BILLING FOR MATERIALS & SERVICES ON AUDITOR-CONTROLLER
INVOICES
NUMBER:
B.1.
DEPARTMENTS & DISTRICTS AFFECTED:
ALL AGENCIES, DEPARTMENTS, AND DISTRICTS
GOVERNED BY THE BOARD OF SUPERVISORS
EFFECTIVE:
12/8/83
REVISED: 01/02
_________________________________
David E. Sundstrom, Auditor-Controller
1.
POLICY
All departments/agencies governed by the Board
of Supervisors shall, whenever legally permissible,
bill governmental agencies, private organizations,
and individuals when the amount due for County-provided
materials and/or services is $25 or more. This procedure
does not address billings for loans, notes receivables,
overpayments made by the County, or the recovery
of assistance payments.
Invoices should be prepared in a timely manner,
generally within 10 working days from the receipt
of all billing information and should include all
allowable overhead. Amounts due of less than $25
shall be paid at the time the materials and/or services
are provided. If this is not practical, the amount
shall be billed on letterhead or other form at the
discretion of the department/agency (see Section
2.3 of this procedure).
Amounts due the County for certain categories of
County-provided materials and/or services are excluded
from this policy and procedure for various legal,
administrative, and accounting reasons. These exceptions
are listed in Exhibit III by department/agency,
description of service, type of billing, and reason
for exclusion from this policy and procedure. Only
the exceptions listed in Exhibit
III are excluded from this policy and procedure.
Further exceptions must be approved by the Auditor-Controller.
All departments/agencies governed by the Board of
Supervisors should review current policies regarding
assessment of late charges or penalties, including
the County Billing Policy for contracted services
(see Exhibit V).
Whenever applicable, billings should include the
appropriate late charges, fees, or penalties in
order to achieve full cost recovery.
1.1
Purpose
To formally record, on a timely basis, all
obligations due the County, in order to provide
better control over monies due, place into
effect a positive uniform collection and follow-up
procedure, ensure that the County’s
financial statements will properly reflect
accounts receivables, properly record payments,
and to comply with generally accepted accounting
principles.
1.2
Authority
1.2.1
Board of Supervisors' Resolution No.
64-185, dated February 11, 1964
Authorizes and directs the Auditor-Controller
to institute a system of centralized
accounting and control of accounts receivable
for all departments of the County of
Orange.
1.2.2
Board of Supervisors' Resolution No.
82-162, dated February 2, 1982
Authorizes the Auditor-Controller
to prescribe the accounting policies
for departments, agencies, and districts
under the control of the Board of Supervisors.
Describes the duties and responsibilities
of the Auditor-Controller, relating
in part to the general supervision over
the accounting forms and methods of
keeping accounts.
1.2.3
Board of Supervisors’ Minute
Order Dated October 27, 1992
Describes the County Billing Policy
for contracted County-provided materials
and/or services to cities and other
outside contracting entities. This policy
and procedure includes provisions for
late charges for delinquent payments,
and for discounts for early payments.
1.3
Definitions
1.3.1
Billing
A written statement, usually itemized,
of charges for materials provided and/or
services rendered, on County of Orange
Auditor-Controller Invoice Form No.
003 F8500-5.1 (Exhibit
I). Billings may be accompanied
by special forms required by the recipient
or by the department/agency.
1.3.2
Credit Memo
A written statement on County of Orange
Credit Memo Form (Credit Memo) No. 003
F8500-256 (Exhibit
II), or other form, which must include
proper signature authorization, as defined
under Section 2.2.1
of this procedure, and which is used
to reduce the amount of an unpaid billing.
1.3.3
Accounts Receivable Subsidiary Ledger
A listing, by fund/agency and by invoice
number, of all open (unpaid) receivable
accounts for each department/agency.
