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1560 Managing Children’s Funds

CPS May 2016

DFPS contracts with a financial institution to provide electronic banking services for funds belonging to children in DFPS managing conservatorship. Children’s funds are managed using two types of bank accounts: Children’s Income Accounts (CIAs) and children’s savings accounts. CIAs do not earn interest.

Children’s Income Accounts

Children’s Income Accounts are regional checking accounts used to receive and disburse funds designated for children in DFPS custody.

Each region is assigned a single CIA into which DFPS accountants manage the deposit of monthly or lump-sum funds. Separate accountants manage the dispersal of these benefits on a child’s behalf.

Children’s Savings Accounts

A children’s savings account is an individual account assigned to a particular child in the custody of DFPS, but kept in a pooled account. These interest-bearing accounts receive and disburse funds only through CIAs (see 1563 Establishing, Transferring, and Closing Children’s Savings Accounts).

Communicating With GTFCU Personnel

Greater Texas Federal Credit Union (GTFCU) has established contact persons to call for instructions or questions. DFPS staff should contact these individuals for any issues or questions.

1561 Accounting Procedures for Children’s Funds

1561.1 Organization of the Accounting Unit

CPS May 2016

The Children’s Income Accounts (CIA) unit is maintained at state office under the direction of the Accounting department.

1561.2 Separation of Duties

CPS May 2016

Key duties and responsibilities in authorizing, executing, recording, and reviewing transactions must be kept separate among individuals in the accounting unit. Persons responsible for opening, receiving, and recording accounts receivable transactions must not be involved in the authorization and disbursement of Children’s Income Account (CIA) funds.

1561.3 Documentation

CPS May 2016

Accounting staff must use IMPACT as the only system of record to manage children’s income, produce checks, and reconcile accounts.

1561.4 Accounts Receivable (Income)

CPS May 2016

The Accounts Receivable (AR) accountant must record in IMPACT the date, amount, and source of all funds received on behalf of a child.

1561.5 Accounts Payable (Disbursements)

CPS May 2016

The Accounts Payable (AP) accountant must record in IMPACT the payee and specific purpose of all expenditures made from a child’s funds. The AP accountant must get a receipt for any expenditure not applied to the cost of the child’s care and must keep it as documentation for the disbursement.

1562 Managing Children’s Income Accounts (CIAs)

1562.1 General Information
1562.11 Electronic Access to Children’s Funds

CPS May 2016

Electronic access consists of financial accounts in the IMPACT system and the online banking system through Greater Texas Federal Credit Union. Authorized staff may approve and enter transactions, monitor accounts, and pay providers.

Granting New Employees Electronic Access to a CIA

When a new person is hired into a position requiring electronic access to a CIA, the team lead:

  •  completes the MAC form to add IMPACT rights for the new hire, including a request for the person to obtain access to CPS financial accounts; and

  •  routes the request to Accounting for approval.

Removing Electronic Access to a CIA When Employment Terminates

When a person leaves a position, the CIA team lead completes a MAC form to have the vacating person removed from access to IMPACT financials, and immediately changes the answers to the security questions on bank accounts.

If the vacating person will continue to help with children’s income until a replacement is found and trained, continued access is allowed.

1562.12 Receipt and Deposit of Children’s Income

CPS May 2016

All children’s funds are deposited into the regional CIA, and payments and withdrawals are made from this account. Whenever possible, funds should be received via direct deposit.

1562.13 When Funds Are Received

CPS May 2016

Accounting staff notify the SSI coordinator the first time funds for a child are received. The SSI coordinator verifies the type of funds and specifies if any of the funds are considered a lump sum payment (a payment of more than the current month’s benefit).

When recording lump sum payments the accountant lists the full amount in the transaction. In the Description, the accountant enters the monthly benefit amount and the amount that can be used for appropriate needs. The accountant transfers money other than the monthly benefit to savings.

