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Accounting for Uncollectible Accounts (APS 027)

FPP C.001

Collectible or Uncollectible

The OAG’s Role

The OAG, as the agency responsible for providing legal services, creates the policies and procedures for the collection and litigation of past-due accounts.

Is It Uncollectible?

The agency or institution must follow the OAG’s collection procedures to collect any past due accounts owed the agency that may include contracting with an outside agent to collect the obligation per Government Code, Section 2107.003.

Only after the agency and the OAG have followed these procedures without success may a debt be classified as uncollectible and be written off on the agency’s financial accounting records. A debt is considered uncollectible if any of the following criteria are met:

  • The OAG determines that the debt is uncollectible.
  • The OAG determines that further measures to collect the debt are inappropriate.
  • Agency management determines that the debt is uncollectible, and the debt does not meet the agency tolerances approved by the OAG established pursuant to Texas Administrative Code, Section 59.2(b)(8), below which an obligation is not referred to the OAG for collection.

The Comptroller’s office requires that the reasons for writing off an account and compliance with the agency’s write-off policy be adequately documented and readily available for audit.