The FBO collects the cash from Div III.

He verifies what he has received.

He gives a receipt for it.

He writes it all down in his records, making a total list of what the monies are.

This policy letter outlines the exact handling of bounced checks including FBO actions as would be required in connection with HCO PL 29 Jan. 1971R, FLAG BANKING OFFICERS and HCO PL 17 Feb. 7IRA, BASIC FBO DUTIES.

He makes out a bank deposit slip.

It is a duty of the FBO to safeguard incoming monies and to ensure that all income is properly and legibly invoiced by the org and that the exact same amount is collected and receipted and banked by himself each day.

He goes to the bank and he deposits the money in his (Company) No. 1 account.

FBO records must therefore agree with and verify those of Div 3 always.

All daily income collections are thoroughly checked by the FBO before issue of any invoice of receipt.

Div III of the org passes on and finalizes its FP and hands it via Bu III to the FBO who verifies it by production for himself.

He carefully checks the tape total of the day’s income against org invoices. He checks the invoices for admin correctness and legibility. He ensures that all copies of any voided invoices are stapled to the in-series copy.

The FBO writes a transfer cheque from his (Company No. 1) bank account and just transfers the FP amount to the org’s bank account (Main Account).

He then tape-totals the checks and counts the cash against invoice totals.

The org’s own officers are signatories on their own bank account.

These must equal the same amount exactly.

The FBO and the A/G of the org are signatories on the FBO account.

He inspects checks for correctness of date and endorsement and quickly obtains any needed corrections.

The FBO has a second bank account (Company No. 2) to which he transfers money for International Management expenses.

The FBO then issues his invoice to Dept 7, made to “Dir Income” or “Cashier” in the exact currency of receipt.

He transfers money from the first (Company No. 1) account to Management (not org) Reserves.

He ensures that his deposit slips equal the same amount as org invoice total and the amount of his receipt for the money.

The FBO keeps an Invoice-Disbursements system on his No. 2, Flag Expense, account.

All org income is then deposited to the Finance Office Account No. 1.Thus, any bounced checks are returned from the bank to the FBO.

The FBO never spends any money out of his No. 1 account. Money goes into it and is transferred out of it. Only transfer cheques are drawn on it (to Management Reserves or to Org Main Account).

The FBO receiving a bounced check from the bank debits it to the org with a

The FBO keeps enough float in his No. 1 account to cover bounced cheques. Cheques bounce ONLY on that account.

The minute a cheque bounces or fails to clear the FBO reports the drawer for false report and personally contacts him to establish whether the cheque should be re-presented or another cheque drawn.

MINUS INVOICE of the same number series on which he issues his invoices of daily collections from the org.

This transaction does not go through the org Div III and is not entered on the org’s books. The org is left in the position of the customer’s friend. It is the FBO who is the customer’s devil.

The org Dir Income or Cashier then at once writes his own MINUS INVOICE debiting the account of the person who presented the check. A copy is provided the FBO.

No Div III is ever touched, approached or harassed on bounced cheques by an FBO. It is an offense for him to do so.

This protects the org from delivering services which have not in fact been paid for. One org had on its books in excess of $20,000 which had bounced and remained uncollected but which still showed in the customers’ files as credits!

Div III Collections have to do with collecting Qual credit invoices and Advance Payments and any other credit advanced by the org.

The bounced check is now subject to immediate re-collection action by the FBO, who reports the drawer for FALSE REPORT and personally contacts him to obtain a new check or OK to redeposit.

Finance Banking Officer (International Management) Account No. 1. Signatories: FBO of the org and A/G of the org as well as International Officers. No org officers. Transfers only. Requires both signatories.

The FBO makes notes of all collection actions on a single sheet to which all other related papers are attached.

Finance Banking Officer (International Management) Admin Expense Account. Account No. 2. Signatories: FBO of the org, A/G of the org and International Officers. No org officers. Int Management Expenses, no org expenses. Requires both signatories.

When the FBO has secured collection on the check, he writes an invoice crediting the org, attaching a copy to his collection notes to indicate collection complete. These are then filed.

Org Main Account. Receives only monies transferred from FBO Account No. 1, never from Cashier. Usual org signatories. The allocation received from the FBO goes into this account. All Org Expenses, salaries, etc are paid from this account.

The org Dir Income or Cashier then at once writes his own CREDIT invoice showing “BOUNCED CHECK COLLECTED” and crediting the person’s org account.

Org Reserve Account. Receives any funds like building fund org is holding as reserves for the org as saved from allocations. Held by and signed on by the org officers.

The re-collected check is banked by the FBO.

HCO Book Account. Used as per Pol. Any monies belonging to it collected by FBO, into his No. 1 Account and transferred to HCO Book Account by him. Usual org signatories.

NO OTHER BANK ACCOUNTS.

Gross income as reported on OIC is the total of monies collected by the org and is unaffected by bounced checks or bounced check collections.

Minus invoices for bounced checks are NOT deducted from the weekly income total; and re-collected bounced checks, having already counted as income once, are not again counted.

[Note: See also HCO PL 4 December 1972R, Issue II (revised 24 January 1973), FBO & Treasury Financial Reports, which amends the above Policy Letter. A copy can be found in the 1973 Year Book.]

Div 3 weekly invoice tape total excludes any invoices for bounced checks or bounced checks collected.

The FBO’s weekly invoice tape total excludes any such invoices but a separate tape is made by the FBO for any bounced checks and a third for any such collected that week.

FBO deposit slips for checks being redeposited are made out separately and are so marked by the FBO to distinguish them from org income being banked.

Advance collections obtained from persons in the org on behalf of others were discovered in one org to be at the root of large numbers of bounced checks.

Services are often sold to family groups with one member paying for some or all of them.

This is not uncommon and is perfectly legitimate.

But beyond that, org personnel may not solicit payments from staff or public on behalf of others.

Orgs may not arrange for checks to be issued temporarily on behalf of another between public persons or with staff to obtain collections.

Occasionally a student or pc in the org offers payment for a friend. That’s fine.

But orgs may not solicit or suggest it. Not ever.

Advance collections are obtained by industrious collection from “hot prospects” and other potential customers.

The essence of it is selling the service, collecting the money from the customer and getting the service delivered. (Unused prepayments are subject to refund.)

Refunds and repayments of prepayments are not minus invoices but are paid by Dept 8.

A voucher copy debiting the customer’s account is placed in his accounts file.

Any monies required for such by the org must be obtained from the CVB Reserve Payment Account before payment from the org’s Main Account.

Refunds and repayments are handled per Scientology Policy Directive 28 July 1982, REFUND REPAYMENT CLAIMS.