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1560 Managing Children’s Funds

CPS February 2021

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.

Children’s Income Accounts (CIAs)

Children’s income accounts are regional checking accounts used to receive and spend funds designated for children in DFPS conservatorship. CIAs do not earn interest.

Each region has a single CIA into which monthly or lump-sum funds are deposited. DFPS accountants manage these deposits, and separate accountants manage the spending of these funds on behalf of children.

Children’s Savings Accounts

A child’s savings account is an individual account assigned to a particular child in DFPS conservatorship. The funds are kept in a pooled regional savings account. Each child’s savings account is a record in IMPACT that shows which funds in the pooled account are associated with that child.

These interest-bearing accounts receive and spend funds only through CIAs (see 1563 Management of Children’s Savings Accounts).

Contracted Bank

The contracted bank is currently Greater Texas Federal Credit Union (GTFCU). GTFCU has established contact persons to provide instructions and answer questions. DFPS staff members contact these people if they have any issues or questions.

1561 Accounting Procedures for Children’s Funds

1561.1 Organization of the Accounting Unit

CPS February 2021

The Accounting Unit is in State Office under the direction of the DFPS Accounting division.

1561.2 Separation of Duties

CPS February 2021

Key duties and responsibilities in authorizing, executing, recording, and reviewing transactions are kept separate among staff members in the Accounting Unit.

Staff members responsible for opening, receiving, and recording accounts receivable transactions are not involved in the authorization or spending of children’s income account (CIA) funds. Staff members doing the account reconciliation duties for a regional account do not also perform receivable or payable accountant duties for that same regional account.

1561.3 Documentation

CPS February 2021

Accounting staff members use IMPACT as the only system of record to manage children’s income accounts (CIAs) and children’s savings accounts, produce checks, and reconcile accounts.

1561.4 Accounts Receivable (Income)

CPS February 2021

The accounts receivable (AR) accountant records in IMPACT the date, amount, and source of all funds received on behalf of a child.

1561.5 Accounts Payable (Expenditures)

CPS February 2021

The accounts payable (AP) accountant records in IMPACT the payee and specific purpose of all expenditures made from a child’s funds. The AP accountant gets a receipt for any expenditure not applied to the cost of the child’s care and keeps it in a designated location as documentation for the expenditure.

1562 Management of Children’s Income Accounts (CIAs)

1562.1 General Information
1562.11 Electronic Access to Children’s Funds

CPS February 2021

Electronic access consists of financial accounts in IMPACT and the online banking system through the contracted bank. Authorized staff members 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 supervisor completes and submits the eMAC (electronic Move, Add, Change request) form to add IMPACT rights for the new hire, including a request for the person to have access to CPS financial accounts.

Removing Electronic Access to a CIA When an Employee Leaves a Position

When a person leaves a position, the CIA supervisor does the following:

  • Completes and submits an eMAC form to have the person removed from access to IMPACT financials.
  • Immediately changes the answers to the security questions on bank accounts.

If the leaving person will continue to be a DFPS employee and to help with children’s income until a replacement is found and trained, continued access is allowed during the transition period.

1562.12 Deposits and Withdrawals of Children’s Funds

CPS February 2021

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

1562.13 Receipt of Funds

CPS February 2021

An accounting staff member notifies the SSI coordinator the first time DFPS receives any funds for a child. The SSI coordinator verifies the type of funds, specifies whether any of the funds are considered a lump-sum payment, and directs the accountant as to how the funds should be spent. See 1580 Managing a Supplemental Security Income (SSI) Lump Sum or Retirement, Survivors, and Disability Insurance (RSDI) Lump Sum for a Child Receiving SSI.

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 additional amount that can be used for appropriate needs. The accountant transfers money, other than the monthly benefit, to the pooled regional savings account and records this in the child’s savings account in IMPACT.

