Options for Salary Overpayment Invoiced Debt Remaining Unpaid

SCHOOLS

When a salary overpayment has been invoiced and first reminders and final demands to the individual have not resulted in payment, these are the considerations you need to make in conjunction with the Debt Policy:

Refer the Debt to Legal Services

  • All debts over £100 should be considered for referral to Legal unless a valid reason can be given.
  • Please ask your BSC administrator to complete a Legal Referral form for them to forward it to Legal Services
  • Current Legal costs are charged at £90 per hour
  • School costs of Legal will depend on whether you have a Traded Services Agreement with them. If you havesigned up to this agreementyou can get up to one hour free of charge.
  • Maximum Legal costs to incur can be discussed with Legal which can be assessedin proportion to the size of the overpayment debt. Debts can have county court judgements set against the debtor.
  • Further court costs may be incurred if the debt is referred to the courts but this would be asked first by Legal to the school before this happens. Please be aware these costs can be added to the individual’s debt and asked to be paid by them.
  • Any concerns or questions to Legal about a debt (even prior to official referral) can be directed to mailbox:

or call Clare Stacey (Legal Assistant) or Simon Thomason (Lawyer) in the Legal Litigation team on 01452 328718.

Write Off the Debt

  • Salary overpayment debts should only be considered for write off if all avenues of recovery have been exhaustedincluding using Legal Services if over £100. Valid reasons must be given else a write off may be rejected. See Appendix G(i) of GCC’s debt policy to ensure all avenues have been covered at this link:
  • A write off form must be completed electronically by the school. Ask your BSC administrator for assistance in completing history if necessary. The blank form can be found onschoolsnet at this link under:
  • Write offs at any level must be approved by the Headteacher (shown as budget manager on form) and Chair of Governors (shown as Director on form). An email showing this approval is acceptable as the electronic form does not need to be physically signed.
  • Authorisation must be seen within an email trail from the Headteacherand the Chair of Governors else the write off will be rejected.
  • Staffing debts over £100 will also be approved by the Strategic Finance Director. Strategic Finance will arrange this to happen when the completed form is received.
  • Please speak with your Finance person at your school (or your AFO if necessary for advice) to enter their financial recommendation on the form where it says Strategic Finance Recommendation.
  • Once a write off form is completed please pass to and copy in your BSC administrator
  • Once the write off form for over £100 is approved by the Strategic Finance Director they will be sent to the BSC Income Team for processingand removed from showing as outstanding on our Accounts Receivable system.
  • Debts under £100 although Legal cannot be usedmust still show a Finance recommendation.

Other considerations when making a decision

  • Note that sometimes it may be apparent that the individual has moved house after they left the authority and therefore a NAFN can be requested by the BSC administrator or Finance to the credit controller which can possibly find a more up to date address on the electoral roll. This can happen at any stage of the process but is mostly tried after the final demand has gone out. If anyone at the school has knowledge that the individual may have been planning to move then it would helpful for your BSC administrator to know this earlier in the process of debt collection.
  • A bad debt provision in the accounts will be considered by Strategic Finance between the 3 to 6 month period after non payment of the invoice. This will remove the income generated by the invoice raised on the school’s cost centre and 11770 GL account. It will only be returned to the budget if the individual eventually pays. The email from Strategic Finance will be sent to the school to tell you this has happened (copying in your BSC administrator and AFO for awareness).
  • Instalment levels when discussed with the individual for standing order set up that are for more than 12 months must be agreed with the Headteacher. The BSC administrator or Legal officer will regularly review the instalment level.
  • Ensure it has been explained to the debtor that while the debt may have arisen through no fault of their own, the money was paid by mistake and they’re not entitled to keep it.
  • If a debt is agreed for write off please remember that the gross payroll figures that were originally reversed to your cost centre will be reinstated on the individuals payroll record at a later date. This means the net pay overpayment that is beingwritten off will actually be slightly higher taking into consideration the additional reinstated cost of tax, National Insurance and pension contributions that would have been originally reimbursed to your budget on the assumption they would pay the debt back.
  • For any further guidance or questions please contact either your BSC administrator or the Debt Recovery inbox (shown above).

Date 14.12.16