SGA to lose $35,000 due to bad debt charge 

SGA recently lost $35,000 of their budget for the 2023-24 fiscal year due to a bad debt charge. 

Assistant vice chancellor of accounting Xochil Herrera explained that bad debt is an amount of money that is lost because the expected amount of tuition and fees students pay was not met. She also said the expenditure is not technically a net loss for SGA. 

Herrera said SGA received a credit of $46,434 to their account in fiscal year 2023 and a charge of $36,622.72 to their account in FY 24. 

“The credit received in 2023 was out of the ordinary, SGA would normally expect a charge rather than a credit, but you can also notice that between the two years SGA still has a net credit to their bad debt expense,” Herrera said. 

The net credit means SGA received more money in FY 23 than they lost in FY 24, so within the bad debt expenditure, they have netted a gain. Although the amount of money being withdrawn for FY 24 is considerable, it is still less than what was given to them for FY 23.  

UCCS calculates bad debt on a quarterly basis by estimating what is uncollectable in terms of tuition and fees. Herrera said the allowance for bad debt is currently in alignment with the receivables, the amount of money SGA is expected to receive in tuition and fees, for the first quarter of 2024. 

Every department has an analysis ran on them to see if any of their fee revenue is uncollected, which can cause their expenses to fluctuate across the fiscal year if those estimates change.  

Since bad debt is based off an estimate, money is pulled from departments using a reserve system to set aside money that is believed to be uncollectable.  

“We make these adjustments quarterly, and we set this aside so they will see a bad debt expense show up and it’ll change, it’ll increase, it’ll decrease as their receivables changes,” Herrera said.  

Increases may happen when more students pay the tuition and fees than initially expected, providing more money to be utilized by different departments. Decreases may happen due to being unable to collect the expected amount of tuition and fees that would be sustainable. 

Already experiencing significant concern over being able to fund clubs, organizations and events for the 2023-24 school year, SGA officials have shown some concern over this loss at senate meetings.  

Although SGA is at a net credit when it comes to their bad debt expenditure, the loss of $35,000 is still leaving a significant impact on their budget for the year. This single charge for FY 2024 has already left an impact on their decisionmaking. 

Senator of the Arts Micah Vacco spoke briefly on bad debt in their decision on voting to increase the Student Activity Fee Consumer Price Index adjustment rate.  

“I guess especially too with the bad debt and other things we have going on, an increase is not going to be the worst thing. It is definitely not something that I think any of us would want to do, but would be good for a future thing for SGA,” Vacco said. 

SGA is among the departments being affected by the campus debt problem, and other departments are facing budget cuts to mitigate this issue. Photo by Megan Moen.