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1565 Duties of Accounts Payable (AP) Staff

CPS May 2016

The persons involved in the authorization and disbursements (Accounts Payable) of Children’s Income Account funds are not involved with accounts receivable functions for the same regional account. Each month, the accounts payable (AP) accountant:

  •  completes a verification process for each child using the Monthly Income and Placement Report from IMPACT to determine the appropriate disbursement of income based on DFPS policy. Information on the report includes:

  •  the child’s placements during the service month, to determine if the child was in a paid placement or other type of placement. (Examples of other placements include unpaid licensed care, relative placement, pre-consummative adoptive home, own home, long-term medical facility, detention facility, or unauthorized absence. DFPS policy provides guidelines for disbursement of children’s income in these situations.); and

  •  the child’s legal status, to determine if DFPS maintained legal custody of the child during the service month and was responsible for receipt and disbursement of funds.

1565.1 New Benefit Award

CPS May 2016

When a new benefit is awarded, the SSI coordinator notifies the AP accountant and forwards a copy of the award letter that identifies the child.

For each child receiving any type of income, the AP accountant prepares a Child’s Income folder by writing the child’s name on the tab of the folder. Items to be kept in the Child’s Income folder include:

  •  Social Security Administration (SSA) award letter;

  •  lump sum distribution list;

  •  copies of Representative Payee Reports;

  •  receipts from SSA lump sum payments made; and

  •  documentation that affects the balance of the account outside the normal parameters (normal parameters are deposits and checks for cost of care, or checks redirected to a caregiver).

When a child’s income account is closed and all funds are returned as specified in policy, follow the retention schedule (see 1567 Records Retention Requirements for Transactions Involving Children’s Funds).

1565.2 Stop Payments

CPS May 2016

The AP accountant initiates Stop Payment procedures when a payment needs to be cancelled. The accountant completes the Stop Payment form, giving account number and check number, and sends the form to the Accounting manager for signature and forwarding to Greater Texas Federal Credit Union for processing. If the bank receives the check up to six months from the time of the stop payment, the funds will not be withdrawn from the account.

There are two reasons for a stop payment:

  •  the payment was sent in error, or

  •  an un-cashed check needs to be replaced no sooner than two weeks after the date of issue.

1565.3 Handling Income When Child is in Paid Substitute Care

CPS May 2016

The Accounts Payable (AP) accountant sends information to the foster care billing coordinator of income to be applied towards cost of care for children on monthly invoices.

1.   The foster care billing coordinator returns the income list with the invoice numbers annotated where the child’s income was applied.

2.   The AP accountant initiates disbursement for cost of care from CIA by sending the list of paid items to the team lead.

a.   The AP accountant does not create subsequent payments for invoices containing rejections after validation (VWI) until the rejections have been corrected in IMPACT and the invoice can be submitted for payment.

b.   The AP accountant notifies the team lead of invoices that continue to have rejected line items so that the correction process can be elevated.

3.   The team lead processes the report using an Access query so that a report can be generated to process through the state comptroller system. The team lead notifies the AP of the amount of the check, which should coincide with the AP’s list of paid items.

4.   The team lead sends a consolidated file of all payments to State Office Accounting to process.

5.   The AP accountants present one check per region along with supporting documentation (an Excel spreadsheet with child-specific payment information) to the team lead for the amount of funds to be generated through the comptroller system. The team lead submits checks to authorized signatories. The checks are then deposited into the correct DFPS account for processing.

6.   The state comptroller will either produce checks or issue electronic payments using an Automated Clearing House (ACH) transfer.

If the child is in more than one paid placement during the month, the AP accountant applies all income to the first placement up to the cost of care amount that was incurred in that placement. If there are funds left, the AP accountant applies them to the subsequent placement until the cost of care has been paid.

If the child is in a paid placement but then moves to a non-paid placement during the month, the AP accountant applies all income to the first placement up to the cost of care amount that was incurred in the paid placement. If there are funds left, the AP accountant determines their disbursement using the guidelines in 1565.4 Handling Income When Child is Not in Paid Substitute Care.