1562.14 Cash Basis Accounting

CPS February 2021

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

Common Sources of Children’s Income

Children’s income consists mainly of Supplemental Security Income (SSI) and Retirement, Survivors, and Disability Insurance (RSDI), which are both Social Security Administration (SSA) benefits. DFPS serves as the representative payee for a beneficiary who is a minor while the beneficiary is in the managing conservatorship of DFPS.

Time Frame for Payments to Caregivers and Providers

All foster care and kinship payments that DFPS makes to the caregiver are paid in the month following the receipt of funds.

In order to determine the exact payment due to a caregiver or provider, DFPS processes invoices 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 for in April, using funds received in March. The amount of a foster care maintenance payment to a contracted foster home or facility is determined by the days of service, daily foster care rate, and facility type.

Monthly payments to caregivers or providers come from CIA funds and are mailed no later than the 15th of the month, if there are no billing discrepancies associated with the funds being spent. If the 15th of the month falls on a weekend or holiday, payments are mailed on the previous business day.

1562.15 IMPACT Financial Account Pages

CPS February 2021

The accountant makes sure that all transactions related to receipt and spending of children’s funds are recorded in the IMPACT Financial Account Register in a timely manner.

1562.16 Excess Funds

CPS February 2021

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

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

1562.2 Account Resource Limits for Children Who Receive SSI

CPS February 2021

To be eligible or remain eligible for Supplemental Security Income (SSI) benefits, a child cannot have resources in excess of $2,000. Resources include the child’s monthly benefit plus the balance of the child’s savings account, which includes funds from RSDI benefits as well as SSI benefits. The monthly benefit is not considered a resource until the month following its receipt. Funds from SSA that must be placed in a dedicated account for the child are also not counted as resources for SSI.

Accounting staff members monitor the resources of children receiving SSI to make sure they do not exceed the $2,000 limit. Accountants use the CIA Balance report to 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 whether the child has needs on which funds can be spent. If no needs are identified, the funds are spent on the child’s 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 February 2021

When a child receiving monthly SSI or RSDI benefits enters an adoptive placement, DFPS remains the representative payee of the child’s benefits during the period between foster care and the adoption’s consummation. DFPS forwards the monthly funds to the prospective adoptive parent for him or her to use for the child’s current maintenance. DFPS resigns as the payee for the child when the adoption is consummated.

DFPS sends the monthly SSI or RSDI payment, and any other payments approved to be used for the cost of care, to the prospective adoptive parent in the month after receipt. If the child was in a paid foster care placement during the month the adoptive placement began, the payment for that month is prorated between the foster care and adoptive placements. See 1715.4 Supplemental Security Income (SSI) Payments and Adoption Assistance Payments.

1562.4 Deceased Children’s Income

CPS February 2021

If the child dies while in DFPS conservatorship, the accountant reconciles the financial records. If the child is still receiving payments of any type, the SSI coordinator notifies the State Office accounting staff.

Payments Received in the Month of the Child’s Death and Later

The 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 an SSI payment 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 before the month in which they are paid. RSDI payments are not owed for the month of death, even if the child dies on the last day of the month. Any RSDI payment received in the month in which the child dies or subsequent months is returned to SSA.
  • Veterans Affairs (VA) payments are not owed for the month of death, even if the child dies on the last day of the month. Any VA payment received that covers the month in which the child dies or subsequent months is returned to the VA.
  • For all other payment sources, a State Office accounting staff member contacts the payment source.

Funds Remaining in the Child’s Account

If any funds remain in the child’s account, the DFPS accounting staff does the following:

  • 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, an accounting staff member notifies the regional attorney. The attorney ad litem for the siblings of the deceased child may wish to file a small estates affidavit, an application to determine heirship, or other related proceedings in probate court on behalf of the siblings. If no action will be filed on behalf of the siblings, the caseworker notifies the deceased child’s next of kin that DFPS will send the funds to the State Comptroller’s Office.
  • If the deceased child has no siblings in DFPS conservatorship or in the Extended Foster Care program, the caseworker notifies the next of kin that DFPS will send the funds to the State Comptroller’s Office.

