A2501 DELINQUENT ACCOUNTS RECEIVABLE.PDF

MARICOPA COUNTY INTERNAL POLICY
Policy Number: A2501
Policy Title:
Current Adoption Date:
DELINQUENT ACCOUNTS RECEIVABLE
Current Implementation
Date:
Approved by: Board Agenda Number:
C-18-19-010-6-00
BOARD OF SUPERVISORS
Original Adoption Date: June 1998
I. PURPOSE
To establish procedures and guidance to ensure Departments properly value accounts receivable
through regular review and evaluation of delinquent accounts receivable.
II. APPLICATION
This Policy applies to all Maricopa County appointed departments as well as the Flood Control
District of Maricopa County, the Maricopa County Library District, and the Maricopa County
Stadium District (Special Districts). The Board of Supervisors is authorized to jointly adopt policies
applying to the Special Districts under the Intergovernmental Agreement, C-06-18-393-6-00,
approved on April 11, 2018.
This policy also applies to employees of County elected offices unless the elected official has
implemented a similar policy specific to their office.
III. DEFINITIONS
A. Accounts Receivable: An asset account for amounts due from goods or services provided by
Departments to individuals, organizations, businesses, governmental entities, etc. Accounts
receivable can occur through imposition which arise as a matter of law (e.g. property taxes,
court ordered judgments, fines, fees, and restitution) or by transaction (i.e. a good or service
is provided through an exchange of money or by an amount due on an account).
B. Collection Agency: A County contracted outside organization which specializes in debt
collection.
C. Debtor: The individual, organization, business, and/or governmental entity which owes monies
to a Department.
D. Delinquent Accounts Receivable: Accounts that are past due by a predetermined number of
days.
E. Department: For the purpose of this Policy, “Department” refers to any division of the County
including elected and judicial branch offices, and Special Districts.
F. Uncollectible Accounts Receivable: A delinquent account that, for the sake of efficiency,
financial reporting integrity, and a consideration of reasonable collection efforts, is removed
from the County’s books of account but is not forgiven.

Policy Title: Policy Number: A2501
DELINQUENT ACCOUNTS RECEIVABLE Current Adoption
Date:
IV. POLICY
A. All Departments that actively generate accounts receivable must develop internal policies and
procedures regarding billing, maintaining and tracking accounts receivable, and collection
efforts.
B. Payment is due at the time goods or services are provided. If not possible, then establish an
Accounts Receivable account with the following information from the debtor:
1. Individual or Business name;
2. Physical home or office address;
3. Telephone numbers for home or office; and,
4. Driver’s license number or business tax identification number
C. Amounts due are to be billed at a reasonable time after the amount due is known and collectible (i.e.
goods or services have been provided).
D. The Department will prepare and review an accounts receivable aging report on a monthly basis to
determine accounts receivable that become past due or delinquent.
E. A Department’s internal policies will outline their reasonable collection efforts to collect monies
past due and procedures for documenting collection efforts. The following are examples of
collection efforts:
1. A statement or invoice showing the past due amount;
2. Written notice documenting the amount past due;
3. Phone call with the date of the call, name of the individual contacted and results of the call
documented.
F. Reasonable collection efforts must take into account the cost-effectiveness of the collection
efforts. The effort expended to collect the monies should be in proportion to the amount
outstanding.
G. In addition, Departments will consult with the Maricopa County Attorney’s Office (MCAO) for
delinquent accounts in which the debtor is unable to pay for services provided due to an
unusual debt discharge circumstance, such as bankruptcy, death, incarceration, etc. As this
list is not all inclusive, Departments will consult with the County Attorney assigned to represent
their Department.
H. Per the Arizona Constitution, Article IX, Section 7, neither the state, nor any county, city, town,
municipality, or other subdivision of the state shall ever give or loan its credit in the aid of, or
make any donation or grant, by subsidy or otherwise, to any individual, association, or
corporation, or become a subscriber to, or a shareholder in, any company or corporation, or
become a joint owner with any person, company, or corporation, except as to such ownerships
as may accrue to the state by operation or provision of law or as authorized by law solely for
investment of the monies in the various funds of the state.
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Policy Title: Policy Number: A2501
DELINQUENT ACCOUNTS RECEIVABLE Current Adoption
Date:
1. The Arizona Constitution is interpreted to mean amounts that are due to the County that
are determined to be uncollectible are not forgiven, but may, for the sake of efficiency,
financial reporting integrity, and a consideration of reasonable collection efforts, be
removed from the County’s books of account.
I. Pursuant to ARS 42-18101, delinquent property taxes are enforceable by law (sale of tax
liens) and are exempt from this policy.
J. If a Department has made reasonable but unsuccessful collection efforts, the Department has
the discretion to turn the delinquent account over to an outside collection agency under County
contract.
1. If the account is not sent to an outside collection agency, the Department must maintain
sufficient documentation as to why additional collection efforts were not pursued.
2. If the account is sent to an outside collection agency, the Department must submit all
debtor documentation and collection effort documentation to the collection agency and
cease all contact with the debtor.
K. If collection efforts are unsuccessful, the Department Director (or designee), may determine
that the account is uncollectible.
L. The Department must maintain a listing of all accounts determined to be uncollectible.
M. Since much of the County’s basis of accounting is cash or modified accrual, receivables are
frequently not entered in the financial accounting system. Uncollectible accounts not entered
into the financial accounting system will not require a journal entry to remove the amount from
the financial accounting system. Departments must maintain an offline system for tracking
accounts receivable.
N. If the receivable has been entered in the financial accounting system, the Department must
prepare a journal entry to remove the amount from the financial accounting system. The
journal entry must comply with A2514 – Journal Vouchers.
Revision History
Version Revision Date Description of Revision
1 6/1/1998 Initial version.
2 Review and update terminology to be consistent with other policies. Updated
references to the County financial system. Removed sample collection letter and
assignment to counsel form. (C-18-19-010-6-00)
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