If there are excess funds after all cost of care has been paid and the child remains in DFPS managing conservatorship, funds can be placed into a savings account for the child. The AP accountant requests that the AR accountant transfer funds to a child’s savings account or establish a new savings account from the CIA. The AR accountant then records the transfer on the Financial Account Register in IMPACT.

1565.4 Handling Income When Child is Not in Paid Substitute Care

CPS May 2016

When DFPS maintains managing conservatorship and the child is not in a paid placement, funds are handled based on the placement circumstances. If the funds involved are Supplemental Security Income (SSI) or Retirement, Survivor or Disability Insurance (RSDI), the SSI coordinator is notified and the funds are managed as directed.

Type of Placement

How the Funds Are Managed

the child’s own home

The AP accountant does not maintain funds through the CIA.

unpaid licensed care

The AP accountant contacts the SSI coordinator to determine handling of SSI benefits. All other funds are placed into a savings account.

long-term medical facility

The AP accountant contacts the SSI coordinator to determine handling of SSI benefits. SSA may reduce SSI benefits to a spending allowance amount once SSA is contacted about a new placement type. The reduced payment is forwarded to the medical facility if the facility has the capability to keep funds for the child.

detention facility

The AP accountant contacts the SSI coordinator to determine handling of SSI or RSDI benefits. All other funds are placed into a savings account.

HCS placement

The AP accountant does not maintain funds through the CIA.

unauthorized placement

The AP accountant contacts the SSI coordinator to determine handling of SSI or RSDI benefits. If the unauthorized placement is a parent, the AP accountant does not maintain funds through the CIA. All other funds are placed into a savings account.

relative placement

The AP accountant maintains SSI, RSDI and other funds that are appropriate to be used for cost of care in the CIA and forwards them to the relative caring for the child.

adoptive placement

The AP accountant maintains SSI, RSDI and other funds that are appropriate to be used for cost of care in the CIA in most cases and forwards them to the adoptive placement.

Exception: If the adoptive placement is receiving Adoption Assistance (AA) and the child receives SSI, the AP accountant returns funds to SSA. An adoptive placement cannot receive both the child’s SSI benefit and AA. The AP accountant can forward RSDI to the adoptive placement receiving AA.

adoption consummated

The AP accountant does not maintain funds through the CIA. The AP accountant handles funds received in the month the child’s adoption is consummated as if the child were in an adoptive placement. The AP accountant forwards funds to the adoptive parent. The AP Accountant returns to SSA funds received in the month after the adoption is consummated.

There may be special circumstances that would require actions other than the ones listed above.

1565.5 Accounts Payable (AP) Staff Duties Regarding Lump Sum Distribution

CPS May 2016

When the Accounts Receivable (AR) accountant receives a lump sum payment for a child receiving SSI benefits, the AR accountant contacts the SSI Coordinator for information. If the lump sum is for SSI benefits, the funds are to be spent down nine months from receipt of the lump sum, which is the period prior to the funds counting as resources under federal law. Staff follows the procedures below:

1.   Within 30 days of notice of the lump sum payment, the SSI coordinator:

  •  works with appropriate regional staff to identify appropriate needs for the child, which can include items or services that can improve the child’s daily living conditions;

  •  gets cost estimates for the items;

  •  gets approvals for the items; (see 1580 Managing a Supplemental Security Income (SSI) Lump Sum or Retirement, Survivors, and Disability Insurance (RSDI) Lump Sum for a Child Receiving SSI); and

  •  submits the completed Form 8107 Lump Sum Distribution Checklist Appendix to AP staff.

      The AP accountant issues a check to the CPS caseworker to purchase the approved items made payable to the business where items are to be purchased. Checks are not made payable to caseworkers. The caseworker must make expenditures for appropriate needs within 30 days of receiving the check. The caseworker sends copies of receipts to the SSI coordinator and the AP accountant. The AP accountant must keep receipts in the child’s income folder for all expenditures other than cost of care.

