Debt Recovery

Policy
Sundry Debtors
(Accounts
Receivable)

Date policy was adopted by Council: 22 May 2013

Resolution number: 99/13
Previous Policy review date: May 2013
Next Policy review date: May 2016
Reference number: C1348021

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Policy Debt Recovery Policy - Sundry Debtors
(Accounts Receivable)
All Divisions

1 OUTCOMES:
To ensure the efficient and effective recovery of outstanding sundry debts (also
known as accounts receivable) while maintaining quality customer service.
Rates and charges are subject to a separate Rates and Charges Debt Recovery
Policy.
2 POLICY:
 To provide a framework within which procedures for the recovery of
outstanding sundry debts can be developed for Queanbeyan City
Council.
 To ensure all such debts owed to Council are paid by the due date and
followed up within specified timeframes.
 To ensure a strategic, equitable, accountable and transparent approach
to Council’s sundry debt management, collection decisions and practices.

3 DEFINITIONS (See the Civil Procedure Act 2005 - Section 3)

• Notice of Demand: Demand letter from Council’s legal recovery firm issued
in accordance with the ACCC guidelines as set out in ACCC v Sampson.
• Statement of Liquidated Claim: a legal document which outlines to the
debtor:
o That a claim has been made to the Court for the recovery of monies;
o Who has initiated the claim and whom the claim is against;
o The monetary value of the claim; and
o Time period available to relinquish the debt.
• Judgement: In cases where the debtor does not respond to a statement of
liquidated claim issued to them, Council can seek orders from the court that
default judgement be entered against the defendant. Alternatively, if the
defendant has filed a defence then Judgement is determined after the court
hears and makes a final judgement in the matter.
• Writ of Execution: Documentation served by a Sheriff on a debtor. This
document allows a court to seize goods and sell the goods. The proceeds
are then distributed to the defendant(s) less part or full payment of the debt
to Council. It should be noted that a defendant can stop these proceedings at
any stage by either making an acceptable arrangement with Council or by
paying the judgement debt in full.
• Garnishee: Legal document issued by the court ordering third parties who
hold funds on behalf of the defendant to pay such funds to Council.
Garnishees will be issued against the defendant’s wages, bank accounts or
any third party holding funds on behalf of the defendant.

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Policy Debt Recovery Policy - Sundry Debtors
(Accounts Receivable)
All Divisions

• Bankruptcy: Where Council has a default judgement against an

individual over $2,000 (excluding costs) Council may elect to proceed
with a bankruptcy notice and subsequent sequestration order. This is
utilised to enforce payment of the judgment debt.
• Winding Up Proceedings: Where Council has a default judgement
against a company over $2,000 (excluding costs) Council may elect to
proceed with a statutory demand for payment of debt and subsequent
originating process to wind up the company. This is utilised to enforce
payment of the judgement debt.
4 LEGISLATIVE OBLIGATIONS AND/OR RELEVANT STANDARDS
• Local Government Act 1993
• Local Government (General) Regulation 2005
• Council’s fees and charges schedule as updated annually
• Council’s delegation to the General Manager (TRIM C0923475).
• Home and Community Care Act 1985
• Ageing, Disability and Home Care – Community care common standards
guidelines
(http://www.adhc.nsw.gov.au/sp/delivering_hacc_services/community_c
are_common_standards)
• Rates and Charges Debt Recovery Policy
• Other Acts
- Roads Act 1993 – approved under Section 138 (Private works
within road reserve, includes inspection fees), Part 4 (road
closures) and Part 2 (Openings)
- Impounding Act 1993, Section 26(2)
- Noxious Weeds Act, Section 64
5 CONTENT:
Council has a responsibility to recover monies owing to it in a timely and
efficient manner to finance its operations. Council’s staff will take
appropriate steps to recover these outstanding debts in accordance with
the following principles:
5.1 Invoice Creation
Areas within Council may raise an invoice-
• Themselves using the bookings or licencing modules in Pathway where
appropriate,
• By completing an accounts receivable invoice request form (available on
Councils Intranet) immediately an amount becomes due and payable to
Council. Based on this request, Council’s Revenue Section will raise
invoices in accordance with the current fees and charges document or
grant/contribution conditions and GST provisions.

