Returned Checks

Process Overview

Student Fiscal Services' Responsibilities

Returned/Unpaid
Check Procedure

Departmental Responsibilities

Preparing Deposits

Handling of Checks Returned by Banks

Return Check Service Charge

Service Charge Waivers

Recovering Funds

Redeposit Replacement Funds Procedure

Process Overview

Checks returned by banks as unpaid will be handled as receivables, and are due and payable to the University of Washington. Some examples of these include:

• Non-sufficient funds
• Stop Payments
• Accounts Closed
• Refer to Maker

Student Fiscal Services' Responsibilities

Returned / Unpaid Check Procedure

The banks, currently US Bank and Bank of America, forward unpaid checks to the Student Fiscal Services Office for processing. Student Fiscal Services identifies the department and budget number where the check was deposited.

The check amount is recharged (debited) to the originating budget number via a journal voucher generated by either Accounting Operations or the Student Fiscal Services Office, depending upon the check type. A letter will then be forwarded to your department by the Student Fiscal Services Office, along with the returned check informing you of the returned check and procedures that your office should follow.

Departmental Responsibilities

Preparing Deposits

When preparing deposits, your department should always include your department name and budget number in the endorsement on the back of the check. If a budget number is not clearly indicated on the check, the recharged amount will be applied to a general budget number for your department.

Handling of Checks Returned by Banks

When services and/or goods have been provided, the money is owed to the University and must be collected, along with the additional $25 service charge. If no service and/or goods have been provided and your department elects not to recover the amount of the check, the $25 service charge should still be collected.

When you are notified that a check has been returned as unpaid, you must follow the following procedure. In addition, you must maintain the returned check in the records of your department.

Return Check Service Charge

The return item fee to the customer is $25 per item. When a customer incurs this fee, the departmental budget is automatically debited $13 for each returned item. When the $25 fee is collected from the customer, your department will deposit the full amount into your budget, keeping the extra $12 for your staff time in handling these checks. The $13 debit covers banking and handling costs incurred by the University.

If you find that the return item fee should not have been assessed to the customer, Student Fiscal Services can adjust or credit your departmental budget. For additional information or questions, please contact Shannon Corcoran at 221-5972 or by email at shancor@u.washington.edu

Service Charge Waivers

Your department may elect to waive the return item charge if the check is returned as result of one of the following:

• Bank error - a written explanation from the bank must be provided.
• Departmental error (e.g., the check was held too long before being deposited) - written documentation must be provided.
• Fraud or stolen check - a police report must be on file.

All fee waivers must be documented and retained by your department.

Recovering Funds

Your department may choose to recover the amount of an unpaid check by contacting the payer directly to request replacement payment (preferably in the form of cash or money order) plus an additional $25 service charge.

If your department chooses not to undertake the collection process internally or if the initial attempts at collection are unsuccessful, your department should submit an invoice (form UoW 1531) to the payer using Invoice Receivables procedures.

This invoice should specify the original budget number, department name, and amount of the check being replaced. In addition, add a second line, also using the original budget number, and add a $25 return item charge. This will reimburse your budget for the $13 that has been charged.

The invoice will be processed according to standard University collection procedures.

Note: Invoices previously billed through Invoice Receivables are not reinstated. A new invoice must be created which references the old invoice number, and the $25 service charge must be added to the original amount as described above. The original invoice must be cancelled, with the reason that it is being reissued.

Redeposit Replacement Funds Procedure

If your department receives replacement funds as a result of direct contact with the payer, the funds should be deposited according to standard departmental procedures. If replacement funds are received as a result of a processed invoice, the payment must be deposited by Invoice Receivables.