502 - Returned Payments Policy

Title

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

Introduction

Purpose

This policy provides guidance to departments at the University of North Carolina at Chapel Hill ("University") when the bank returns payments previously deposited. The Office of the State Controller provides guidance regarding the collection of receivables. Further, this policy specifically conforms to those guidelines set forth by the North Carolina Office of the State Controller and North Carolina General Statute § 25-3-506, dealing with the collection of processing fees for returned payments.

Policy

Policy Statement

It is the responsibility of each University department or school to pursue the collection of funds pertaining to returned payments. University departments must follow collection 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:

1. Purchases the item(s) from the bank,
2. Submits a journal entry back to the chartfield string that originally received credit when the payment was deposited, then
3. 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 $35, may be charged and collected for a payment on which the payor bank has refused payment 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.

University 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

• North Carolina General Statute § 25‑3‑506: Collection of Processing Fee for Returned Checks
• North Carolina Office of the State Controller: Policy 1100.05 - State Disbursing Policy - Collection and Depositing of Processing Fees for Returned Checks Except Those Offered in Payment of Taxes

University Policies, Standards, and Procedures

For detailed information about student payment options, visit:

• Office of the University Cashier Payment Options

Contact Information

Payments

Unit: Office of the University Cashier

Telephone: 919-962-1368

Email: cashier@unc.edu

Departmental Funding

Unit: Office of the University Cashier

Telephone: 919-843-0169

Email: funded@unc.edu