1562.14 Cash Basis Accounting

CPS May 2016

Cash basis accounting is the method in which income is recorded when funds are received, and expenses are recorded when funds are paid out. Due to the nature of foster care maintenance payments, the cash basis is the preferred method of managing children’s income.

  •  All foster care and kinship payments made to the placement should be paid in the month following the receipt of funds. Children’s income consists mainly of Supplemental Security Income (SSI) and Retirement, Survivor, and Disability Insurance (RSDI), which are both Social Security Administration (SSA) benefits. DFPS is the representative payee for minor recipients while the recipient is in the managing conservatorship of DFPS.

  •  In order to determine the exact payment due to a provider, invoices are processed on the 3rd of the month following the month in which the care occurred. For example, foster care for the month of March is paid in April, using funds received in March. Foster care maintenance payments to contracted foster homes and facilities are determined on a per-day basis.

  •  Monthly CIA funds are mailed no later than the 15th of the month, or the previous business day should the 15th day of the month fall on a weekend or holiday, if there are no billing discrepancies associated with the funds being disbursed.

1562.15 IMPACT Financial Account Pages

CPS May 2016

The accounting team lead must ensure that all transactions related to receipt and disbursement of children’s funds are recorded in the IMPACT Financial Account Register in a timely fashion.

1562.16 Excess Funds

CPS May 2016

In most cases, the monthly SSI or RSDI payment is less than the amount of the child’s monthly cost of care. In some instances, a child has excess funds at the end of the month, excluding lump sum balances.

If there are any excess funds in a child’s account at the end of the month from regular monthly payments, funds are transferred into an existing savings account or, if the child does not already have a savings account, one is established for the child. The ending balance for each child’s checking account every month should be zero.

1562.2 Account Resource Limits for SSI Children

CPS May 2016

To be eligible or remain eligible for Supplemental Security Income (SSI) benefits, children receiving SSI cannot have resources in excess of $2,000. Resources include the child’s monthly benefit plus the balance of the child’s savings account. The monthly benefit is considered to be a resource in the month following its receipt.

Accounting staff monitor the resources for children receiving SSI to ensure they do not exceed the $2,000 limit. Using the CIA Balance Report, accountants monitor the balances in the children’s checking and savings accounts. When a child’s financial resources have reached or are within $10 of the resource limit, the accountant contacts the regional SSI coordinator. The SSI coordinator contacts the CPS caseworker to determine if the child has needs on which funds can be spent. If no needs are identified, the funds are spent on cost of care to keep the total amount of financial resources within the $2,000 limit.

1562.3 Adoptive Placement and Children’s Income

CPS May 2016

When a child receiving monthly SSI or RSDI benefits is placed into an adoptive placement, DFPS remains the representative payee for the child during the interim period between foster care and the adoption’s consummation. The monthly SSI or RSDI payment and any other payment approved to be used for the cost of care are paid to the adoptive placement in the month after receipt. See 1715.4 Supplemental Security Income (SSI) Payments and Adoption Assistance Payments.

1562.4 Handling Deceased Child’s Income

CPS May 2016

If the child dies while in DFPS conservatorship the team lead reconciles the financial records. If the child is receiving payments of any type the SSI coordinator notifies State Office accounting staff. State Office accounting staff returns payments to the payment source as follows:

  •  SSI payments represent payment for the month in which they are paid. Therefore, the child is entitled to a SSI benefit during the month the child dies. SSI funds received for months after the month of death are returned to SSA.

  •  RSDI payments represent payment for the month prior to the month in which they are received. RSDI payments are not owed for the month of death, even if the child dies on the last day of the month. Any payment received in the month in which the child dies or subsequent months are returned to SSA.

  •  VA payments are not owed for the month of death, even if the child dies on the last day of the month. Any payment received that covers the month in which the child dies or subsequent months is returned to the VA.

  •  For all other payment sources State Office Accounting staff contacts the payment source.

