Debt Management

Debt Management

SUMMARY

The Debt Management Policy establishes the University’s approach to ensuring the efficient collection and recording of monies owed to the University.

POLICY

PurposeTo ensure the efficient collection and recording of monies owed to the University.

Overview

The University receives income from a variety of sources, enabling it to
carry out its business activities and achieve its strategic goals. Such sources include Commonwealth funding, student fees, investment income, research income and income from the utilisation of the University’s various assets.

This policy is designed to ensure the University meets the requirements of the Public Finance and Audit Act 1983 (NSW) (as amended) and the International Accounting Standards specifically with regard to the recording of monies owed to the University and debt management.

DEFINITIONS
Debtor: an individual or organisation who owes monies to the University for the provision of goods and/or services.

Student Debtor: an individual who has been enrolled in an award program or a unit at this University and owes monies to the University.

Trade Debtor: a debtor that operates its commercial activities external to this University.

Doubtful Debt: a debt that has a risk of non-recovery.

Bad Debt: a debt that is not recoverable.

Satellite Debtors System: a debtors system that is not integrated within the University Finance System.
ScopeThis policy applies to all staff responsible for the collection of revenue to the University.

Policy

CREDIT TERMS
The University will determine credit terms to apply to its debtors.

Trade Debtors
Credit terms are net 30 days from invoice date.

Student Debtors
Invoices for students must be paid by the date specified by the Chief Financial Officer (CFO).

Late Payment Fee
A late payment fee will be imposed for payments received after the due date or not in accordance with an approved extension or instalment plan.

An extension or instalment plan may be available, subject to approval by the CFO in the Office of Financial Services (OFS).

ACCOUNTABILITY
All outstanding debts must be recorded in the University Finance System.

CREDIT NOTE
Invoices can only be adjusted by the raising of a credit note.

DEBT RECOVERY
Trade Debtors
The OFS, in consultation with the Faculty, Department or Office, will recover outstanding debts of Trade Debtors.

Student Debtors
The OFS, in consultation with the Faculty, Department or Office, will recover outstanding debts of Student Debtors.

Macquarie Graduate School of Management (MGSM) Debtors
MGSM will recover the outstanding debts of MGSM Student Debtors and external debtors.

MGSM will report outstanding debt and their risk of recovery to the Office of Financial Services on a regular basis.

DOUBTFUL DEBTS
Reporting Requirement
The University is required to provide for doubtful debts in its annual accounts in accordance with Accounting Standard AASB 139.

Timing
The provision for doubtful debts will be reviewed on an annual basis and adjusted accordingly to reflect the risk of non-recovery of outstanding monies.

Methodology
The provision for doubtful debts of Trade Debtors will be based on specific debts greater than 60 calendar days.

The provision for doubtful debts of Student Debtors will be based on specific student debts where the student is no longer enrolled at Macquarie University.

Review
The methodology used to calculate the provision for doubtful debts will be reviewed on an annual basis to ensure it represents a reasonable estimate of risk to the University based on historical data.

BAD DEBTS
Timing
As a minimum, the University will write-off any bad debts once a year, after all attempts to recover the debt have been exhausted.

Approval
All requests for bad debt write-offs require the approval of the CFO.

Accounting
All bad debts that have been written-off will be written back to the cost centre that received the credit when the invoice was raised unless otherwise authorised by the Chief Financial Officer, Office of Financial Services.

Reporting
All bad debts written off will be reported to the Finance and Facilities Committee as detailed below:
  • less than A$5,000 –  twice a year in aggregate
  • equal to or greater than A$5,000 – to the next meeting of the Committee in detail
COMPLIANCE AND BREACHESThe University may commence applicable disciplinary procedures if a person to whom this policy applies breaches this policy (or any of its related procedures).

Policy Information

Contact OfficerAssistant Director, Revenue Services, Office of Financial Services
Date Approved2 December 2011
Approval AuthorityDeputy Vice-Chancellor and Chief Operating Officer
Date of Commencement2 December 2011
Amendment HistoryJuly 2012 – extend Next Review Date
November 2011 – updated with requirement for MGSM debt recovery, and compliances and breaches statement
June 2009 – alignment with University Policy Framework
Date for Next ReviewDecember 2014
Related Documents

Australian Accounting Standards Board

Public Finance and Audit Act 1983 (NSW) (as amended)
Policies / Rules Superseded by this PolicyDebt Management Policy approved 1 June 2009
KeywordsDebt, Debtor, Money, Monies
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