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Business and Financial Policies and Procedures

10.4.2 Handle Returned Checks (Approved Units Only)

Policy Statement

A unit must first be a cash handling unit to be authorized to assume responsibility for returned check handling. This procedure does not apply if University Student Financial Services and Cashier Operations (USFSCO) handles the unit's returned checks.

Procedure

To handle checks returned to your unit:

USFSCO Business Operations

  1. Charges the originally credited C-FOAPAL for the amount of the check and sends a copy of the Journal Voucher, the unredeemed check, and a notification memo to the unit contact on file by campus mail.
  2. Makes available a monthly list of all returned checks, by payor, to all cash handling units to use as a guide before accepting future checks from companies or individuals on the list. Units should not accept checks from anyone on the list. Contact your campus USFSCO office to obtain the list.

Your Unit

  1. Transfer the amount of the unredeemed check from the original C-FOAPAL to your unit's General Ledger NSF Clearing Fund C-FOAPAL.
  2. Charge the $30 administrative fee to the Operating Ledger Administrative Fee Clearing Fund C-FOAPAL you provided on the Returned Check Handling form.
  3. Follow your unit's approved written internal procedures to recover the amount of the returned check and the $30 administrative service fee.
  4. Maintain monthly reconciliation of NSF Clearing Fund activities, and submit quarterly reconciliation reports to USFSCO Business Operations using the Sample Template as a guide.
  5. Submit the replacement funds, when recovered, to USFSCO Cashier Operations on either a Report of Cash Sales/Money Received form or one of the paper forms available on each campus. Keep a copy for your unit records. Use the NSF Clearing Fund C-FOAPAL, and the C-FOAPAL you charged in Step #1 and 2.
If you are unsuccessful in recovering the replacement funds within 6 months of occurrence, you may submit a special collection request to USFSCO Student Loans and Collections (312-413-0303 or pastdue@uillinois.edu). USFSCO may send it to an external collection agency for action. USFSCO will not accept requests that are older than 6 months.

Forms Used in this Procedure

Department Deposit
Paper forms:
    Report of Cash Sales (item #11485820) (available for purchase from the Urbana campus iStores)
    Report of Cash Receipts (available for purchase from the Chicago General Stores catalog)

Related Policies and Procedures

10.4.1 Obtain Approval to Handle Returned Checks
10.2.1 Accept Checks as Payment

Additional Resources

Quarterly Reconciliation Example
For a detailed outline of returned check procedures consult, Departmental Returned Check Handling Procedures Sample

Last Updated: October 21, 2011 | Approved: Senior Associate Vice President for Business and Finance | Effective: February 2008

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