If any funds remain in the account, DFPS accounting staff takes the following actions:

  •  If the deceased child has siblings, including a half-brother or half-sister who are currently in DFPS conservatorship or in the Extended Foster Care Program, accounting staff notifies the regional attorney, as the attorney ad litem for the siblings of the deceased child may wish to file a Determination of Heirship action or other related proceeding on behalf of the siblings. If an action will not be filed on behalf of the siblings, the caseworker notifies the next of kin that DPFS will remit the funds to the State Comptroller’s Office.

  •  If the deceased child has no siblings in DFPS conservatorship or in the Extended Care Program, the caseworker notifies the next of kin that DFPS will remit the funds to the State Comptroller’s Office. Staff completes Form 1010 Report and Remit Property of Deceased Children to close out the child’s account so that DPFS can remit the funds to the comptroller’s office.

1563 Establishing, Transferring, and Closing Children’s Savings Accounts

CPS May 2016

The accounts receivable (AR) accountant establishes an individual savings account in IMPACT for a child when DFPS policy allows. Funds are transferred from the checking account into the pooled savings account. Any remaining balance in a child’s checking account at the end of the billing cycle is placed in a savings account. The savings account is at DFPS’s contracted bank. Interest earned by the account is prorated to individuals with a balance at the end of the reporting period.

1563.1 Transactions

CPS May 2016

All deposits and transfers involving a child’s savings account are only made from or to a regional CIA. Deposits and withdrawals of funds to or from savings are not allowed. Authorized transfers of funds to or from a CIA are made using the bank’s website or by requesting the transfer with bank personnel.

1563.2 Establishing a Child’s Savings Account

CPS May 2016

To establish a child’s savings account, funds are transferred electronically from the child’s checking account to the pooled regional savings account.

1563.3 Closing Accounts Timely

CPS May 2016

Monthly, the Accounts Receivable (AR) accountant uses the Termination Listing report on the IMPACT Financial Account page. The report identifies children with active accounts with a Legal Status of FPS Resp Terminated and Adoption Consummated. The report displays individual account balances for checking and/or savings accounts, current Legal Status, and date of dismissal from DFPS conservatorship. The AR accountant generates the report using a From date of 11/11/2014 (the first date accounting began entering GTFCU account information into IMPACT). The report is given to the Children’s Income Account team lead to be included as part of the bank reconciliation process.

1563.31 Children with a Legal Status of Resp Terminated

CPS May 2016

The Accounts Payable (AP) accountant:

1.   determines whether the child is in care at age 18 or older, or whether the child is no longer in a paid placement;

2.   notifies the SSI coordinator of:

a.   children still receiving SSA benefits once the child is out of paid care;

b.   children on runaway status;

c.   children in unauthorized placements;

d.   children in HCS placements; and

e.   children with the Dedicated Account box checked on the child’s financial page; and

3.   notifies the SSI coordinator by policy for all other funds.

1563.32 Children Receiving SSA Benefits and No Longer in Conservatorship or the Extended Care Program

CPS May 2016

The Accounts Payable (AP) accountant disburses all funds and closes the accounts in IMPACT. Checks are made payable to the Social Security Administration and given to the SSI coordinator for proper handling.

If the child has funds in a savings account, the AP accountant:

  •  transfers funds to the Children’s Income Account (CIA); and

  •  disburses funds from the checking account.

If funds are from SSI or RSDI benefits, the AP accountant:

  •  makes separate checks for each individual;

  •  makes each check payable to Social Security Administration;

  •  notes “Conserved Funds” on the check stub; and

  •  gives the checks to the SSI coordinator.

If funds are from other sources, the AP accountant returns the funds to each payment source.

1563.33 SSI Coordinator

CPS May 2016

For checks received from the Accounts Payable accountant, the SSI coordinator hand delivers or mails the checks with the appropriate documentation to the Social Security Administration.

The SSI coordinator forwards a copy of the receipt from SSA to Accounts Payable, to be filed in the child’s income folder.