2.   After appropriate needs are addressed, the SSI coordinator authorizes funds not to exceed $1,150.00 to be reserved for the child. The entire lump sum is placed in savings to accrue interest.

3.   The remaining balance after expenditures for appropriate needs have been made, and after a savings account of up to $1,150.00 has been reserved, is used for future cost of care up to nine months. Using the exact number of service days, the AP accountant calculates the cost of care minus the monthly benefit up to nine months from receipt of the lump sum. This is the amount of the lump sum benefit that will be applied to the child’s future cost of care.

      The AP accountant completes Form 8107 Lump Sum Distribution Checklist Appendix with these amounts, sends a copy of the form to the SSI coordinator and maintains a copy in the lump sum binder until the nine month grace period has expired. The AP accountant files the original form in the child’s financial folder.

4.   The AP accountant monitors all expenditures from the lump sum received. After six months, if the child’s remaining lump sum funds are over the $2,000 SSI resources limit, the AP accountant notifies SSI coordinator of the amount of funds left from the original lump sum which can still be used for appropriate needs. This helps to remind regional staff that, if the child needs an item or service that can improve the child’s daily living condition, there are funds to make this purchase.

5.   If SSA distributes the lump sum award in portions, the AP accountant must complete a form for each portion received. The nine month time frame begins from the date of the new deposit as each is received.

1565.6 Reconciliation Requirements for Accounts Payable (AP) Staff

CPS May 2016

Accounts Payable (AP) staff monitors the checking account balance on a daily basis whenever possible.

  •  Using the Regional Reconciliation Report, the AP accountant marks off outstanding items as processed through the bank, modifying the total as appropriate.

  •  The AP accountant takes appropriate action when anomalies are detected, such as bank charges or Social Security Administration (SSA) reclamation of payment.

  •  The AP accountant uses the Regional CIA Reconciliation Report, the CIA Balance report, and the bank statement, placing appropriate totals on the reconciliation template to show the information, as recorded in IMPACT, is reconciled to the bank statement. If there are any variances, the AP accountant records them on the template as an explanation.

Outstanding Items Procedures

When a check or deposit reaches the 90th day from the issue date without being reconciled (it has not processed through the bank), the AP accountant voids the item and makes a stop payment with Greater Texas Federal Credit Union.

The AP accountant:

  •  runs the CIA Account Balance report using the ending date of the bank statement (last day of the month). The total of the checking account column should equal the reconciled bank statement balance;

  •  ensures there are no children with resources exceeding the Social Security Administration’s resource limit for SSI recipients. If a child’s funds exceed the resource limit, notate the finding on the report and inform the SSI coordinator; and

  •  presents the reconciliation package to the team lead for signature. The reconciliation package should consist of the monthly bank statement, the Regional CIA Reconciliation report, the CIA Account Balances report, and the reconciliation template.

1566 Duties of Accounting Team Lead

CPS May 2016

The accounting team lead is responsible for the accuracy of the accounting process. The team lead has four primary functions:

  •  reviewing reports and other information,

  •  approving staff work,

  •  reconciling the bank statements, and

  •  preparing reports.

The team lead ensures check stock is kept in a secured area and is ordered as necessary. Access is restricted to accounts payable staff.

1566.1 Procedures for Reviewing Information and Reports

CPS May 2016

Each month, unless otherwise noted, the accounting team lead:

  •  ensures that all manual checks are deposited into the bank within three days of receipt;

  •  reviews documentation of the bank account reconciliation submitted by the AR accountant at mid-month and at the end of the month;

  •  monitors Prior-Period Adjustments and adjusting entries; and

  •  prepares payment information into the required format to process through the state comptroller system.

