BILLING FOR MATERIALS & SERVICES ON AUDITOR-CONTROLLER INVOICES
DEPARTMENTS & DISTRICTS AFFECTED:
ALL AGENCIES, DEPARTMENTS, AND DISTRICTS GOVERNED BY THE BOARD OF SUPERVISORS
12/8/83 REVISED: 01/02
_________________________________ David E. Sundstrom, Auditor-Controller
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.
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.
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.
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.
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.
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.
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.
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.
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.)
Special Invoice or Claim Forms
Invoice or claim forms required by the recipient or issued by the department/agency.
County of Orange Credit Memo Form No. 003 F8500-256 is a standard 4-part form available from PFRD Publishing Services. (See Exhibit II.)
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.)
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:
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):
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.
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 188.8.131.52.)
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:
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
Distribution of Invoices
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.
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.
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.
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.
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.
Correction of Invoiced Amounts
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:
Name and address of recipient.
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.
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.
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.
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.
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.
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.
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