NO: 94-23-OMB

AGENCY: OFFICE OF MANAGEMENT & BUDGET

EFFECTIVE DATE: JULY 1, 1993

EXPIRATION DATE: INDEFINITE

SUPERSEDES: 85-11

SUBJECT: DISHONORED CHECKS

ATTENTION: CHIEF FISCAL OFFICERS

FOR INFORMATION CONTACT: JOHN DITRI
PHONE: 292-8938

It is the policy of the State of New Jersey that all checks
dishonored because of non-sufficient funds or uncollected funds are
to be automatically redeposited by the receiving bank.

It is also the policy of the State of New Jersey that State agencies
shall design cost effective collection systems for dishonored checks,
that is, the cost of collection should not exceed the amount
collected.

It is the policy of the State of New Jersey that individuals or
companies who have two checks dishonored within a two year period,
are to be considered repeat offenders. Repeat offenders will be
required to submit payments to the State of New Jersey only by
certified check, money order, bank cashier's check or electronic
funds transfer. Any regular checks received by the agency from such
repeat offenders shall be rejected without being deposited.
Individuals or companies will be removed from the repeat offenders
list two years after the last dishonored check was received by the
agency.

Agencies shall prepare procedures to collect funds based on the above
policy.

All agencies shall make an effort to notify payers of this change in
policy regarding dishonored checks.