91视频

1. Purpose

To communicate the Canberra Institute of Technology's (91视频) debt management processes to its students, staff, and commercial customers. This policy enables 91视频 to recover amounts owing to them so as to maximise their cash generation which in turn is used to provide services to customers and assists 91视频 in complying with relevant statutory obligations.

This policy applies where invoices are issued and not paid by the due date.

2. Scope

This policy applies to all 91视频 students, staff and commercial entities who have entered a legally enforceable transaction that requires the payment for a sale or, or provision of a good and/or service.

3. Principles

Debt Review and Verification

3.1 It is a condition of enrolment that fees are paid prior to the commencement of the course. When a student enrols in a unit of study, a valid debt arises and is recorded in Banner, generating an invoice.

3.2 Valid commercial debts, including rent/ leases, sale of assets, government funded courses, and employee recover costs, arise when goods or services are satisfactorily provided or fulfilled under the terms and conditions of the respective agreement.

3.3 A review of all debts outstanding will be carried out at least monthly by 91视频's Finance Teams.

3.4 The debt is collectable if the goods or services have been provided, or the student has enrolled and commenced studies.

3.5 If it is considered likely that the debt will not be collected, or will be uncollectable, then it will be assessed for impairment.

3.6 As part of the assessment of the debt for collectability, debtors will be contacted by telephone or email to confirm debt is valid and debtor is aware of the debt.

3.7 Overdue notices will be issued for all debts greater than 30 days' outstanding.

3.8 Where there is a question in relation to a debt, regardless of the nature of the question, the Manager of Financial Services in the 91视频 Finance team is to be consulted.

Impaired (Doubtful) Debts

3.9 Impairments should be documented with details of the nature of the debt, age of the debt, action taken to date, and any other relevant details for the Chief Financial Officer (CFO) to approve the provision for doubtful debt.

3.10 Debts are considered impaired (doubtful) when they are overdue by more than 120 days or are likely to be uncollected. Examples include:

1. Debtor is unable to be contacted;
2. Debtor is uncooperative and not making any payments;
3. Debtor is making minor payments but the debt is being repaid slowly and not on an agreed repayment timetable;
4. The personal circumstances of the debtor are such that the debt is unlikely to be paid e.g. unemployment, long term illness;
5. Debtor is known to be facing financial problems;
6. Debtor is declared bankrupt.

Determination of the Quantum of Impairment Required

3.11 The quantum of the impairment and recognition of expected credit loss is determined according to Australian Accounting Standards.

3.12 Expected credit losses are calculated on student debtors at a group level, and other debtors individually, at the end of each month.

3.13 The provision for doubtful debts will be reviewed by the Manager Financial Services and recommend to the Chief Financial Officer to consider for approval on a 6 monthly basis.

Bad Debts

3.14 Debts are considered bad when they are uncollectable after all reasonable collection efforts have been made. A debt may be considered to have become bad in any of the following circumstances (Taxation Ruling 92/18 Paragraph 31):

1. the debtor has been declared bankrupt.
2. the debtor has deceased;
3. the debtor cannot be traced, and the creditor has been unable to ascertain the existence of, or whereabouts of, any assets against which action could be taken;
4. where the debt has become statute barred (the age of debt exceeds 6 years) and the debtor is relying on this defence (or it is reasonable to assume that the debtor will do so) for non-payment;
5. if the debtor is a company, it is in liquidation or receivership and there are insufficient funds to pay the whole debt, or the part claimed as a bad debt;
6. where, on an objective view of all the facts or on the probabilities existing at the time the debt, or a part of the debt, is alleged to have become bad, there is little or no likelihood of the debt, or the part of the debt, being recovered. Debtor is declared bankrupt.

Expensing Bad Debts

3.15 Bad Debts are determined in 3 ways:

1. An initial evaluation and it is considered uneconomical to pursue the debt; or
2. The debt recovery process or legal action is not able to recover the debt; or
3. The debtor meets the ATO guidelines as noted above.

3.16 Debts that are considered a bad debt are written-off to bad debts expense, or the impaired (doubtful) debt provision is extinguished if the debt had been transferred to bad debts.

3.17 All debt write offs are approved by submitting a brief to the relevant delegate addressing the criteria in paragraph 3.14, and exercised in accordance with the 91视频 Financial Delegations.

Financial Assistance/ Hardship

3.18 91视频 follows the (Debtor Management Policy) for guidance on Financial Hardship.

3.19 There are exceptional circumstances where an individual (or business) may face hardship, such as loss of employment or illness, restricting the capacity to repay monies owed.

