REPORT TO COUNCIL
SUBJECT
Title
Action to Approve an Accounts Receivable Collections and Write-Off Policy
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
Accounts receivable represents expected income for services performed, goods sold, or other miscellaneous billings (e.g., fines and penalties, third-party property damage, etc.) that the City of Santa Clara (the "City") has not yet received payment. Accounts receivable internal controls and policies provide formal guidance to ensure that invoices are accurately recorded, customers pay in accordance with agreed upon terms, past-due accounts are properly pursued, and the write-off of past due accounts are appropriately approved and reflected in the City's financial statements.
The Government Finance Officers Association (GFOA) recommends that state and local governments adopt comprehensive written revenue control and management policies to establish proper control over receipts and receivables and help ensure sound financial management practices.
Furthermore, Section 904 of the Santa Clara City Charter provides that the Director of Finance shall collect all taxes, special assessments, utility charges, license fees and other revenues of the City for whose collection the City is responsible. The Municipal Services Division Utility Services Rules and Regulations authorizes the Director of Finance to write off utility accounts with a balance of $5 or less, non-sufficient fees, late fees, and balances deemed uncollectible by an outside collection agency.
DISCUSSION
In accordance with best practices, the City's Finance Department (the "Finance Department") recommends adoption of the Accounts Receivable Collections and Write-Off Policy (the "Policy"). The Policy will help ensure that all reasonable diligence is used to collect and reduce outstanding receivables, provide collection agency guidance, refine measurement of the City's accounts receivables for fina...
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