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Policy Debt Recovery Policy - Sundry Debtors
(Accounts Receivable)
All Divisions

5.2 Debt Management

Council’s Revenue Section will apply prudent debt management practices.
These include:
• Raising invoices promptly, ensuring debt is raised in accordance with
services provided, that account details are correct and GST provisions
are applied correctly,
• Issuing monthly statements for overdue accounts,
• Administering the outstanding debtor administration fee as prescribed in
Council’s current fees and charges document, for debts in excess of 30
days old excluding debts with special payment provisions
• Reviewing aged debtor reports monthly,
• Liaising with sections which requested the invoice to be raised to ensure
that all information is correct (supporting documentation will justify debt
in a court of law),
• Keeping regular contact with debtors,
• Negotiating exemptions, in consultation with the section initiating the
debt, depending on the nature of the debt or debtor eg. community
groups or welfare recipients and in accordance with Council policy.
• Ensuring that due process has been carried out so that the debt can be
proved in a court of law.
• Following a systematic debt recovery approach based on 30 day, 60 day
and 90 day timeframes
• Issuing follow up letters to debtors, referring aged debtors to Council’s
legal recovery firm which may issue letters of demand allowing for seven
days payment prior to instigation of legal action. Generally, the legal
action will start with a statement of liquidated claim (summons), and,
where necessary, will be followed by a Judgement Letter, writ of
execution or garnishee order. Council may in specific circumstances
issue Section 569 notices. See flow chart on Page 6 &7 of this policy.
• Report bad debts or doubtful debts to relevant manager or supervisor on
a regular basis.
• Recommend write off of sundry debtors when all avenues of recovery
have failed or it is uneconomical to proceed with the recovery process.
5.2.1 Debts with Special Payment Provisions
Cemetery Debts will be finalised within 12 months of entering into an
arrangement to pay.
If the debt is not paid in full within 12 months
 Cemetery plot will be forfeited and any payments refunded excluding the
outstanding Debtor administration fee outlined in Council’s schedule of
fees and charges, or
 Fees charged for the plot will be increased to reflect the current fees for
a similar lot (see Councils schedule of fees and charges).
Policy Debt Recovery Policy - Sundry Debtors
(Accounts Receivable)
All Divisions

Advance Bookings will be due and payable within 30 days of the invoice
being issued;
If the debt is not paid in full within 30 days a late payment administration fee
will be added to the account.
If the debt remains unpaid at the beginning of the new financial year (i.e. 1
July) the fee will be increased to reflect the new fees and charges as outlined
in Council’s schedule of fees and Charges for a the booking.
Home and Community Care (HACC) Debts These debts will not incur an
administration charge. Debt recovery of these debts will be assessed on a
case by case basis in liaison with staff from HACC as these debts are often
sensitive and may be able to be covered by community grants
5.3 Provision for Doubtful Debts
Aged debts greater than 90 days shall be reviewed and provided for as a
doubtful debt, following advice from the initiating section, according to an
assessment which has regard to:
• The size and nature of the debt.
• The debtor in question.
Aged debts less than 90 days may be provided for as a doubtful debt if the
recovery of the debt is known to be unlikely. Any adjustments to the provision
for doubtful debts shall be made annually and will be charged to a bad debt
expense account.
5.4 Write Offs
Under Regulation 213 of the Local Government (General) Regulation 2005 a
resolution or order writing off a debt to a council must:
• specify the name of the person whose debt is being written off, and
• identify the account concerned, and
• specify the amount of the debt, or must refer to a record kept by the
council in which those particulars are recorded.
Under Regulation 213 of the Local Government (General) Regulation 2005. a
debt can be written off only:
• if the debt is not lawfully recoverable, or
• as a result of a decision of a court, or
• if the council or the general manager believes on reasonable grounds
that an attempt to recover the debt would not be cost effective.
Debts shall be written off only when all reasonable attempts at recovery have
been taken.
Recommendations for write off shall be made by Council’s Revenue
Accountant to the Manager Finance following discussion with the area
responsible for the raising of the debt.
Debts that are considered irrecoverable, or where the cost of recovery is
uneconomic, shall be written off as a bad debt against the debtors account
and the provision for doubtful debts according to the appropriate delegated
authority.
Under Regulation 213 of the Local Government (General) Regulation 2005,
the fact that a debt is written off under this clause does not prevent the
council concerned from taking legal proceedings to recover the debt.
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Policy Debt Recovery Policy - Sundry Debtors
(Accounts Receivable)
All Divisions

