KENTUCKY STATE UNIVERSITY Schedule of Findings and Responses, continued

Year ended June 30, 2012

Finding 12-01, continued:

Recommendation, continued:

• The implementation of formalized procedures for contacting delinquent accounts for payment, such as sending letters to slow-paying customers.
• The increased use of collection agencies and the department of revenue to aid in collecting delinquent accounts.

We recommend the University conduct an overall evaluation of the allowance for doubtful accounts at year end and base the allowance on the aging of the balance, instead of the last semester the student attended to ensure a more accurate balance in the allowance for doubtful accounts.

Management's Response:

We concur. The University has increased its collection efforts and has added three collection agencies to assist in collection efforts. We will increase our efforts to manage these agencies and rotate accounts with no collections activity. The student allowance account was increased substantially this fiscal year. We have also increased communication with the students to include monthly reminders of outstanding balances. Additionally, we have drafted a revision to the student accounts write-off method to expedite submission of delinquent accounts to collection agencies and decrease the timing of writing off student accounts.