6-7: Payment plans for receivables

Effective: July 1, 1998
Revised: July 2, 2026
References: Utah Code 63A-3-3, Admin Rule 21-1, 6-6: Past due receivables, 6-8: Write-offs and allowances

Purpose

This policy establishes requirements for the use of payment plans and defines when agencies may delay referral of past due receivables to the Office of State Debt Collection (OSDC).

Definitions

Agency – Any agency, board, bureau, commission, office, department, or other administrative subunit of the executive, legislative, and judicial branches of state government.

GovOps – The Department of Government Operations

OSDC – The Office of State Debt Collection.

Payment plan – A documented agreement between an agency and a customer that allows repayment of a receivable balance over time according to defined terms.

Performing payment plan – A payment plan in which payments are received as agreed and the customer remains in communication with the agency.

RE – Receivable transaction in Vantage Financial that debits receivable balance sheet accounts and credits either a revenue or an expenditure (for expenditure reimbursements), based on the coding block entered.

State finance – The GovOps Division of Finance.

Policy

A – Payment plans and delayed referral to OSDC are limited

1 – Agencies should refer past due receivables to OSDC when internal collection efforts are unsuccessful in compliance with state finance policy 6-6: Past due receivables.

2 – Agencies must not create payment plans as a routine collection practice. OSDC is responsible for long-term collection activities, including payment arrangements. Agencies should only use payment plans and delay referral of past due receivables to ODSC when they expect a timely collection of the receivable.

3 – Payment plans aren’t write-offs. Receivables under payment plans are still agency assets, and agencies must continue to evaluate them for collectibility in compliance with state finance policy 6-8: Write-offs and allowances.

B – Agencies may make payment plans

1 – Agencies may only make payment plans for past due receivables when allowed by applicable state or federal law, program requirements, and state finance policies.

2 – When creating payment plans, agencies must consider the:

total amount owed;
proposed payment schedule and duration;
customer’s payment history, reliability, and ability to pay;
the age of the receivable;
the likelihood that the payment plan will result in collection; and
any legal or contractual requirements.

3 – Agencies must require payments to be:

fixed;
periodic (usually monthly);
sufficient to significantly reduce the balance over the agreement’s term; and
reasonable, achievable, and structured for timely repayment.

3a – Agencies must not delay the total payment to a later date or set payments to be smaller periodic payments with larger payment amounts due at the end of the payment schedules.

3b – Agencies may set stricter terms, such as shorter deadlines or higher payments, for high-risk accounts or repeat late payers.

4 – Agencies must establish payment plans through written documentation that shows a mutual agreement between the agency and the customer. The documentation must identify the terms and provide evidence that both parties are aware of and acknowledge the payment plan. The documentation should include:

the total amount owed;
the effective date and duration;
the payment schedule and due dates;
the amount of each payment;
the consequences of missed or late payments (such as plan cancellation and OSDC referral);
authorized agency signature(s); and
the customer’s signature agreeing to the terms.

4a – Agencies must maintain documentation of the payment plan and any related communication with the customer and make it readily available for review or audit.

5 – Agencies must update the RE reason code on all accounting lines to “PPLAN” once they agree on a payment plan with a debtor and decide to handle the collection internally.

C – Agencies must monitor payments monthly and refer receivables when payment plans aren’t performing

1 – Agencies must monitor payment plans to ensure they receive payments as agreed.

2 – Agencies must document payment activity and any changes to the payment plan.

3 – Agencies must evaluate receivables under payment plans for collectibility in compliance with state finance policy 6-8: Write-offs and allowances.

4 – Agencies must refer receivables to OSDC when a payment plan isn’t performing, in compliance with state finance policies 6-6: Past due receivables and 6-8: Write-offs and allowance, including when:

payments are missed or not received as agreed;
the customer fails to respond to communication;
the payment plan fails to collect the total amount owed before it expires;
receivables not included in the payment plan continue to become delinquent; or
the agency determines that collection is no longer likely.

5 – Agencies must update the reason code of the RE to “OSDC-COL” if the payment plan is no longer performing or the receivable is referred to OSDC.

D –Agencies must document and oversee the implementation of payment plans

1 – Agencies must document the approval of payment plans, including the reason why the plan is appropriate.

2 – Agencies must ensure that approval, monitoring, and recording responsibilities for payment plans are appropriately separated.