If DFPS will send the funds to the comptroller’s office, an accounting staff member completes Form 1010 Report and Remit Property of Deceased Children to close out the child’s account.

1563 Management of Children’s Savings Accounts

CPS February 2021

The accounts receivable (AR) accountant establishes an individual savings account in IMPACT for a child when DFPS policy allows. Funds are transferred from the pooled regional checking account into the pooled regional savings account. Any remaining balance in a child’s portion of the checking account at the end of the billing cycle is placed in the savings account.

The pooled regional savings account is at DFPS’s contracted bank. Interest earned by this account is prorated to individual children who have a balance at the end of each reporting period.

1563.1 Transactions

CPS February 2021

All deposits and transfers involving a child’s savings account are only made from or to a regional CIA (pooled regional checking account). Deposits and withdrawals of funds directly 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 Establishment of a Child’s Savings Account

CPS February 2021

To establish a child’s savings account, funds are transferred electronically from the child’s checking account (stored in the pooled regional checking account) to the pooled regional savings account, and a savings account record is created in IMPACT for the child.

1563.3 Closure of Accounts in a Timely Manner

CPS February 2021

Monthly, the accounts payable (AP) accountant uses the Termination Listing report on the Financial Account page in IMPACT. The report identifies children with active accounts who have a Legal Status of FPS Resp Terminated or Adoption Consummated. The report displays the following information:

  • Individual account balances for checking and savings accounts.
  • Child’s current Legal Status.
  • Date of dismissal of DFPS conservatorship.

The AP accountant generates the report using a From date of 11/11/2014 (the first date the Accounting division began entering account information from the contracted bank into IMPACT).

The AP accountant gives the report to the accounting team lead to be included as part of the bank reconciliation process.

1563.31 Children with a Legal Status of Resp Terminated

CPS February 2021

The accounts payable (AP) accountant reviews the Termination Listing report and finds all children with active accounts who have a Legal Status of FPS Resp Terminated.

For each child with this status, the AP accountant determines whether the child is in care at age 18 or older, or whether the child is no longer in a paid placement. The AP accountant notifies the SSI coordinator of each child who is still receiving SSA benefits once the child is out of paid care.

The AP accountant also notifies the SSI coordinator of each child who has an active account but is any of the following:

  • On runaway status.
  • In an unauthorized placement.
  • In a Home and Community-Based Services (HCS) placement.
  • A child with the Dedicated Account box checked on the child’s financial page.

When the AP accountant contacts the SSI coordinator to state that a child with a Dedicated Account box checked has left paid care, the SSI coordinator contacts the State Office SSI program specialist.

1563.32 Children Receiving Funds and No Longer in Conservatorship or the Extended Foster Care Program

CPS February 2021

For each child who is still receiving funds once the child is out of paid care, the accounts payable (AP) accountant moves all funds out of the child’s accounts and closes the accounts in IMPACT. All funds are returned to their source.

Child’s Savings Account

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

  • Transfers the funds to the children’s income account (CIA) (pooled regional checking account).
  • Returns the funds to their source.

Child’s Checking Account

If the child has funds from SSI or RSDI benefits in the pooled regional checking account, the AP accountant does the following:

  • Makes a separate check for each child.
  • Makes each check payable to the Social Security Administration.
  • Notes “Conserved Funds” on each check stub.
  • Gives the checks to the SSI coordinator.

The SSI coordinator hand delivers or mails the checks with the appropriate documentation to the Social Security Administration.

If the child has funds from other sources in the pooled regional checking account, the AP accountant returns the funds to each payment source.

1564 Duties of Accounts Receivable (AR) Staff

CPS February 2021

Direct Deposit Forms

The AR accountant sends Form 74-176 Direct Deposit Authorization to caregivers who will receive payments from DFPS.

The AR accountant sends an email to each provider to inform the provider of each transaction into his or her bank account for a foster care payment using children’s income.

