If you deposit a check with the State Treasurerís Office and it is returned by US Bank for insufficient funds, the State Treasurerís Office will create a journal entry debiting your Fund.132900 (NSF Suspense Account) for the amount of the returned check.† The Treasurerís Office will then send you a copy of the journal entry and return the check to the agency.
When you receive the copies, agencies should create a journal entry to credit the agency Fund.132900 and debit the agency BU.revenue object code where the money was originally deposited.† It is a good procedure to have a copy of the original Treasurerís Deposit Document and the Treasurerís journal entry as back-up for this JE.
Agencies should be monitoring this
account (Fund.132900) on a monthly basis to ensure that all JEís are being made
correctly.† To review
this account, go to General Accounting > Inquiries & Reports >
Accounting Inquiries > Account Ledger Inquiries > Account Ledger Inquiry.
†In the Account field enter your agency
Fund.132900, in the From Date field enter
If the differences are not obvious, you should export all the information for these columns:† Doc Number, Do Ty, G/L Date, Explanation, LT1 Debit, LT1 Credit. Then check off each dollar amount in the debit column that agrees to the same amount in the credit column.† Those amounts not checked off are your Ďproblemsí.† If you have several entries for the same dollar amount, it may be difficult to tell which debit matches which credit and you may need to drill down and review the details or do further research.
On a quarterly basis, the Treasurerís
Office will also send agencies an IBT for the returned check fees which
currently are $20.00 for each returned check.†
Agencies pay this IBT through the usual voucher processing on
Follow-up on the insufficient fund check
Agencies should have a policy on how to follow-up on insufficient fund checks.† For example:
When a check is returned for insufficient funds, the (employee title) will attempt to contact the person a minimum of two times to collect the money.† The first contact may be by phone and the second by written letter.† In either situation, the (employee) will explain to the person that they must bring in the cash or mail in a cashierís check or money order for the returned check plus a returned check fee of $20.00.† In addition, whenever this person wants to do business with this agency in the future, they must always pay by cash, a cashierís check or by money order.
If the returned check was for a license or other document that can be revoked, the person should also be informed that unless payment is made within 10 days (or an appropriate amount of time) the license or other document will be revoked.
It is always a good procedure to document your contacts when trying to collect on a returned check. †This documentation could be a log sheet indicating date you tried to make contact, date you made contact and a few notes about what was said.
≠Receipt of payment on a returned check
When an agency receives payment for a returned check, the money should be deposited with the Treasurer following the agency procedure for deposits.† The amount for the returned check fee should be deposited into object code (559100) that was (or will be) used to record the returned check fee from the Treasurerís Office.
Print Deposit document and have signed.† Take to State Treasurerís office.
The agency should also return the insufficient fund check to the owner.
When collection for a returned check cannot be made
When money due from an insufficient fund check cannot be collected, but a commodity has been distributed or service has been performed, the agency will need to document this event so that the information can be turned over to the State Claims Board for action.† The proper way to submit a claim is described next:† (These instructions received from State Claims Board)
The agency should submit a claim to the State Claims Board requesting permission to write the amount off as an uncollectible debt.
Two forms should be completed for this claim:
Since these claims go to the Legislature for approval and the Legislature has been looking closer at write offs in recent years, it may be beneficial for agencies to know that they need to provide detailed documentation that shows they made every reasonable attempt to collect the debt.