

General Policy:

Various units within the Business Office have the responsibility for collecting amounts due the University from students, employees, non-employees and vendors. If all reasonable efforts to collect or resolve the amounts due fail, employees may be subject to deduction from their payroll check or other payments, non-employees/vendors may be subject to deductions from amounts owed them by the University or the State of Illinois, and students may be restricted from obtaining transcripts and from registering for future terms.

Guidelines:

  1. Billings:
    On a monthly basis (or less frequently depending upon amount), various units within the Business Office will bill those parties who have amounts due the University.
  2. Collection Policies -- Employees:
    1. Receivable Systems:
      1. Delinquent Accounts:
        Employees are billed monthly and are expected to make payment upon receipt of the bill. In the event charges are disputed, they should be promptly resolved with the charging unit which will be identified on the billing. An account is generally considered to be delinquent if unpaid by the specified due date after issuance of the bill. The employee will receive two billings prior to further collection procedures noted below.
      2. Collection Process:
        If payment is not received by the due date of the second billing, deduction from the employee's paycheck may be initiated by sending a letter notifying the employee that he/she has until a specified date (ordinarily five working days) to take one of the following actions:
        1. Pay the charge.
        2. Make satisfactory payment arrangements with the Business Office.
        3. If the charge is disputed, contact the charging department(s) to arrange for a credit and provide the Business Office with an approved credit memo.
        4. File a written appeal with the Business Office if the charge is in dispute and cannot be reconciled with the charging department.

          The letter of notification to the employee will also indicate that unless one of these actions is finalized by the stipulated date, an automatic deduction will take place from any funds due the employee, including payroll, and charging privileges will be suspended for a year
      3. Appeal Process:
        If an appeal is filed, the deduction will be deferred. The unit responsible for collection will schedule a hearing with the individual employee (and/or his/her representative or counsel), the charging department, and the Vice President for Administrative Services after receipt of the appeal. At the conclusion of the hearing, the Vice President for Administrative Services will render a written decision promptly and either a credit will be issued, or the employee must make full payment no later than three working days following the issuance of the written decision. Failure to make payment will result in deduction, to the extent permitted by law, from any payment to the employee until full payment has been received.
      4. Deduction of Amount Due:
        If the University or the state deducts the amount owed, a written statement of the reason for the deduction will be provided to the employee. All deduction procedures will be in accordance with applicable state laws and rules.
    2. Returned Checks:
      1. Collection Process:
        All faculty and staff whose personal checks are returned unpaid by the bank will be notified by mail and/or telephone to immediately replace the check and pay the applicable service charge. A letter will be sent notifying the employee that he/she has until a specified date (ordinarily ten working days) to pay or make satisfactory arrangements to pay the amount due, or provide documentation indicating a bank error to the Business Office. The letter will also indicate that unless one of these actions is finalized by the specified date, an automatic deduction will take place from any payments due the employee. Future check cashing privileges may be restricted.
      2. Deduction of Amount Due:
        If the University or the state deducts the amount owed, a written statement of the reason for the deduction will be provided to the employee. All deduction procedures will be in accordance with applicable state laws and rules.
  3. Collection Policies -- Non-Employees/Non-Students:
    1. Receivable Systems:
      1. Delinquent Accounts:
        Non-employees are billed monthly and are expected to make payment upon receipt of the bill. Accounts are generally considered delinquent if unpaid by the specified due date of the bill.
      2. Collection Process:
        When an account becomes delinquent, additional collection procedures will begin which may include one or more of the following actions:
        1. Special warning messages on the monthly statements.
        2. Special collection letters sent separately and in addition to the regular monthly statements.
        3. Referral of delinquent debtors to a credit bureau.
        4. Reported to Comptroller's Offset System.
        5. Placement with a collection agency.
      3. Deduction of Amount Due:
        If payment is not received after collection methods in 3.A.(2) have been exhausted, the debtor will be notified by letter that the account will be reported to the State of Illinois Comptroller's Office for deduction from any amounts due to the debtor from any agency of the State of Illinois (Ill. Rev. Stat. 1985, ch. 15, par. 210.05), unless a written request for a hearing is received by the Business Office within thirty days from the date of the letter.
      4. Appeal Process:
        If an appeal is filed, deduction will be deferred pending a hearing. The Business Office will schedule a hearing with the debtor (and/or his/her representative or counsel), and the Vice President for Administrative Services after receipt of the appeal. The Vice President for Administrative Services will render a decision at the conclusion of the hearing. All deduction procedures will be in accordance with applicable state laws and rules.
    2. Returned Checks:
      1. Collection Process:
        All non-employees whose checks are returned unpaid by their bank will be notified by mail and/or telephone to immediately replace the check and pay the applicable service charge.
      2. Deduction of Amounts Due:
        If within ten calendar days after the original notification (B.(1) above), payment has not occurred, collection procedures defined in 3.A.(2)(3) will be implemented.
  4. Students:
    1. Receivable System:
      All approved charges for students will be coordinated and processed through the centralized accounts receivable system maintained by the Billing and Receivables Office. Students of Western Illinois University who are in good financial standing are allowed to defer paying current charges until the close of the term or until such time the student attempts to advance register for future terms. Student transcripts will not be released until such time all outstanding debts are paid or arrangements have been made with the Business Office.
      1. Delinquent Accounts:
        Students will be billed on a monthly basis through the Billing and Receivables Office and will incur a one percent finance charge if not paid by the specified due date. Any billed charge that remains unpaid beyond the end of the term is considered delinquent.
      2. Collection Process:
        When an account becomes delinquent, additional collection procedures will begin which may include one or more of the following actions:
        1. Special warning messages on the monthly statements.
        2. Special collection letters sent separately and in addition to the regular monthly statements.
        3. Referral of delinquent debtors to a credit bureau.
        4. Restrict future registrations and/or release of transcripts.
        5. Deduction against any other payment due from University.
        6. Assignment to a collection agency and litigation may be initiated.
        7. Offset of State funds.
      3. Deduction of Amounts Due:
        Collection methods in 4.A.(2)(g) require the debtor to be notified by letter that the account will be reported to the State of Illinois Comptroller's Office for deduction from any amounts due to the debtor from any agency of the State of Illinois (Ill. Rev. Stat. 1985, ch. 15, par. 210.05) unless a written request for a hearing is received by the Business Office within thirty days from the date of the letter.
      4. Appeal Process:
        A written appeal may be filed through the Business Office within thirty days of the billing date for disputed charges that cannot be reconciled through the charging department. All pertinent information will be obtained and reviewed by the Business Office staff. The Business Office staff will review the information as it relates to prescribed University regulations and render a decision based upon those regulations. In the event the student requests an additional review, the Vice President for Administrative Services, or his/her designee, will render a decision or submit the appeal to the Committee on Special Encumbrances.
    2. Returned Checks:
      1. Collection Process:
        All student personal checks returned unpaid by the bank will be notified by mail and/or telephone to immediately repay the check and the applicable service charge. Returned checks received from parents or other private sources are viewed as the student's responsibility which includes two-party checks. Returned checks are categorized from three major sources: checks paid to the University to clear University encumbrances for permission to register and release transcripts; checks paid to the University for services rendered; and checks paid to the University to obtain cash. Returned checks used to clear encumbrances to permit current registration will also carry a penalty of cancellation of current classes if unpaid five working days after notice was issued. Returned checks used to clear encumbrances in order to advance register for future terms carries the penalty of immediate cancellation of pre-registered classes.

