503.1 - University of North Carolina at Chapel Hill Procedure for Collecting Past Due Accounts Receivable


University of North Carolina at Chapel Hill Finance Procedure 503.1 - Procedure for Collecting Past Due Accounts Receivable



These procedures specify the steps the University of North Carolina at Chapel Hill ("University" or "UNC-Chapel Hill") must take to ensure past due accounts receivable are collected in a timely, fair, and cost-effective manner. Additionally, the UNC System Office has issued related procedural guidance for collecting past-due receivables and write-offs.


These procedures apply to all non-student accounts receivable at the University.


Accounts receivable, referred to hereafter as "accounts or uncollected billings that the University may submit for collection," include, but are not limited to:

  • Salary overpayments,
  • Contract work completed by the University for which the University has not received payment,
  • Fees owed to the University,
  • Deposited checks returned unpaid for insufficient funds, and
  • Nonpayment for goods or services purchased from the University.

The following is a list of the minimum information required for delinquent (past due) accounts, as applicable:

  • Full name (First, Middle Initial, and Last), and any previous name(s) or company name;
  • Mailing address;
  • Telephone numbers;
  • Federal Employer Identification number for company;
  • Social Security number for individuals (See the Federal Privacy Act of 1974); and
  • Details of the debt owed to the University (account number, amount owed, date of debt, etc.).

Age of Accounts and Collection of Past-Due Billings


An account that is invoiced but not due. For example, an account is invoiced on April 1 but not due until April 30. The period from April 1 through April 30 is considered current.

1-30 Days Past Due

In the above example, this period is from May 1 to May 30. The account is considered 30 days past due after May 30. The department will:

  • Mail the first past-due letter (demand letter) to the debtor,
  • Make phone contact, and
  • Receive a promise to pay.

31-60 Days Past Due

In the above example, this period is from May 31 to June 29. The account is considered 60 days past due after June 29. The department will:

  • Mail the second and final demand letter to the debtor, and
  • Send a confirmation letter for repayment.

For amounts owed by patients that are less than the federally-established deductible applicable to Part A of the Medicare Program: collection of the unpaid bills will follow the University's debt collection procedure.

Skip Tracing and Assessment of Interest and Late Fees

Using information collected about the debtor, departments should skip trace debtors when attempts, as outlined above, are unsuccessful. In addition, departments should assess interest based on the rate established under North Carolina General Statute (N.C.G.S.) § 105-241.21 from the date the debt was past due until it is paid. In addition, the department must assess a late payment penalty of no more than 10 percent of the account receivable.

The account should be forwarded to the Office of the Attorney General (OAG), and a copy should be provided to the University's Accounting Services if it is apparent within the first 60 days that:

  • Collection of an account will not be secured without legal assistance, or
  • Compromise of the claim is justified (i.e., a formal settlement is to be made by the Attorney General's Office, with part of the debt paid and the remainder discharged).

If the debtor is paying a debt in periodic payments satisfactory to the University, the account may be retained beyond 90 days until the account is satisfied.

61+ Days Past Due

At this point, refuse additional service to the delinquent debtor where this does not conflict with federal and state laws. When an account is more than 61+ days past due, the following remedial options are available for collecting past due accounts due to the University. Proceed as directed below:

Additional Options for Collection and Referral to the Office of the Attorney General (As Applicable)

The Office of the Attorney General (OAG) is the primary agency responsible for providing all legal services and advice related to the collection of accounts receivable in the State of North Carolina. Uncollected billings due to the University should be turned over to the Attorney General for collection anytime after 60 days after the due date of the billing if all other means (see below) have proven unsuccessful. Before contacting or sending uncollected accounts to the OAG, contact controller@unc.edu for further guidance. It is important to note that the OAG and a collection agency should not collect on the same accounts.

Use of Other Specific Collection Techniques

N.C.G.S. 147-86.22 states that the agencies and institutions may use, but are not limited to, the following practices or procedures for collecting accounts receivable:

  • Credit Bureaus - Typically used by collection agencies. State-approved collection agencies are required to use credit bureaus.
  • Collection Agencies
  • Voluntary Payroll Deduction, Liens, and Judgments
  • Administrative Offset - Use of the individual income tax setoff program.
  • Setoff Debt Collection Act (SODCA) Program

Voluntary Payroll Deductions, Liens, and Judgments

If the University decides it is cost-effective to do so, the University will obtain voluntary payroll deductions of the debtor's wages, liens against the debtor's assets, or judgments from the court in an effort to collect the funds due. Voluntary payroll deductions must be in writing and signed by the debtor.

Administrative Offset

Administrative Offset is the reduction of an individual's tax refund under:

  • N.C.G.S. Chapter 105A (SODCA);
  • N.C.G.S. Chapter 143, Article 60 (the State Employees Debt Collection Act (SEDCA)); or
  • A reduction of another payment, other than payroll, due from the state to a person to reduce or eliminate an account receivable that the person owes the state.

