Authority/Reference(s) Texas Contract Management Guide, Ch. 7;OMB Circular A-110;Uniform Grant Guidance (UGG); FAR; Texas Government Code §403.055; §2107; §2262; 1 TAC §59.2
Revision Date March 15, 2013

Policy

Routine contract management, billing and monitoring activities may indicate that a contractor has been overpaid because of improper billing or accounting practices or failure to comply with contract terms. In addition, disallowances or over-payments may also be identified by an external auditing entity (e.g., Office of Inspector General (OIG), State Auditor's Office (SAO), KPMG) during an audit review. Any determination of overpayment must be verified based on federal, state, and local laws and rules, DFPS procedures, contract provisions or statistical data compiled from paid claims.

When a determination of overpayment to a contractor is made and verified, contract staff must initiate a collection process to recover the identified overpaid amount unless a management decision is determined otherwise. The contractor must be notified in writing of the types of discrepancies that resulted in the identified overpayment, the method of computing the dollar amount to be refunded and any other actions that DFPS may take.

Acceptable collection methods include:

  • Adjustment of a future invoice in the IMPACT system for contracts that are managed in IMPACT;
  • Contractor repayment of the full amount of overpayment by check or money order; and
  • Establishment of a DFPS-approved repayment plan. This collection method is available, with appropriate approval, when a contractor indicates that a one-time payment will cause a financial hardship OR when the total repayment exceeds 50% of the next month’s anticipated claim amount. In general, the maximum time period for full collection on a payment plan must not exceed 12 installments over a period of one year. Any repayment plans that may exceed this time period will require additional approval by the Director for Purchased Client Services and the Director of Accounting. Under no circumstances may a repayment plan exceed 24 installments over a period of two years. A repayment plan may be established for:
    • Adjustment of multiple future invoices in IMPACT; or
    • Direct installment payments from the contractor to DFPS via check or money order.