Each subsidiary ledger for the invoices
set up in the Auditor-Controller Accounts
Receivable System should total to the
dollar amount of Balance Sheet Account
Codes 8200 (Accounts Receivable Miscellaneous
– A-C) and/or 8470 (Due From Other
Governmental Agencies- A-C), for each
fund/agency. Balance Sheet Account Codes
8200 and 8470 are used only by the Auditor-Controller
Collections Unit. Each subsidiary ledger
for invoices not forwarded to the Collections
Unit should total to the dollar amount
of Balance Sheet Account Codes 8210
(Accounts Receivable, Miscellaneous)
or 8480 (Due From Other Governmental
Agencies), if recorded in the General
Ledger.
1. 4
Forms
1.4.1
Invoice Form
The County of Orange Auditor-Controller
Invoice Form No. 003 F8500-5.1 is a
standard 4-part form available from
PFRD Publishing Services. (See Exhibit
I.)
1.4.2
Special Invoice or Claim Forms
Invoice or claim forms required by
the recipient or issued by the department/agency.
1.4.3
Credit Memo
County of Orange Credit Memo Form
No. 003 F8500-256 is a standard 4-part
form available from PFRD Publishing
Services. (See Exhibit
II.)
1.4.4
Invoice/Credit Memo Transmittal
The Invoice/Credit Memo Transmittal
is utilized as a transfer of accountability
and batch summary document for Invoice
and Credit Memo copies submitted to
the Auditor-Controller. (See Exhibit
IV.)
2.
PROCEDURE
2.1
Billings
2.1.1
Preparation of County of Orange Auditor-Controller
Invoice Form
Billings prepared on the Auditor-Controller
Invoice Form (Exhibit I) must be typed,
written, or printed legibly for correct
data entry, and must contain the following
information:
Date prepared.
Full name and complete address
and phone number of recipient of
service and/or material.
Social Security Number of recipient
(optional). Applicable if billed
to an individual.
Indication if the recipient is
a government agency (appropriate
box marked with an "x").
Complete account coding within
the designated spaces (refer to
County of Orange Chart of Accounts):
Fund
Agency
Organization (if applicable)
Object Code, Revenue Source
or Balance Sheet Account (whichever
is applicable)
Sub-Object or Sub Revenue
Source Code (if applicable)
Job Number (if applicable)
Reporting Category (if applicable)
Purchase Order Number (if applicable).
Name and phone number of preparer.
Quantity of items or number of
hours, etc. being billed (if applicable).
Description of material provided
and/or service rendered, including
dates of service or shipment.
Price per unit (material) or per
hour (service) (if applicable).
Total amount due.
2.1.2
Special Invoice or Claim Form(s)
Prepare any special invoice or claim
form(s), which are required by the recipient
or issued by your department/agency
to supplement the Auditor-Controller
Invoice. Include a copy of such forms
with the Auditor-Controller copy of
the Invoice (Exhibit
I). (See Section 2.1.4.2.)
2.1.3
Preparation of Invoice/Credit Memo
Transmittal
Prepare an Invoice/Credit Memo Transmittal
(Exhibit IV) for each batch of invoice
copies sent to the Auditor-Controller.
Complete the form with the following
information:
Date.
Name of department/agency.
Beginning and ending numbers of
each sequence of invoices issued.
Total dollar amount of each sequence
of invoices issued.
Grand total dollar amount of invoices
in the batch.
Name and phone number of preparer.
Credit Memo amounts shown in brackets
2.1.4
Distribution of Invoices
2.1.4.1
Auditor-Controller Invoice Form
White original and blue
carbon copy – mail to
recipient.
Pink carbon copy –
send to the Collections Unit
along with the Invoice/Credit
Memo Transmittal.
Gold carbon copy –
retain for department/agency
file.
2.1.4.2
Special Invoice or Claim Form(s)
Original – mail to
recipient.
Copy – send to the
Collections Unit attached
to the pink copy of the Auditor-Controller
Invoice Form.
Copy – retain for
department/agency file.
2.1.5
Recording Accounts Receivable
The Collections Unit records each
billing in the County accounting records
by means of an automated or manual journal
voucher. The total amount due on the
invoice is recorded in the General Ledger
to the corresponding fund/agency and
Balance Sheet Account Code 8200 (Accounts
Receivable, Miscellaneous – A-C)
or 8470 (Due to Other Governmental Agencies
– A-C) as a departmental/agency
account receivable.