Accounts can be remitted to the North Carolina Department of Revenue (NCDOR) for collection through the SODCA program at the same time as OAG or collection agencies are attempting collection.

The following past-due receivables are exempt from submission to the setoff programs:

Setoff Debt Collection Act (SODCA)

The SODCA provides that North Carolina individual income tax refunds are subject to State claims. A refund in whole or in part may be applied against any past due indebtedness owed to the State, provided the debt and refund, if any, are at least $50.00. Effective Jan. 1, 2014, UNC Faculty Physicians are excluded from participation in recovering debts through SODCA (pending legal response on inclusion).

University departments with significant accounts receivable (in terms of the number of accounts or amount) are set up in the administrative system to submit past-due accounts to initiate administrative offset under SODCA. For administrative efficiency, the University's Accounting Services helps other campus units submit past-due accounts for administrative offset.

State Employee Debt Collection Act (SEDCA)

The second enactment, SEDCA, requires that employees whose salaries are paid in whole or in part by State funds must make full restitution of the amount owed to the State as a condition of employment or service. The employee can, in writing, request a payment plan for the debt owed.

Death/Dispute of Debt

If the debtor is deceased, management may discharge the debt. The debt may be discharged if, upon consultation with the Office of University Counsel:

  • the debt is determined to be legitimately in dispute, and
  • collection of the debt is compromised or impaired.

Refunds from the Setoff Debt Collection Program in Settlement of a Debt Owed to the University

Per N.C.G.S. 105A‑8: Within 10 days after the University receives a refund from a debtor, the University must send the debtor written notice that the University has received the refund. The notice must explain:

  • The debt that is the basis for the University's claim for the refund;
  • The University intends to apply the refund against the debt;
  • The debtor has the right to contest the matter by filing a request for a hearing.

The University must state:

  • The time limits and procedure for requesting the hearing, and
  • That failure to request a hearing within the required time will result in the setoff of the debt.

If the University does not send a debtor a notice within the time required by this subsection, the University must refund the amount set off plus the collection assistance fee, if any, retained by the University.

To comply with the N.C.G.S. 105A-8, a department directly receiving the refund in settlement of a debt owed is responsible for sending the debtor a written notice within 10 days of receiving the debtor's refund. If Accounting Services submitted the administrative offset, then Accounting Services would receive the refund on behalf of the department. In this case, Accounting Services would be responsible for sending a written notice within 10 days.

Statutes of Limitations

On federally funded loans, there is no statute of limitations.

In most instances, there is a three-year statute of limitations for University receivables. It will vary depending on the type of account and other factors. If any questions arise, contact the Office of University Counsel for verification. This does not relieve the debtor of their responsibility to the University. Departments should be aware of this when considering legal action, as the limitation rules offer a defense to the debtor. Therefore, all accounts receivable submitted for collection must be reviewed to ensure the status of the statute of limitations for that account.

The statutes of limitations in Chapter 1 of the N.C.G.S do not apply to the administrative procedures under SODCA and SEDCA.

Forms and Instructions

Reporting Requirements

The University is required to send a complete report of its accounts receivable at least quarterly, or more frequently if required, to the North Carolina Office of the State Controller (OSC). The report should include, at the summary level, the following:

  • The type of accounts receivable owed to the University,
  • An aging of the accounts receivable,
  • Any attempted collection activity and any costs incurred in the collection process,
  • Any accounts receivable that have been written off, and
  • Any additional information the State Controller considers useful.

To comply with quarterly accounts receivable reporting requirements, an Accounts Receivable Quarterly Activity Worksheet should be completed and submitted electronically to financial_accounting@unc.edu.

The quarterly reports are due to OSC within 45 days, calculated from the last day of the quarter. For example, the due date for reporting accounts receivable is Nov. 15 for the quarter ending Sept. 30. Accounting Services compiles this information from various units and sends one report to OSC for the University. To facilitate this process, completed Worksheets must be received by Accounting Services at least five business days before the due date.

For year-end accounts receivable reporting, the due date and the worksheet for providing the information will be announced by Accounting Services after the fiscal year-end.

Related Requirements

External Regulations

In 1979, the State enacted the SODCA (N.C.G.S. Chapter 105A) and the SEDCA (N.C.G.S. Chapter 143, Article 60), to facilitate the collection of debts owned by an individual to a State Agency. See also the Federal Privacy Act of 1974.

University Policies, Standards, and Procedures

Contact Information

Primary Contact

Unit: Cash Management

Telephone: 919-962-1601

Email: cash_management@unc.edu



  • February 18, 2016: Added Link for new Procedure 503.3.
  • June 29, 2015: Updated information on collecting accounts and added Related Data form.
  • July 1, 2010
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Article ID: 131525
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