5.1 Accounts Receivable

5.1.1 Objective #

To provide policies and procedures on returned checks.

This policy does not apply to gift pledges. Policies and procedures related to pledges to make a gift are set forth in the Advancement Services Policies & Procedures.

5.1.2 Returned Checks #

The following general policies apply to returned checks.

1. Previously deposited checks that are being returned from the bank as uncollectible are automatically debited to UTFI’s bank account. The checks are returned to the appropriate department, which will charge an appropriate accounts receivable returned checks fund.
2. A detailed record of returned checks must be maintained at all times.
3. When collections are received for returned checks, an official receipt must be written if the check is redeemed in person. Such funds should then be deposited to UTFI’s bank account and credited to the accounts receivable returned checks account that was initially charged when the bank returned the checks.
4. When collection is made for returned checks, a $10.00 minimum service charge should be assessed and included in the receipt. Returned checks related to donors will not be assessed a service charge.
5. Any service charges collected should be credited to the appropriate income fund when deposited.
6. On a monthly basis, the responsible office must reconcile the returned checks on hand to the amount shown on UTFI’s official records.
7. If a returned check is determined to be uncollectible, the procedures below must be followed to write off the amount from UTFI’s accounting records.

5.1.3 Write-Off of Uncollectible Returned Checks #

When a returned check proves to be uncollectible, the department should follow the write-off procedures above. The original returned check should be stapled to the completed WRITE-OFF memo.

5.1.4 Write-Off of Uncollectible Donor #

Returned Checks for Gifts
Returned checks resulting from checks deposited for gifts are addressed in the Advancement Services Policies and Procedures and in the Returned Checks section above. After collection procedures have been followed, the department will recommend for write-off the returned checks that have proven to be uncollectible. The checks and the Form T-35 should be submitted to the chief operating officer for write-off. Approval for the write-off must be maintained on file for audit verification. Accounts approved for write-off will be charged against the fund credited on the original deposit and the gift will be removed from the gift records.

Updated: June 1, 2021