2.1.6
Review of Accounts Receivable
A copy of each department’s/agency’s
monthly subsidiary accounts receivable
ledger is distributed each month by
the Collections Unit.
Each department should reconcile its
own records to the Auditor-Controller
Accounts Receivable Subsidiary Ledger
at least once each month to check for
any errors and update outstanding balances.
Notify the Collections Unit in writing
of necessary corrections so that they
may make appropriate adjustments.
2.1.7
Coding of Payments Received on Accounts
Receivable
Payments on Auditor-Controller Invoices
should be received at the Collections
Unit. However, if payments are received
at the originating department, then
the deposit order for these payments
should be coded to Balance Sheet Account
Code 8200 (Accounts Receivable-Miscellaneous
– A-C) or to 8470 (Due to Other
Governmental Agencies – A-C).
Include the invoice number as a reference.
Do not code payments received on invoiced
accounts to a revenue source code, or
the invoice will remain open and unpaid
on the Auditor-Controller’s records,
and collection actions will be initiated
against the recipient. Contact the Collections
Unit if any questions arise concerning
proper coding of payments on the Invoices.
2.2
Correction of Invoiced Amounts
2.2.1
Correction of Overbilled Amounts
To correct an amount billed in excess
of the amount actually due, prepare
a Credit Memo or other form to decrease
the amount originally billed (applies
only to outstanding invoices). The Credit
Memo must contain the following information:
Date prepared.
Name and address of recipient.
Account coding.
Number of the invoice being corrected.
Reason for the adjustment.
Amount of the credit.
Signature of the department accounting
manager or similar position who
manages the invoicing process. This
may be delegated by submitting an
authorized signature list to the
Accounts Receivable Manager.
Distribute the Credit Memo copies as
follows:
Original – mail to the recipient,
unless the recipient does not require
a credit memo, as in the case of
some State-funded programs.
Auditor-Controller copies –
send to the Collections Unit with
an Invoice/Credit Memo Transmittal
Form.
Departmental copy – retain
for departmental/agency file.
2.2.2
Correction of Underbilled Amounts
To correct an amount billed which
is less than the amount actually due,
prepare a Credit Memo or other form
canceling the total amount of the original
billing. Issue a new invoice for the
correct amount, following the procedures
in Section 2.1 of
this policy and procedure.
2.2.3
Invoice/Credit Memo Transmittal
Prepare an Invoice/Credit Memo Transmittal
Form (see Exhibit
IV) as described in Section
2.1.3 for each credit memo copy
or batch of credit memo copies submitted
to the Auditor-Controller. Show the
dollar amount on the Transmittal Form
as a credit amount in brackets.
2.3
Amounts Less than $25
Collect amounts due to the County of less
than $25 at the time services are rendered
or materials are provided. No invoices are
to be prepared for amounts due of less than
$25, because the cost of invoice processing
exceeds the amount billed.
If it is not administratively practical to
require payment at the time services are rendered
or materials are provided, at the discretion
of the department/agency, amounts less than
$25 may be billed on department/agency letterhead
or other form. The letterhead or form should
contain the following information:
Name of department/agency.
Description and date materials and/or
services provided.
Dollar amount due.
Account coding.
Give the form to the recipient to be mailed
in with his or her payment. Maintain a photocopy,
and if not paid in thirty (30) days, follow
up with a second request. If the amount
due is not paid after the second request,
submit an Application for Discharge from
Accountability to the Auditor-Controller,
as described in County
Accounting Procedure No. B.3. - Discharge
of Accountability for Collections. Do
not send a copy of the letterhead or other
form to the Auditor-Controller. Because
of the cost of processing, accounts less
than $25 are not recorded as accounts receivable
in the General Ledger.
2.4
Delinquent Invoices
The departmental/agency accounting unit
refers invoices that are not paid within thirty
(30) days to the Collections Unit. Collection
efforts, including mailing of collection letters,
telephone contact, skip-tracing procedures,
and filing court actions, are pursued by the
Collections Unit depending upon the amount
of the invoice.
Legal