The AR accountant forwards the completed Form 74-176 to Accounts Payable Accounting, so the form can be entered in the comptroller’s Uniform Statewide Accounting System (USAS).

The following guidelines apply to direct deposit forms:

  • Original signatures are not required. A faxed, or scanned and emailed, copy is acceptable.
  • The Financial Institution section of the form needs to be completed. It is recommended, but not required, that a representative of the financial institution complete this section because incorrect information will cause delays.
1564.1 Manual Receipt of Funds by Accounts Receivable (AR) Staff

CPS February 2021

Checks

When DFPS receives a check in the mail, the accounts receivable (AR) accountant does the following:

  • Writes on the back of the check: DFPS Account # (enter pooled regional checking account number).
    • Completes a bank deposit slip.
    • Makes a copy of the check and deposit slip.
  • Gives the copies to the team lead.

The team lead does the following:

  • Deposits the check into the pooled regional checking account no later than three business days after DFPS received it.
  • Tapes the deposit receipt to the copy of the check. This is part of the bank reconciliation.

The AR accountant enters the deposit in IMPACT, using the date the deposit was put in the bank.

Cash

The Accounting Unit staff does not accept cash.

If someone offers cash for a deposit, an accounting staff member gives the person the following options:

  • Use the cash to make a money order.
  • Write a check instead.

When DFPS receives a money order, Accounting Unit staff members follow the same steps as when receiving a check.

1564.11 Checks Payable to Person Versus DFPS

CPS February 2021

Parent

If DFPS receives a check that is made payable to a parent for a child, an AR staff member sends it back to the Social Security Administration (SSA) or other source. These checks cannot be deposited into a CIA (pooled regional checking account).

Young Adult in DFPS Care

In some instances, funds received by check are made payable to a young adult who is age 18 or older and has signed an agreement to stay in the care of DFPS.

An AP accountant contacts the SSI coordinator to see whether the Accounting division has received a copy of a signed Voluntary Extended Foster Care Agreement (VEFCA) or Voluntary Return to Foster Care Agreement (VRFCA).

If there is no signed agreement, the SSI coordinator contacts the caseworker to see whether the young adult has agreed to remain in DFPS care.

If there is a signed agreement, the AP accountant does the following:

  • Requests a copy of the agreement from the SSI coordinator, to put in the young adult’s financial folder.
  • Sends the following to the young adult’s caseworker:
    • The check.
    • A letter explaining that the young adult must endorse the check and return it to the CIA office.
    • An addressed, prepaid envelope to be used when returning the endorsed check.

When the CIA office receives the endorsed check, the AR staff follows the process in 1564.1 Manual Receipt of Funds by Accounts Receivable (AR) Staff.

These funds are used for the 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 child’s savings account (using the pooled regional savings account) to earn interest for the young adult.

1564.2 Monthly Procedures for Accounts Receivable (AR) Staff

CPS February 2021

Unless noted otherwise, each month the AR accountant performs the following functions:

  • Identifies new benefits that a child in DFPS conservatorship is receiving and reports those to the SSI coordinator.
  • Records deposits in the child’s Financial Account Register in IMPACT.
  • Checks the Dedicated Account box if a dedicated account has been set up for the child.
  • Unchecks the Dedicated Account box if the account has been closed. (Information on setting up and closing dedicated accounts comes from the SSI coordinator or the Federal and State Support division.)
  • Establishes a savings account for a child when allowed by policy (see 1563 Management of Children’s Savings Accounts).
  • Records the account on the Financial Account page in IMPACT.

1565 Duties of Accounts Payable (AP) Staff

CPS February 2021

The people involved in accounts payable functions for funds in a children’s income account (CIA) (pooled regional checking account) are not involved in accounts receivable functions for the same regional account.

