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Viewing Administrative Procedure 8.731 Administrative Procedure 8.731



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Student Accounts Receivable and Delinquent Financial Obligations

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Administrative Procedure Chapter 8, Business and Finance
Administrative Procedure AP 8.731, Student Accounts Receivable and Delinquent Financial Obligations
Effective Date:  May 2017
Prior Dates Amended:  January 1993, January 2000, August 2004
Responsible Office: Office of the Vice President for Budget and Finance/Chief Financial Officer
Governing Board and/or Executive Policy: EP 1.102, Authority to Manage and Control the Operations of the Campus
Review Date:  August 2018

I. Purpose

To provide guidelines for the recording, reporting, notifying, appealing, collection, and write-off of Student Accounts Receivable (Student AR).

To describe Delinquent financial obligations and Sanctions for not paying an obligation.  To provide and define clear and fair methods of collecting Delinquent financial obligations owed to the University of Hawai‘i (University). 

This procedure is based on Hawai‘i Administrative Rules, Chapter 20-10 as amended.  If a person has incurred a financial obligation to the University and payment is overdue, the University shall impose Sanctions as it may deem appropriate.

II. Definitions

A.    Appeal – A petition disputing the University’s notification of delinquent financial obligation.

B.    Debtor – Any person who owes a debt to the University.

C.    Delinquent – Being past due on student loan payments or other financial obligation or failing to pay for tuition and fees by a published date.

D.    Hearing Officer – A person duly designated by the University to preside over a hearing.

E.    Sanctions – The range of penalties which the University may impose when a financial obligation becomes Delinquent.

F.    Setoff – The application of a person’s State of Hawai‘i income tax refund or any other sums due to the person from the State, to a valid debt due and owing the University pursuant to the authority granted by sections 231-51 to 231-59, Hawai‘i Revised Statutes.

G.    Student Accounts Receivable (Student AR) – A receivable for charges associated with tuition, fees, housing and meal charges, etc. posted to a student’s account in the student information system.

III. Administrative Procedure

A.    Recording of Student Accounts Receivables

        Student AR is recorded in the University’s student information system by the registration and billing process.  Accounting transactions feed from the student information system to the financial management system.  Transactions credit the appropriate revenue accounts and debit the appropriate accounts receivable accounts.

B.     Delinquent Financial Obligations

        1.    Categories of Delinquent Financial Obligations

                A Delinquent financial obligation shall be deemed to exist when payment is past due or not made by the published or agreed upon date, provided that notice of the financial obligation has been made known to the person, with the exception of those contracts which state that such notice is not required.            

                a.    Overdue Contractual Obligations.  These obligations include but are not limited to:

                        (1)    Loan payments;

                        (2)    Payments on promissory notes, which include payments of loan principal and interest on short-term loan and long-term loan promissory notes.  Applicable collection costs, court costs, attorneys’ fees and any other costs incurred to recover the financial obligation may be added to the amount due on the loan obligation;

                        (3)    Payments for tuition or other mandatory fees, or both;

                        (4)    Payments for rent, including but not limited to student housing room and board, rental of facilities and equipment for which the person acted for himself or as an agent for a registered campus organization; or

                        (5)    Payments for any tuition assistance, including tuition waivers where the person did not or does not fulfill any eligibility criteria, term, or conditions of the agreement which were the basis of the award.

                b.    Overdue payments for goods or services provided, fines, or service charges.  These charges include but are not limited to:

                        (1)    Library fines;

                        (2)    Parking and traffic fines;

                        (3)    Service charges for dishonored checks; or

                        (4)    Other non-tuition charges.

                c.    Overdue payment of restitution on student accounts for unreturned, lost, damaged, or misused University property. These charges include but are not limited to:

                        (1)    Laboratory losses or breakage;

                        (2)    Locker, dormitory, or building keys;

                        (3)    Library books; or

                        (4)    Destruction or damage to property.

                d.    Overdue Payment of Financial Aid.  These charges include payment of financial aid when the person fails to meet any eligibility criteria, term, or condition of the financial aid.

C.    Notification of Delinquent Financial Obligation
    
        1.    When any payment on a financial obligation is overdue, and the University has made reasonable efforts to collect the financial obligation, the University shall forward the financial obligation to the appropriate business office.

        2.    The University shall send a letter to the last known address of the person (See Attachment 1). Notice shall be presumed to have been received three business days after mailing. The rights of the University to collect outstanding financial obligations and to apply any Sanctions listed are not waived by the failure of the person to receive the notification letter.

        3.    The notification letter shall include the amount owed to the University and the following information:

                a.    The Sanctions the University may impose if the obligation is not paid or arrangements acceptable to the University are not made within fifteen days from the date of the notice;

                b.    Notice that any person who alleges that a financial obligation has been improperly assessed or who deems a sanction imposed is excessive or unfair may file an Appeal with the Financial Management Office;

                c.    The place where copies of the applicable appeals procedure and the hearing request form may be obtained;

                d.    Statement that in addition to all other Sanctions, the University may seek redress under the law to recover monies owed to it.

