Idea Transcript
GENERAL DEBTORS
1.
BACKGROUND AND PRINCIPLES
Whitsunday Regional Council incurs debts from ratepayers, residents and businesses within the region as part of its general business activities. These activities generally relate to the levying of fees and charges for services provided. Council allows a credit period at the end of which, these groups are required to pay monies owed to Council. This policy provides procedural direction to ensure the prompt follow-up and timely collection of overdue fees and charges. It also provides scope for recovery procedures to facilitate effective and flexible payment arrangements in order to achieve Council’s budgetary objectives, while at the same time giving due consideration and assistance to debtors who display genuine commitment to clearing their debt. 2.
SCOPE
This policy applies to all debtors of the Whitsunday Regional Council. 3.
POLICY OBJECTIVES
The objectives of this policy are to:
4.
minimise Council’s exposure to bad debts; and
provide a guide for the administrative processes relating to debt recovery.
POLICY STATEMENT
Obtaining Credit from the Council 4.1 No credit will be extended by Council until a “Credit Application” form is completed and signed by the person requesting the facility and due time (up to 7 working days) is given for consideration by Council of the application. Should the customer want to commence immediately they may do so on a cash or credit card basis only. 4.2 The Council’s standard “Credit Application” form will apply incorporating a Guarantee and Indemnity by the Directors (if the applicant is a Company) and incorporating the clause: “Council may or may not require a Bank Guarantee for the amount of credit given”. 4.3 Upon completion of a Credit Application, credit checks will be undertaken through a Credit Agent; should checks not be satisfactory a Bank Guarantee may be requested. 4.4 With every reference completed by a Credit Agent, Council will place an “Alert” on that customer to ensure that we are advised by the Credit Agency should any adverse activity
INTERNAL USE ONLY Policy No: 035.02 - Classification: Finance Adoption Date: 30 June 2017 Revokes: Policy No. 035.01 General Debtors 14 July 2015
-1-
GENERAL DEBTORS
occur. It will be at Council’s discretion at any time to withdraw the terms of credit should it so feel fit. 4.5 All requests for credit with Council under $500.00 will be at Council’s discretion as to whether credit checks are undertaken by a Credit Agent. 4.6 All requests for credit with the Council over $500.00 will be subject to credit checks by a Credit Agent. 4.7 Council will not grant Credit for entities under a Trust Name - only Companies, Businesses or private individuals may apply for credit. Reminder Notices 4.8 A period of thirty days after receipt of Council’s invoice shall generally be allowed for the debt owing to Council to be paid. 4.9 After the expiration of thirty days, the first of two reminders shall then be sent to all debtors whose accounts show outstanding amounts greater than $10.00. 4.10 The first notice shall be a polite reminder with no threat of legal or other action. Its purpose is to encourage debtors to contact Council staff if they are experiencing difficulties in paying their account to arrange a suitable payment regime to clear the outstanding debt. 4.11 Following the expiry of fourteen (14) days after the first reminder notice, a Final Demand Notice will be served giving the debtor seven (7) days in which to complete payment or make suitable arrangements. This notice should contain Council’s proposed action for recovery, state that interest will accrue on the debt commencing as from thirty (30) days from the due date of payment, and offer a further opportunity to contact Council staff to arrange an acceptable repayment schedule. Arrangements 4.12 Council shall not pursue further recovery action against a debtor who has an agreed periodic payment arrangement, while the arrangement is current and the debtor adheres to the agreed repayment schedule. Council reserves the right to renegotiate or cancel a payment arrangement, should circumstances change where the debt will not be paid within a reasonable time frame. In these circumstances, Council will not initiate further recovery action without reference to the debtor concerned. 4.13 Should a debtor propose a periodical payment arrangement, they will be advised of Council’s policy in 4.12 above, and that while an acceptable level of regular payment is made, therefore demonstrating a genuine attempt to clear the debt, Council may defer recovery action. 4.14 Where an agreed payment arrangement has elapsed without prior approval, the debtor will be deemed to be in default. INTERNAL USE ONLY Policy No: 035.02 - Classification: Finance Adoption Date: 30 June 2017 Revokes: Policy No. 035.01 General Debtors 14 July 2015
-2-
GENERAL DEBTORS
Legal Process 4.15 The debtor shall initially be contacted or attempted to be contacted personally by Council’s Debt Recovery Officer at that time and should remedy not be forthcoming in the following forms: a. Payment of debt is made in full; or b. An acceptable alternative arrangement to pay off the overdue debt has been agreed to; or c. The arrangement is on hold pending an investigation or awaiting a decision of Council; the debt will then be referred to either Council’s solicitor or an appropriate debt collection agency for recovery action. 4.16 Those agents acting on behalf of Council will be empowered to take whatever steps are necessary to recover the outstanding amounts, providing those steps are lawful. 4.17 Unless an acceptable payment arrangement is made, payment in full of the outstanding amount including all legal outlays will be required prior to the withdrawal of the current recovery action. 4.18 Prior to initiating legal action against a debtor, authorisation by the Chief Executive Officer or the Director Corporate Services shall be obtained. Interest 4.19 Unpaid accounts extending beyond 30 days after the normal terms of credit period may attract a penalty interest rate of 11% per annum charged and compounded monthly on the balance outstanding at the last day of each month. Write-off Procedures – bad debts 4.20 Bad debts of an amount exceeding $10,000.00 per customer may only be written off by resolution of the Council. 4.21 The Chief Executive Officer has delegated authority to write off amounts up to and including $10,000.00 per customer as a bad debt. 5.
RELEVANT LEGISLATION
Local Government Act 2009 Local Government Regulation 2012 6.
DEFINITIONS 7. CEO shall mean a person who holds an appointment as Chief Executive Officer of
INTERNAL USE ONLY Policy No: 035.02 - Classification: Finance Adoption Date: 30 June 2017 Revokes: Policy No. 035.01 General Debtors 14 July 2015
-3-
GENERAL DEBTORS
the Whitsunday Regional Council under section 194 of the Local Government Act 2009. This includes a person 8. acting in this position. 9. Council shall mean the Whitsunday Regional Council. 10. Debtor shall mean a person, group or organization who/which owes money to the Whitsunday Regional Council. 11. RELATED DOCUMENTS Whitsunday Regional Council Credit Application 12. DATE REVIEWED June 2017 13. NEXT REVIEW June 2018
INTERNAL USE ONLY Policy No: 035.02 - Classification: Finance Adoption Date: 30 June 2017 Revokes: Policy No. 035.01 General Debtors 14 July 2015
-4-