Debt Management Policy

Debt Management Document No: D19-27499
Approval Date: 15/12/2020
Approved By: Council
Review Date: 15 September 2023
Responsible Officer: Director Customer & Corporate Services Version No 04
Authorising Officer: Chief Executive Officer

Introduction

Purpose

To outline the City's policy on the management and recovery of debt.


Scope

This policy applies to all staff and in particular employees authorised with the responsibility of providing credit, invoicing and recovery of outstanding debt including Rates, Special Rates & Charges, Municipal Charge, Waste Charges, Sundry Debtors, Interest, Fire Services Property Levy and miscellaneous charges.


Definitions

This section defines the key terms used in this policy.

  • Accounts Receivable, Credit Account, Sundry Debtors, Debt - all refer to an amount owed to City.
  • Debtor - any person, corporation, business or other entity owing money to the City.
  • Provision for Doubtful Debts - an estimate of the amount of debt raised that is unlikely to be collected.
  • Service – includes goods supplied or delivered, admission, sale of items, hire of facilities or items - supply of information and any other matter giving rise to a fee or charge being made by the City.

Policy

 The City will operate effective billing and debt collection processes including the efficient management of accounts receivable and related credit management.

The granting of credit and recovery of debts outstanding must be controlled from the timely raising of invoices and subsequent monitoring and collection of debt.

The City's debt is to be managed in accordance with this policy and where applicable the defined management procedures.

  • Debt Management - Infringements
  • Debt Management - Landfill
  • Debt Management - Rates
  • Debt Management - Recreational and Sporting Clubs
  • Debt Management - Special Rates and Charges
  • Debt Management - Sundry Debtors

Payment for council services should, where possible, be made at the time when the service is provided. For example entry fees, sales of merchandise, subscriptions, memberships, plans, licences and fees should be payable at the time of service and/or delivery.

Where credit is provided the following applies:

  • Trading Terms

    Unless otherwise provided by legislation, trading terms are not to exceed 30 days net from date of invoice/statement.

  • Invoices

    The debt is to be recognised at the time services are provided.

  • Provision of Credit

    The provision of credit is not automatic and credit can be suspended or withdrawn based on compliance with trading terms.

    A Credit Application form may need to be completed in accordance with the Debt Management – Sundry Debtors procedure.

  • Credit Limits

    Credit limits will be applied to larger accounts in accordance with sundry debtor procedures in consultation with the business unit.

  • Recovery of Outstanding Debt

    Recovery processes will be implemented through the City's preferred supplier of debt collection  in accordance with the service level agreement. No recovery action should commence without satisfactory proof of debt.

  • Waiver of Penalty Interest – Negotiated Settlements

    The City will consider Waiver of Penalty Interest on a case by case basis. The Chief Financial Officer or nominee as delegated officers, will negotiate the terms of settlement.

  • Payment Agreements

    Payment Agreements must be duly noted and authorised by a delegated officer. Defaulted agreements will activate enforcement.

  • Rates Assistance / Hardship

    Rates assistance includes the municipal rates concession, rates waiver and rates deferral where the criteria are met. Where a hardship application is made to the City, these measures may be made available to the ratepayer depending on individual circumstances.

    For Special Rates and Charges, pensioners and low income earners are given the opportunity to contact the City to discuss an alternative payment option that may be interest free depending on individual circumstances.

  • ‘Securing’ Unsecured Debt (Sundry Debtors)

    Depending on the circumstances the City will attempt to ‘secure’ unsecured debt via either obtaining directors guarantee (credit application), or other arrangement. If no security can be obtained, then proactive management of credit limit is expected.

  • Bankruptcy

    In general, the City will not declare itself as a creditor on bankruptcy applications to property based debts.

  • Provision for Doubtful Debts - Debt Write-off

    Provision for Doubtful Debts will be reviewed on an annual basis in accordance with Accounting Standards.

     Any debt recommended to be written off will be decided in accordance with approval by the Chief Financial Officer / Director of Customer & Corporate Services within financial delegations and not by local areas.

    Legal Counsel has authority to resolve settlement of legal issues resulting from litigation.

  • Reporting

    Debt Management reports are to be prepared on at least a quarterly basis and will be reviewed by the Audit Advisory Committee in conjunction with management.


Implementation

Records

Quality Records shall be retained for at least the period shown below.

Record Retention/Disposal Responsibility Retention Period Location
Requests to Raise Debt and Supporting Documents Business Unit 7 years Corporate Records
Invoices and Electronic Records Financial Services 7 Years Corporate Records

Review

This policy should be reviewed by 30 September 2023.


References

  • The City of Greater Geelong COVID19 Hardship Policy
  • Fire Services Property Levy Act 2012
  • Local Government Act 1989 (that is:Sec 172, Sec 180)
  • The City of Greater Geelong Annual Budget (including Fees& Charges, Rating Strategy)
  • The City of Greater Geelong Chief Executive Officer Delegations to Staff
  • The City of Greater Geelong Management Procedure – Debt Management - Infringements
  • The City of Greater Geelong Management Procedure – Debt Management – Landfill
  • The City of Greater Geelong Management Procedure – Debt Management - Rates
  • The City of Greater Geelong Management Procedure – Debt Management - Recreational and Sporting Clubs
  • The City of Greater Geelong Management Procedure – Debt Management – Special Rates and Charges
  • The City of Greater Geelong Management Procedure – Debt Management – Sundry Debtors
  • The City of Greater Geelong Council Policy Debt Management – Sale of Property
  • The City of Greater Geelong Service Level Agreement (T Debt Collector)
  • Penalty Interest Act 1983




Page last updated: Friday, 18 December 2020

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