6 DELEGATED AUTHORITIES
In accordance with Sections 377 of the Local Government Act 1993 the
following delegated authority applies:
• The General Manager has delegated authority to write off any bad debts
(not including rates or other charges for which the Act, or any other
regulation in force under the Act, makes specific provision for writing off
those amounts in specified circumstances) considered irrecoverable to
the limit of $1,000.
• Any amount in excess of $1,000 to be written off will require the
authorisation of Council for this action. All debts which require Council’s
approval to be written off, will be reported to Council.
6 PERFORMANCE INDICATOR
• LGMA Financial Health Check: Collection Performance Part of 5.1.
Sundry debtors outstanding plus arrears brought forward divided by
invoices raised.
Other Debtors <10% = Green, 10-15% = Amber, >15% = Red
This indicator assesses only the impact of fees on liquidity and measures the
effectiveness/adequacy of Council in recovering fees legally owed to it.
Council will aim to be in the green area with a ratio of < 10%.
• That all outstanding sundry debtors have had recovery action taken
against them, as set out in Council’s policy.
Appendix A
Debt recovery procedures of the Council and any agent employed by the
Council must meet the highest of ethical and professional standards. An
acceptable standard to meet is the guidelines and a debt collection
compliance guide for businesses that collect debts developed by the
Australian Competition and Consumer Commission (ACCC).
Policy Debt Recovery Policy - Sundry Debtors
(Accounts Receivable)
All Divisions

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Policy Debt Recovery Policy - Sundry Debtors
(Accounts Receivable)
All Divisions
Policy Debt Recovery Policy - Sundry Debtors
(Accounts Receivable)
All Divisions

POLICY:-
Policy No:
Policy Title: Debt Recovery Policy - Sundry
Debtors (accounts Receivable)
Date Policy was adopted by Council: 22 May 2013
Resolution Number: 99/13
Previous Policy Review Date: May 2013
Next Policy Review Date: May 2016

PROCEDURES/GUIDELINES:-
Date Procedure/Guideline (if any) was
developed:

RECORDS:-
Container Reference in TRIM: Policy
Container Reference in TRIM: Procedure
Other locations of Policy: Intranet (linked to TRIM Container)
Other locations of Intranet (linked to TRIM Container)
Procedures/Guidelines:

DELEGATION (if any):-

RESPONSIBILITY:-
Draft Policy developed by: Karen Seville, David Power
Committees (if any) consulted in the Sundry Debtors PDSA committee
development of the Draft Policy:
Responsibility for Implementation: Karen Seville
Responsibility for Review of Policy: Karen Seville

INTEGRATED PLANNING FRAMEWORK:

Community Strategic Plan: Strategic Priority No. 6
Delivery Program Title: Revenue Accounting
Operational Plan: Program No. 805

Senior Authorizing Position Signature/Date

Officer General Manager

22 May 2013

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Policy Debt Recovery Policy - Sundry Debtors
(Accounts Receivable)
All Divisions

ACTION COUNCIL RESOLUTION REPORT ITEM

MEETING DATE NUMBER NUMBER
NEW/RECONFIRMED/
AMENDED
New 21 May 2003 348 Item 4 AGM -
Corporate
Amended 16 June 2006 386 Closed Session
Amended 17 December 2009 625/08 Item 9
Amended 27 October 2010 270/10 3
Amended 22 May 2013 99/13 Item 13

DATE REVIEWED REVIEWER POSITION REVIEWER NAME