1566.2 Reconciliation Responsibilities of Accounting Team Lead

CPS May 2016

As part of the monthly bank reconciliation, the team lead:

  •  reviews uncleared items that are on the Regional CIA Reconciliation Report;

  •  verifies that the ending balance of the bank statement, after the subtraction of uncleared items, agrees with the account balance in IMPACT;

  •  uses the Termination Listing Report generated in IMPACT to ensure all accounts have been closed for children who are no longer in DFPS managing conservatorship;

  •  accounts for all adjusting entries made during the month;

  •  accounts for any negative items listed;

  •  tracks the check numbers used;

  •  accounts for all voided checks;

  •  checks balances of accounts with SSI benefits, using the CIA Balance Report, to ensure funds are not lost due to passing deadlines.

As part of the monthly bank reconciliation process, the team lead:

  •  reviews outstanding items listed on the reconciled bank statement and instructs any items over 90 days old to be voided;

  •  signs and dates the reconciliation report to serve as the review and approval of the reconciliation; and

  •  ensures the approved reconciliation documentation is kept for five years after the end of the current fiscal year.

1566.3 Annual Reconciliation for Each Client

CPS May 2016

As part of the process of preparing or approving the SSA Representative Payee Report, the SSI coordinator conducts an annual reconciliation of the child’s revenue and expenditures using the Child’s Transaction Report in IMPACT on the Financial Account Register. A copy of the report is sent to the AR accountant who tracks the reconciliations on the Delinquent Reconciliations Report, an Excel spreadsheet.

If any child is listed with a status of Overdue, the SSI coordinator is notified.

If there are transactions for children who receive funds other than SSA benefits, there is no Representative Payee Report. Each January, the team lead conducts a reconciliation for any clients for whom DFPS has not completed a Representative Payee Report in the last 12 months.

1566.4 Reconciling Child’s Income at Discharge

CPS May 2016

When a child is discharged from DFPS managing conservatorship, the team lead ensures the accurate reconciliation of the child’s income and expenses using information from:

  •  the child’s Transaction Report in IMPACT, to reconcile all revenues and expenditures;

  •  the CIA Balance Report, to determine the current balance, the existence of a savings account, or the existence or absence of the Dedicated Account indicator.

The team lead must also ensure that there are no unpaid expenses for the child.

The AR accountant is responsible for having all of the child’s accounts closed by the end of the following month after the child is discharged from care. Accounts cannot be changed from Active to Closed until all items have been reconciled.

Once the discharge reconciliation is completed, the AR accountant transfers the savings account closing balance to the Child’s Income Account (CIA). If funds in the savings account originated from Supplemental Security Income (SSI) or Retirement, Survivor, or Disability Insurance (RSDI), the funds are returned to the Social Security Administration. The child’s Social Security number is listed on the check along with biological name, if appropriate. The term Conserved Funds is noted on the check if the funds were held in a savings account. The term is not included if the funds are monthly benefits returned to SSA.

If the child has a dedicated account that must be closed, the AR accountant contacts the SSI coordinator. The SSI coordinator follows the CPS policy in 1577 Establishing a Dedicated Account Using a Supplemental Security Income (SSI) Lump Sum.

The accounting team lead requires accounting staff to confer with the foster care billing coordinator and the SSI coordinator to ensure all pending payments for past, current, or future foster care expenses are processed before closing the child’s accounts.

1566.5 Reconciling Discrepancies

CPS May 2016

The team lead investigates any discrepancy uncovered during the reconciliation review. The records in question are researched to resolve problems and correct errors. In the case of potential fraud, the team lead consults with the second-line supervisor to determine an appropriate course of action.

SSA Reclamations

It is policy to send a check to the Social Security Administration (SSA) to return funds for a child who is no longer in DFPS managing conservatorship.

In some cases, before SSA receives the check, SSA may send an Indemnity Letter to Greater Texas Federal Credit Union, causing the funds to be withdrawn from the Children’s Income Account. If DFPS has already sent the check to SSA, a double payment has been made, resulting in a negative balance in the child’s account. Accounting staff takes the following actions, as appropriate:

If the check has not processed through the bank, the accounts payable (AP) accountant:

  •  places a stop payment on the check; and

  •  lists the check as Void in IMPACT.

