502 - University of North Carolina at Chapel Hill Policy on Returned Payments

Introduction

Purpose

This policy provides guidance to departments when payments previously deposited are returned by the bank. The Office of the State Controller provides guidance regarding the collection of receivables. Further, this policy specifically conforms with those guidelines set forth by the Office of the State Controller and N.C. General Statute 25-3-506 dealing with the collection of processing fees for returned payments.

Policy

Policy Statement

It is the responsibility of each department or school to pursue collection of funds pertaining to returned payments. Departments must follow collections guidelines articulated by the Office of the State Controller.

The Office of the University Cashier receives notice from the bank when items are returned due to insufficient funds or other reasons. Returned payments may not be redeposited. The Cashier's Office purchases the item(s) from the bank then submits a journal entry back to the chartfield string which originally received credit when the payment was deposited, and forwards the item(s) to that department for collection. The department approver(s) are responsible for approving the journal entry in a timely manner.

A processing fee, not to exceed $25, may be charged and collected for a payment on which payment has been refused by the payor bank because of insufficient funds or because the drawer did not have an account at that bank. If a collection agency collects or seeks to collect on behalf of a State agency such processing fee, the processing fee must be separately stated on the collection notice.

Departments must deposit the returned payment fees collected into the fund that provides the majority of the support for the following:

• The position responsible for collecting the fee.
• Other expenses incurred in collecting the fee.

Exceptions

None.

Related Requirements

External Regulations and Consequences

For detailed information about student payment options visit:

• Office of the University Cashier Payment Options
• Office of the State Controller
• N.C. General Statute 25-3-506 - Collection of processing fee for returned checks

Contact Information