        If three returned checks are received throughout the student's enrollment, a one-year cancellation of check-writing privileges will be enforced from the date the last returned check was received. Check cashing privileges may be suspended permanently if situations warrant. Personal resources (cash or money order) are to be used to repay returned checks. The use of financial aid is permissible only to
        the extent the financial aid is in excess of the University's educational costs minus the returned checks. Failure to make restitution for returned checks may result in administrative cancellation of currently enrolled classes.
      2. Deduction of Amounts Due:
        If payment has not occurred within the appropriate time frame after initial notification (described in 4.B.(1)), a letter will be sent notifying the student that he/she has until a specified date (ordinarily five working days) to make full restitution, make satisfactory arrangements to pay the amount due, or provide documentation indicating a bank error. Should none of the above occur, the Billing and Receivables Office, with the permission of the Vice President for Administrative Services, may pursue dismissal actions.
  5. Deductions:
    1. Employees:
      The Business Office unit responsible for the billing, collection, and notification of employees with delinquent accounts will be responsible for submitting the appropriate deduction form to the Payroll Office after due process steps described in 2. have occurred. No more than 25 percent of the net amount of payment may be subjected to offset. "Net amount of payment" is defined as "that part of the earnings of an individual remaining after deduction of amounts required by law to be withheld". Lump sum payments, accrued vacation, sick leave, and overtime are exempt from the 25 percent limitation.
    2. Non-Employees:
      The Business Office unit who is responsible for billing, collection, and notification of debtors with delinquent accounts will first attempt to deduct from any amounts payable to the debtor from the University after due process steps in 3. have occurred. If no such amounts are payable to the debtor, the appropriate deduction form will be submitted to the State of Illinois Comptroller's Office on a routine basis. The State Comptroller will then be in a position to make appropriate deductions from any state payment to the debtor.
    3. Students:
      No involuntary deductions will be initiated while an individual is in student status.
    4. Overlapping Payments and Deductions:
      Payments by employees which are made after a deduction has been submitted to the Payroll Office will not stop the deduction process. Payments by debtors which are made after a deduction has been processed against University checks or submitted to the State of Illinois may not stop the deduction process. See Refund below.
  6. Refund:
    A refund will be initiated when a credit on an account is created by the application of the deduction in conjunction with the debtor making restitution for indebtedness. A voucher will be prepared by the respective billing area.
  7. Reconciliation:
    1. Payroll Deduction:
      The Payroll Office will forward a copy of the appropriate deduction register to the respective area submitting employee deduction requests. The respective office will be responsible for processing the amount deducted as a credit to the customer's account within the same month the deduction from payroll occurred. The Payroll Office will be responsible for reconciling the deduction clearing accounts monthly.
    2. University Checks:
      Payments will be reduced by the amount due the University and deposited in the appropriate University account and credited in the same month to the vendor's receivable account.
    3. State Warrants:
      The Business Office will maintain a listing of all accounts submitted to the State Comptroller's Office for deduction. Notification of collection for amounts deducted from state warrants will be directed to the respective area. The Business Office will notify the state to cancel the deduction process within the normal routine process. Non-employee customer accounts will be written off in accordance with write-off procedures prescribed separately.