When contacted by the Accounts Receivable accountant that a child with a Dedicated Account box checked has left care, the SSI coordinator contacts the state office SSI program specialist.

1564 Duties of Accounts Receivable (AR) Staff

CPS May 2016

Direct Deposit Forms

The AR accountant sends a Direct Deposit Form 4108 Vendor Direct Deposit / Advance Payment Notification Authorization to payees.

The AR accountant sends an e-mail to the providers to inform them of transactions into their bank account for foster care payments using children’s income.

The AR accountant forwards the completed Form 4108 Vendor Direct Deposit / Advance Payment Notification Authorization to Accounting so the form can be entered in the comptroller system (USAS). On direct deposit forms:

  •  original signatures are not required. A faxed or scanned and e-mailed copy is acceptable; and

  •  the Financial Institution section of the form needs to be completed. It is recommended, but not required, that a financial institution representative complete this section to prevent delay should incorrect information be submitted by the provider.

1564.1 Manual Receipt of Funds by Accounts Receivable (AR) Staff

CPS May 2016

When a check is received in the mail, the Accounts Receivable (AR) accountant:

  •  writes on the back of the check: DFPS Account # (enter regional checking account number); and

  •  completes a bank deposit slip, makes a copy of the check and deposit slip and gives the copies to the team lead.

The team lead:

  •  makes the deposit into the checking account no later than three business days after receipt;

  •  tapes the deposit receipt to the copy of the check. This is part of the bank reconciliation; and

  •  enters the deposit in IMPACT using the date the deposit was entered into the bank.

The Accounting Unit staff does not accept cash. If cash is offered for a deposit, accounting staff requests this be put on a money order for the child. When the money order is received, Accounting Unit staff proceed with the steps above.

1564.11 Checks Payable to Person Versus DFPS

CPS May 2016

Accounts Receivable staff send back to the Social Security Administration (SSA) any checks received that are made payable to a parent for a child. The checks cannot be deposited into a CIA.

In some instances, checks are made payable to a young adult who is 18 years old or older and who has signed an agreement to stay in the care of DFPS.

Accounts Receivable staff contacts the SSI coordinator to see if a copy of a signed Voluntary Extended Foster Care Agreement (VEFCA) or Return to Foster Care Agreement (VRFCA) has been received.

  •  If there is no signed document, the SSI coordinator needs to contact the caseworker to see if the youth has agreed to remain in DFPS care.

  •  If there is a signed document, the Accounts Receivable staff:

  •  requests a copy of the document from the SSI coordinator for the young adult’s financial folder;

  •  sends a letter to the young adult or the provider with the check explaining the following process. The young adult must endorse the check and return it to the CIA office; and

  •  sends addressed prepaid envelopes with the letter to be used when returning endorsed checks.

When the CIA office receives the endorsed check, Accounts Receivable staff follows the above process for Manual Receipt of Funds by Accounts Receivable Staff.

Funds are to be used for cost of care.

If there are excess funds, the young adult can obtain them at any time, working through his or her caseworker.

  •  Excess funds can be used as approved by the caseworker and supervisor.

  •  Excess funds can be placed in a savings account to earn interest for the young adult.

1564.2 Receivables Procedures for Accounts Receivable (AR) Staff

CPS May 2016

Unless noted otherwise, each month the Accounts Receivable accountant performs the following functions. The AR accountant:

  •  identifies new benefits and reports those to the SSI coordinator;

  •  records deposits in the child’s Financial Account Register in IMPACT;

  •  checks the Dedicated Account box to indicate when a dedicated account has been set up for the child;

  •  unchecks the Dedicated Account box when the account has been closed (information on both setting up and closing dedicated accounts comes from the SSI coordinator or Federal and State Support staff);

  •  establishes a savings account for a child when allowed by policy (see 1563 Establishing, Transferring, and Closing Children’s Savings Accounts); and

  •   records the account in the Financial Account page.

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