3.20 Special consideration may be given to ensure the recovery of monies owed does not result in any undue financial hardship for the individual or business.

3.21 Subject to approval by the delegate, 91视频 may provide assistance options including, but not limited to:

1. Extension of the due date;
2. Development of a payment plan, subject to Section 131 of the Financial Management Act 1996 (FMA);
3. Reduced interest or penalties;
4. Review eligibility for concession; and/or
5. Transferring payment to a future enrolment in circumstances where the student was unable to complete the study.

3.22 Any debt write-offs or adjustments must be approved in consultation with the Manager Financial Services.

3.23 All matters around debt management are to be exercised in accordance with the 91视频 Financial Delegations.

Debt Recovery

3.24 91视频 Finance team and the officer responsible for student debt in Banner will be responsible for monitoring unpaid and partially paid invoices which are passed their due date. This process must be undertaken at least monthly and for month end and year end reporting purposes.

3.25 The decision to pursue recovery or impair a debt must exercised in accordance with the 91视频 Financial Delegations.

3.26 The Whole of Government Mercantile Agent will be used for external debt recovery services.

3.27 The nominated delegate will authorise commencement of external debt recovery services when sufficiently satisfied the debt may be recoverable.

3.28 The nominated delegate will continue to request further work be undertaken until they are satisfied the debt may be recoverable.

3.29 The nominated delegate must be satisfied that:

1. It is economical to pursue recovery of the debt, and that the probable cost of recovery action will not exceed the return;
2. The debt is recoverable by law; and
3. Sensitivities regarding the nature of the debt and the debtor's situation have been considered on a case-by-case basis in accordance with 91视频s Debt Management Procedure.

3.30 The nominated delegate must follow prescribed debt management procedures which include:

1. Establishing the debtor is aware of the debt;
2. Issuing overdue notices to debtors for unpaid invoices;
3. Recording and documenting all conversations and correspondence with a debtor during the debt recovery process in accordance with the debt management procedures;
4. Resolving any disputes regarding payment of invoices in a timely manner and notifying the debtor of any resolution or outcome; and
5. Negotiating a payment plan for debtors that are unable to pay their invoice in total, by the due date, after assessing their ability to pay.

3.31 Once a debtor has been referred to external debt recovery services, it is automatically deemed an impaired debt due to the need to engage a debt collector.

3.32 Debt Recovery Process:

1. The Chief Financial Officer is responsible for monitoring Key Performance Indicators of the Debt Recovery Agency for compliance with contractual arrangements.

Debt Recovery - Legal Proceedings

3.33 In accordance with the ACT Government Debtor Management Policy, problematic debt may be recovered using legal proceedings.

3.34 91视频 is required to seek direct approval through the Solicitor-General of the ACT to use legal proceedings.

3.35 The nominated delegate must ensure that all applicable risks, social sensitivities and legislative requirements have been considered prior to commencing legal proceedings.

Interest Penalties

3.36 The ACT Government Debtor Management Policy and 91视频 delegations allow for interest penalties to be applied to outstanding debts.

3.37 The Chief Executive Officer may authorise applying interest penalties to debts in accordance with the ACT Government Debtor Management Policy, following recommendations from the area of the debt, with consideration to items such as:

1. Ability to collect on the original debt prior to application of the penalty;
2. Whether there is an ongoing relationship with the debtor;
3. The cost of administering the penalty versus the value of the penalty; and
4. Any other items considered relevant to the assessment.

3.38 91视频 does not apply interest penalties to debts.

Monitoring and Reporting

3.39 Debtors are reported to the Board and Executive Management Committee on a monthly basis, including details of age and nature of the debt.

4. Documentation

This policy should be read in conjunction with the following related documents:

• (91视频 Staff Only)
• 91视频 Revenue and Receipting Policy
• 91视频 Revenue and Receipting Procedures
• 91视频 Fees Policy
• (91视频 Staff Only)
• 91视频 Finance Policy
• 91视频 Fringe Benefits Tax (FBT) Policy

6. Policy Contact Officer

Senior Human Resource Director or 91视频 Workplace, Health and Safety Manager.

Contact 91视频 Student Services on (02) 6207 3188 or email infoline@cit.edu.au for further information.

7. Procedures

This policy is implemented through the following related procedures:

• 91视频 Debt Procedure - Process Flow Chart
• 91视频 Fees Procedures

Authority to make changes to the procedures rests with the Manager Financial Services, and Manager Financial Reporting, Policy and Assurance.