The check must not be shown as reconciled in IMPACT until the time of reconciliation when the next month’s bank statement is received.

If the check has already processed through the bank, the AP accountant contacts Greater Texas Federal Credit Union (GTFCU) and requests:

  •  a copy of the indemnity letter from SSA requesting that the funds be returned; and

  •  a letter from GTFCU stating exactly what transpired with the withdrawal of funds for the CIA.

When the child has been identified, the AR accountant locates the receipt letter from SSA that states: You should keep this receipt as proof that you made this payment. The receipt is kept in the Child’s Income folder. The accountant:

  •  makes a copy of the receipt letter;

  •  prints a front-and-back copy of the cancelled check;

  •  makes a copy of the bank statement page where the withdrawal was made and carefully circles the entire transaction;

  •  makes a copy of the bank statement page where the original deposit was made, and carefully circles the entire transaction;

  •  writes a brief synopsis of the events, including dates;

  •  consolidates all information into a packet. The packet should include these seven items:

  •  Synopsis of events

  •  Indemnity Letter from SSA to GTFCU

  •  GTFCU letter to region

  •  Receipt letter from SSA

  •  Copy of the check, front and back

  •  Copy of the bank statement page withdrawal

  •  Copy of the bank statement page deposit

  •  scans and e-mails all documentation to the SSI coordinator, to be taken to the local SSA office.

When funds have been recovered from the US Treasury to recoup the double payment, the accountant enters the transaction as a deposit. This brings the child’s account balance to zero. The AR accountant closes the account.

1567 Records Retention Requirements for Transactions Involving Children’s Funds

CPS May 2016

General accounting records in this program, such as banking records, accounts receivable, and accounts payable, are retained for five years after the end of the fiscal year and then destroyed. See the Child Protective Services section of the Records Retention Schedule. All other DFPS accounting records are included in the Finance, Accounting section of the retention schedule.

The regional accounting unit retains:

  •  all check stubs for five fiscal years plus the current fiscal year, as stated in the Retention Schedule, 07 Child Protective Services, item number 3209; and

  •  reconciliation documentation for five years after the end of the fiscal year.

1568 Child Support Payments

CPS May 2016

By law, when a child is placed in substitute care any support rights attributable to the child are assigned to the state as of the date the child is placed in care.

42 U.S.C.§671(a)(17)

Texas Family Code §264.109

1568.1 Request and Court Order for Child Support

CPS May 2016

DFPS will request a court order for child support unless parental rights have been terminated. See 5351 Requesting Child Support From the Parents of Children in DFPS Conservatorship. Courts are required to order child support for a parent that is financially able to make the payments in cases where DFPS is appointed permanent managing conservator and the parent’s parental rights have not been terminated. Courts have the discretion to order child support in cases where DFPS is appointed temporary managing conservator and also in DFPS cases where parental rights have been terminated.

Texas Family Code §154.001

40 TAC 700.1108(a)

1568.2 Enforcement of Child Support Court Orders

CPS May 2016

Once the court issues the order, DFPS begins to receive support payments for the support obligation due while the child is in foster care. The Office of the Attorney General (OAG), Child Support Division is responsible for enforcing the court-issued child support order. OAG sends DFPS funds collected for:

  •  monthly payments; or

  •  arrears (funds due from past months).

However, DFPS does not receive any collected child support that was due before CPS was appointed managing conservator.

1568.3 Distribution of Child Support Funds When the Child is in DFPS Conservatorship

CPS May 2016

Monthly Payments

When OAG sends funds collected for the monthly support obligation, DFPS applies the amount received to the child’s cost of care when the child is in a DFPS paid placement. If the amount received for the month is more than the cost of care, DFPS conserves the remaining to be used in the child’s best interest. For children in unpaid relative or fictive kin placements, funds received for the monthly payment are passed to the caretaker to use for the child’s care.