Each month, the AP accountant completes a verification process for each child using the Monthly Income and Placement Report from IMPACT to determine the appropriate spending of income based on DFPS policy. Information on the report includes the following:

  • The child’s placements during the service month, to determine whether the child was in a paid placement or another type of placement. (Examples of other placements include unpaid licensed care, relative (kinship) placement, pre-consummated adoptive home, own home, long-term medical facility, detention facility, and unauthorized absence. DFPS policy provides guidelines for moving children’s income out of the account in these situations. See 1565.4 Income When Child Is Not in Paid Substitute Care.)
  • The child’s legal status, to determine whether DFPS maintained conservatorship of the child during the service month and was responsible for receipt and spending of funds.
1565.1 New Benefit Award from SSA

CPS February 2021

When the Social Security Administration (SSA) awards a new benefit to a child, 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 from SSA, 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 the following:

  • SSA award letter.
  • Distribution list for lump sums.
  • Copies of representative payee reports.
  • Receipts from SSA lump-sum payments made to the child.
  • Documentation for any situations that affect the balance of the account outside the normal parameters. (Normal parameters are deposits and checks for the cost of care, and checks redirected to a caregiver.)

When a child’s income account (the child’s portion of the pooled regional checking account) is closed and all funds are returned as specified in policy, the accounting staff follows the retention schedule (see 1568 Records Retention Requirements for Transactions Involving Children’s Funds).

1565.2 Stop Payments

CPS February 2021

The AP accountant uses Stop Payment procedures when a payment needs to be canceled. The accountant completes the Stop Payment form (found on the accounting shared drive), including the account number and check number, and sends the form to the accounting supervisor. The supervisor signs the form and sends it to the contracted bank for processing.

The funds are not withdrawn from the account if all of the following occur:

  • The contracted bank receives the check (from the person or entity to whom it was made payable, or from a bank on behalf of that person or entity).
  • When the contracted bank receives the check, the bank has already received the Stop Payment form.
  • The contracted bank receives the check no more than six months after receiving the Stop Payment form. (The stop payment is in effect for six months. However, there is printed text on the check that states it is void after 90 days.)

There are two reasons for a stop payment:

  • The payment was sent in error.
  • The check needs to be replaced or canceled because it has not been cashed or deposited. See Outstanding Items Procedures, below.

Outstanding Items Procedures

Replacing a Payment

If a check needs to be replaced because it has not yet been cleared (processed through the bank), an AP accountant stops payment on the original check and issues a new check. However, the AP accountant does not do this until at least two weeks after the original check was issued.

Canceling a Payment

If a payment still has not been cleared on the 90th day from the date the original check was issued, the AP accountant voids the item in the child’s account in IMPACT and makes a stop payment.

1565.3 Income When Child Is in Paid Substitute Care

CPS February 2021

The AP accountant sends the foster care billing coordinator a list of income to be applied toward children’s cost of care on monthly invoices. Then, the following steps occur:

  • The foster care billing coordinator returns the income list with the invoice numbers annotated where each child’s income was applied.
  • The AP accountant begins payments for cost of care from the CIA (pooled regional checking account) by sending the list of items to be paid to the team lead. The following requirements apply:
    • The AP accountant does not create subsequent payments for invoices that are Valid With (VWI) rejected line items until the rejections have been corrected in IMPACT and the invoices can be submitted for payment.
    • The AP accountant notifies the team lead of invoices that continue to have rejected line items, so that the correction process can be elevated to higher management.
  • The team lead processes the report using a query in Microsoft Access, in order to generate a report to process through the state comptroller system. The team lead notifies the AP accountant of the amount of each check, which should match the AP accountant’s list of items to be paid.
  • The team lead sends a consolidated file of all payments to the State Office accounting staff to process.
  • 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.
  • The state comptroller’s office either produces checks or issues electronic payments using an automated clearing house (ACH) transfer.

More Than One Placement during the Month

If a 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 (or if the child is in a non-paid placement but moves to a paid placement) during the month, the AP accountant applies all income to the paid placement, up to the cost of care amount that was incurred in the paid placement. If there are funds left, the AP accountant determines how to move them out of the account using the guidelines in 1565.4 Income When Child Is Not in Paid Substitute Care.

