References:

• HCO PL 29 Jan. 71 Rev. 27 Oct. 82 Finance Series 1R FLAG BANKING OFFICERS

The FBO collects the cash from Div III.

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 verifies what he has received.

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 gives a receipt for it.

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

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

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

He makes out a bank deposit slip.

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.

He goes to the bank and he deposits the money in his FBO No. 1 Account.

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

These must equal the same amount exactly.

Exec Council of the org passes on and finalizes its FP and hands it to the FBO who verifies it by production for himself.

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

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

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

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

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 and the Finance Enforcement Officer of the org are signatories on the FBO account. Where there is no Finance Enforcement Officer, the D/FBO or CO or ED are cosignatories.

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 has a second bank account (FBO No. 2) to which he transfers money for management expenses.

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

He transfers money from the first (FBO No. 1) account to SO (not org) reserves.

The FBO keeps an invoice-disbursements system on his No. 2 Account.

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

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

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.

The FBO keeps enough float in his No. 1 Account to cover bounced checks. Checks bounce ONLY on that account.

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!

The minute a check bounces or fails to clear, the FBO reports the drawer for false report and personally contacts him to establish whether the check should be represented or another check drawn.

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 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.

Div III collections have to do with collecting Qual credit invoices and advanced payments and any other credit advanced by the org.

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

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.

FINANCE OFFICE (org name) NO. 1 ACCOUNT. Signatories: FBO of the org and Finance Enforcement Officer of the org as well as international officers. No org officers except as needed in the absence of the Finance Enforcement Officer and D/FBO. Transfers only. Requires both signatories.

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.

FINANCE OFFICE (org name) NO. 2 ACCOUNT. Signatories: FBO of the org, Finance Enforcement Officer of the org and international officers. No org officers except as needed in the absence of the Finance Enforcement Officer and D/FBO. Management expenses, no org expenses. Requires both signatories.

The re-collected check is banked by the FBO.

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.

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.

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.

HCO BOOK ACCOUNT. Used as per policy. Any monies belonging to it collected by FBO, into his No. 1 Account and transferred to HCO Book Account by him. Usual org signatories and D/FBO who is the holder of the checkbooks.

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.

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.