        4.    The University shall withhold services from persons with Delinquent financial obligations, including the denial of registration.  Any person requesting withheld registration material shall be given the financial obligation statement and directed to the appropriate business office. The business office shall inform the person of the nature and amount of the financial obligation and provide the person with the following information:

                a.    The Sanctions the University may impose if the obligation is not paid or arrangements for repayment acceptable to the University are not made;

                b.    If the person requests, the business office shall provide the person with a copy of the applicable appeals procedure and hearing request form; or direct the person to the appropriate place where a copy of the applicable appeals procedure and request form can be obtained;

                c.    If the person settles the Delinquent financial obligation to the satisfaction of the University, or if the person files the appropriate form requesting a hearing, the University shall permit registration.

D.    Application of Sanctions

        1.    Cancellation of registration shall be imposed as a sanction provided no properly filed Appeal is in process and;

                a.    Tuition or mandatory fee payments are Delinquent and no arrangement acceptable to the University has been made for payment; or

                b.    The Hearing Officer has determined that the debt is owed and Sanctions are proper.

        2.    Denial of further registration may be imposed as a sanction in all other cases of a Delinquent financial obligation, which occur prior to registration and for which no Appeal has been filed.

        3.    Revocation of all rights and privileges which are or were conferred by the act of registration may be imposed as a sanction in all cases and at all times that the person’s name is listed on the official record of those who have Delinquent financial obligations with the University.  These Sanctions shall remain in force during the appeals and contested cases processes.

        4.    Denial of transcripts, diplomas, and other entitlements may be imposed as a sanction in all cases of Delinquent financial obligations.  These Sanctions shall remain in force during appeals and contested cases processes.

        5.    In all cases of Delinquent financial obligations, the University may utilize any of the following procedures to recover monies, which are owed to it;

                a.    Report the financial obligation, along with other relevant information to credit bureau organizations;

                b.    Setoff against a person’s Hawai‘i state income tax refund or any other sums due to the person from the State any amount over $25.00, which is due and owing to the University;

                c.    Initiate legal action to recover the amount which is owed, including appropriate interest, court costs and attorneys’ fees.

                d.    Contract the services of a collection agency to recover monies owed to it, including applicable collection fees, court costs and attorneys’ fees.  The collection agency may collect the applicable fees as authorized in a written contract with the University pursuant to federal and state law; and

                e.    Use the services of University personnel to collect monies owed to it, including applicable collection fees.

        6.    In addition to all other Sanctions, the University may seek redress under the law to recover monies owed to it.

        7.    Costs of implementing the Sanctions imposed under these rules may be assessed to the person owing the Delinquent financial obligation.

        8.    Sanctions imposed under these rules shall apply to all campuses of the University.

        9.    No sanction shall be imposed upon a person who has filed a petition for relief under Chapter 7, 11, 12, or 13 of the United States Bankruptcy Code, and where the automatic stay is in effect.  Supporting documentation to this filing must be presented.
            
        10.    Transcripts, diplomas, grades, credits and other entitlements shall not be conferred by the expiration of any statute of limitations in all cases of Delinquent financial obligations.

E.    Follow-up for Delinquent Student Accounts

        The University shall follow up on Delinquent student accounts after the first notification of Delinquent financial obligation.

        1.    Send out second Delinquent notices to students before the end of academic term;

        2.    Refer the Delinquent accounts to a collection agency if payment is not made by the final notice.

F.    Hearing Officers

    The chancellor of each campus, as appropriate, shall appoint Hearing Officers to hear appeals under these administrative procedures, except for the administrative Hearing Officers that conduct tax Setoff hearings under AP 8.621.

G.     Appeal Process

        1.    Appeals from Notices of Delinquent Financial Obligations.

                a.    Parking and Traffic Fines.  Appeals related to parking and operation of motor vehicles traffic fines shall be resolved under the procedures in Chapter 20-12, Hawai‘i Administrative Rules.

                b.    Student Loans.  Any person who is deemed to be Delinquent in student loan payments may file a written request for an informal review with the director of the University office that handles loan collection, no later than fifteen days from the date of the notification of financial obligation letter.  The director of the University office that handles loan collection shall issue a decision on the informal review.  Any person who still believes that the student loan obligation was improperly assessed or the sanction imposed is excessive or unfair may file a written Appeal with the Financial Management Office within fifteen days from the date of the decision on the informal review. (See Attachment 1). A designated Hearing Officer shall hear the case and render a decision within a reasonable time to each party.

                c.    Other Financial Obligations.  Any person who believes that a financial obligation (other than an obligation involving parking and traffic matters or student loan matters) was improperly assessed or the sanction imposed is excessive or unfair may file a written Appeal with the Financial Management Office, within fifteen days from the date of the Delinquent financial obligation notification letter (See Attachment 1).  A designated Hearing Officer shall hear the case and render a decision within a reasonable time to each party. 

                d.    Appeals Procedure.  In all contested cases where a person has properly filed a written Appeal (except appeals involving parking and traffic matters), a Hearing Officer shall send a written notice of hearing to the person by registered or certified mail with the return receipt requested, not less than fifteen days before the date of the hearing.  The notification letter shall include:

                        (1)    The date, time, place, and nature of the hearing;

                        (2)    The legal authority under which the hearing is to be held;

                        (3)    The particular sections of the statutes and rules involved;

                        (4)    A statement of the issues involved and the facts surrounding the alleged overdue financial obligations; and

                        (5)    The fact that any party may be accompanied by counsel at the party’s own expense.

                e.    The Hearing Officer shall hear the Appeal and render a written decision within a reasonable time and issue a copy of the decision to each party.

                f.    All Appeal hearings in the administrative procedure shall be informal in nature.  Either party may be represented by counsel of its choice and at its own expense and may summon witnesses, as it may desire.    The findings and conclusions of the Hearing Officer shall be confined to the facts of the case.  The person requesting the hearing need not be present at the hearing.  The evidence and arguments may be presented in writing.

                g.    The Hearing Officer shall make a finding as to whether the alleged financial obligation exists and all parties shall be bound by the Hearing Officer’s finding.

                h.    The Hearing Officer, except as provided in section F.1.j. of this administrative procedure, may also confirm, modify, or cancel any Sanctions imposed under these rules, as may be appropriate under the circumstances. All findings of fact and conclusions of law of the Hearing Officer shall be in writing and shall be effective upon notification of the parties. Hearing Officers' decisions shall be final within the University.  The parties shall be notified by electronic delivery or mailing of a certified copy of the decision.

                i.    The chancellor of the appropriate campus may extend the time for both Appeal and decision for good reasons, provided that no sanction in an appealed case shall be effective until after the Hearing Officer’s decision is rendered, except as provided in section III D.3 and 4. of this administrative procedure.

                j.    If the Hearing Officer finds that a Delinquent charge for tuition or mandatory fee(s) exists, the Hearing Officer shall authorize the cancellation of the person’s registration.  If the Delinquent charge is for tuition or mandatory fee(s) for any previous registration, the Hearing Officer shall authorize denial of further registration.  In both cases additional Sanctions may be imposed.

        2.    Appeals from Notices of Setoff of a Person’s Delinquent Financial Obligation Against a Person’s Tax Refund or Any Other Sum Due to the Person from the State.

Refer to AP 8.621, Delinquent Financial Obligation Tax Setoff Hearings.

H.    Time Limitations

        Any person who has not satisfactorily resolved his Delinquent financial obligation arising from the non-payment of tuition and fees, shall not be entitled to grades, credits, or courses completed for that academic period, regardless of the expiration of any statute of limitations.  Transcripts, diplomas, and other entitlements shall not be conferred by the expiration of the statute of limitations in all cases of Delinquent financial obligations.

I.    Allowance for Doubtful Accounts

        The University records an allowance for doubtful accounts on past due accounts for all accounts that have not been written off or forgiven. Prior to closing each fiscal year’s books, Bursar’s office shall analyze and adjust the allowance for doubtful accounts, with offsets to the appropriate revenue accounts or bad debt expense, in accordance with accounting guidelines.

J.    Write-Off of Uncollectible Account for Accounting Purposes

        1.    A receivable is considered for write-off when an account is deemed uncollectible and the account has been outstanding for at least two (2) consecutive years per Hawai‘i Revised Statutes, Section 40-8.  Prior to receiving the write-off approval, such an account would be included in the year-end recording of the allowance for doubtful accounts.
 
        2.    The request to write-off an uncollectible account is prepared by the University Cashier’s Office or the Loan Collection Office and submitted to the University General Counsel Office (UGC) with supporting documentation of the outstanding debt, collection efforts and the reason for uncollectibility.

        3.    When the UGC’s written approval is received, the University Cashier’s office or the Loan Collection Office shall be relieved from any further accountability for its collection unless the UGC finds that the facts as alleged and presented were not true or that the account has become collectible.

        4.    The write-off of an uncollected account is a bookkeeping entry only and does not relieve the Debtor from his financial responsibility to the University unless there are exceptions, e.g. bankruptcy, undue hardship, etc.  Although the uncollected account has been removed from the financial books and records (i.e., written-off as uncollectible), the University may still have a claim against the Debtor and may still seek legal remedy (i.e., file suit for collection in a court of law).

IV. Delegation of Authority

There is no administrative specific delegation of authority.

V. Contact Information

    
Treasury Office, 956-8527, or wendall@hawaii.edu
Website:  http://www.fmo.hawaii.edu/cash_handling/index.html#tab7

VI. References

Link to superseded Executive Policies in old format
Website:  https://www.hawaii.edu/policy/archives/ep/
Link to Administrative Procedures in old format
Website:  https://www.hawaii.edu/policy/archives/apm/sysap.php

VII. Exhibits and Appendices

Attachment 1:  Notification of Delinquent Financial Obligation (Sample)

Approved

    Signed    
    Kalbert Young    
    June 13, 2017    
    Date    
    Vice President for Budget and Finance/Chief Financial Officer

Topics

delinquent financial obligations, sanctions, setoff, appeal

Attachments