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Bad Debt Write Off

Section: Fiscal
Index: B-13


This policy establishes the criteria and procedures to be followed to designate a receivable account as uncollectible and to remove such accounts from the general ledger account fund balance (e.g., writing the debt off).

Accounts receivables are eligible for write-off once they have been outstanding for two years.  To be considered for write-off, the University must be able to demonstrate that adequate steps were taken to collect the amount due. All accounts receivable to be written off must be approved by the UH System Board of Regents (BOR).  The University must compile a list of all such accounts receivable for submission to the BOR on an annual basis.


Debtor: Entity purchasing goods or services on credit (i.e., the buyer).

Creditor: Entity selling goods or services on credit (i.e., University department)

Account Receivable: An asset that represents a claim against another entity for goods or services that have been provided, but for which cash has not been received.

State Hold: When a debtor remains delinquent after in-house collection efforts at recovering the obligation have been unsuccessful, the University, as a state entity, is required to report to the State Comptroller the names of persons who have indebtedness or tax delinquency to the Comptroller. Reporting indebtedness to the Comptroller places the debtor “on hold” with all State of Texas agencies (including state universities) preventing any payments from the state to the debtor. See UHV Policy A-7, Reporting Indebtedness to the State Comptroller, for further information.


Departments with uncollected accounts receivable meeting the criteria for write-off will submit a list of individual accounts to be written-off and a current reconciliation of the department’s accounts receivable to the UHV Sr. Director of Finance at the end of each fiscal year. The department must have supported documentation for each individual account to be written-off available for review.

After approval has been obtained from the BOR, the UHV Sr. Director of Finance will inform the department and request recording of the write-off as follows:

The write-off of an uncollected account is a bookkeeping entry only and does not relieve the debtor of financial responsibility to the University. Although the uncollected account has been removed from the books, the uncollected amount is not forgiven. The University may still have a claim against the debtor and can still seek legal remedy (e.g., sue for collection in a court of law). Alternatively, the debtor can still pay on the account. Therefore, it is the responsibility of the University to maintain adequate records regarding financial obligations (i.e., debts) owed to the University.

Collection Procedures and Criteria for Write-Off

Bad Debt Reserve

At the end of each fiscal year, the UHV Sr. Director of Finance will estimate an allowance for bad debts for accounts receivable on student accounts. A bad debt reserve and bad debt expense will accordingly be recorded in the general ledger. As actual write-offs occur, they will be charged against the bad debt reserve. Subsequent collections of bad debts written off will be credited to the bad debt reserve.

Supporting Documents

  1. UH System Administration Memorandum 03.A.24, Extension of Credit by Universities



Signature Obtained 05/31/2023
Robert K. Glenn, Ph.D.

Next Review Date: May 2028 (5 years)
Origination: Finance Department