At times, despite DFPS’s input or objection, a court will determine that a child should stay in an unauthorized placement (for example, when a relative cannot obtain an approved home study). In these circumstances DFPS pays the monthly child support to the placement only if the court issues an order for DFPS to pay.

Conserved Funds

If the child is in a placement that is not paid by DFPS (for example, a hospital, independent living arrangement, or juvenile setting), DFPS uses the money received from OAG to pay for services or items the child needs, or conserves the funds for later use that is in the child’s best interest.

Arrears

When DFPS receives funds owed for previous months that the child was in foster care (which are termed “arrears”), DFPS applies the amount received from OAG to the child’s most recent placement, and then to each immediate previous placement. However, when the child was in a DFPS non-paid placement before being placed in paid foster care, DFPS ensures the caretaker is paid the monthly support obligation before DFPS. This helps to promote caregiver placements. If any funds remain, DFPS conserves the funds to use in the child’s best interest.

Best Interest

Staff determines the child’s best interest in consultation with the DFPS regional attorney and taking into consideration the child’s current and foreseeable needs.

If staff can purchase the item or service with other funds, staff should not use the excess funds. Staff can use conserved funds for hobbies, extracurricular activities, and normalcy events.

DFPS Accounting staff sends regions a quarterly report of the children and youth that have excess and conserved funds from child support payments, and the amount. This report alerts caseworkers that the child has funds that can be used for the child’s best interest.

1568.4 Excess Funds for Title IV-E Cases

CPS May 2016

Excess funds are rare but occur when the monthly support collected is more than the child’s foster care maintenance payment for the month, but not more than the monthly support obligation ordered by the court (known as current month excess). Excess funds can also occur when the federal and state government has been fully reimbursed and there are remaining funds (known as second excess collection). The OAG, Child Support Division (not DFPS) determines both types of excess funds. Excess funds are used for services and items that serve the child’s best interest.

45 C.F.R.§302.52(b)(2) and (b)(3)

Staff determines the child’s best interest in consultation with the DFPS regional attorney and taking into consideration the child’s current and foreseeable needs. If staff can purchase the item or service with other funds, then staff should not use the excess funds. Staff can use the excess funds for hobbies, extracurricular activities, and normalcy events.

DFPS Accounting staff sends regions a quarterly report of the children and youth that have excess funds from child support payments, and the amount. This report alerts caseworkers of the excess funds.

1568.5 Distribution of Funds After the Child Leaves DFPS Conservatorship

CPS May 2016

When a child leaves conservatorship, DFPS may still receive arrears if OAG is collecting the support for the months the child was in DFPS conservatorship but the monthly support obligation was not paid. DFPS first distributes the funds received by OAG for the month to any non-paid caretaker that cared for the child during the time the child was in foster care. If any funds remain, DFPS is reimbursed for the child’s cost of paid care.

Funds may remain after the cost of care has been paid. If the child who left conservatorship is now an adult (age 18 or older), DFPS disburses these funds to the adult, or to the adult’s guardian. If the child is under age 18, DFPS disburses the funds to the person the court has appointed as the managing conservator.

1568.6 Miscellaneous

CPS May 2016

At times an older youth may live with a parent when DFPS has not approved the placement. If the parent the youth lives with is still paying child support because the child support court order was not modified or dismissed, DFPS disburses those funds to the parent, unless the caseworker and the immediate supervisor have a reasonable belief that the funds would be used in a manner that would harm the youth (for example, to support drug use). If that is the case, DFPS conserves the funds and turns them over to the youth once the youth is 18 years old. For all other circumstances when a child or youth is in any placement that is not approved by DFPS, DFPS will not disburse the funds unless ordered to by the court.

When a child is placed with a caretaker it may take up to 30 days for the home study to be approved. Once the home study is approved DFPS releases the funds received by OAG for that month to the caretaker.

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