Excess Funds

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

See 1563.2 Establishment of a Child’s Savings Account.

1565.4 Income When Child Is Not in Paid Substitute Care

CPS February 2021

When DFPS has managing conservatorship, and the child is not in a paid placement, funds are handled based on the placement circumstances. If the funds are Supplemental Security Income (SSI) or Retirement, Survivors, and Disability Insurance (RSDI), the AP accountant notifies the SSI coordinator and manages the funds as directed.

The table below describes how to manage the funds when the child is in various types of placements. However, there may be special circumstances that would require actions other than the ones listed in the table.

Type of Placement

How the Funds Are Managed

The child’s own home

The AP accountant contacts the SSI coordinator to determine how to handle SSI or RSDI benefits.

Unpaid licensed care

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

Long-term medical facility

The AP accountant contacts the SSI coordinator to determine how to handle SSI benefits. SSA may reduce SSI benefits to a spending allowance once SSA is contacted about this placement. DFPS forwards the reduced payment to the medical facility if the facility is able to keep funds for the child.

Detention facility

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

Home and Community-Based Services (HCS) placement

The AP accountant does not maintain funds through the CIA (pooled regional checking account). The AP accountant contacts the SSI coordinator to determine how to handle SSI or RSDI benefits. 

Unauthorized absence

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

Relative (kinship) placement

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

Adoptive placement

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

Exception: If the prospective adoptive parent is receiving an Adoption Assistance (AA) cash benefit and the child receives SSI, the AP accountant returns the SSI funds to SSA. A prospective adoptive parent cannot receive both the child’s SSI benefit and AA. However, the AP accountant can forward RSDI to the prospective adoptive parent receiving AA.

Consummated adoptive home

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 these funds to the adoptive parent. The AP accountant returns to SSA funds received in the month after the adoption is consummated.
1565.5 Lump Sum Distribution

CPS February 2021

When the accounts receivable (AR) accountant receives a lump-sum payment (a payment of more than the current month’s benefit) for a child receiving SSI benefits, the AR accountant contacts the SSI coordinator for information.

If the lump sum is for SSI benefits, DFPS’s goal is to spend the funds within nine months after receipt of the lump sum. Any remaining funds at the end of that period count as resources under federal law.

The SSI coordinator and the AP accountant follow the procedures below:

  1. Within 30 calendar days of receiving notice of the lump-sum payment, the SSI coordinator does the following:
  2. The AP accountant issues a check for the purchase of the approved items or services and sends it to the caseworker. The check is made payable to the business where the items or services are to be purchased, not to the caseworker. The caseworker purchases the items or services within 30 calendar days of receiving the check. The caseworker sends copies of receipts to the SSI coordinator and the AP accountant. The AP accountant keeps receipts in the Child’s Income folder for all expenditures other than cost of care.
  3. 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 (except the portion spent on approved items or services) is placed in the child’s savings account to earn interest.
  4. If there are funds remaining from the lump sum (after approved items or services have been purchased and up to $1,150.00 has been reserved in the child’s savings account), the remaining portion of the lump sum will be used for future cost of care for up to nine months. Using the exact number of service days, the AP accountant calculates the cost of care, minus the child’s monthly benefit, that will occur in the next nine months (at most) 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.
  5. 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 keeps a copy in the lump-sum binder until the nine-month period has expired. The AP accountant files the original form in the Child’s Income folder.
  6. The AP accountant monitors all expenditures from the lump sum. After six months, if the child’s remaining funds from the lump sum are over the $2,000 SSI resources limit, the AP accountant notifies the SSI coordinator of the amount of funds left from the original lump sum that can still be used for appropriate needs. This helps to remind the regional staff that, if the child needs an item or service that can improve the child’s daily living conditions, there are funds to make this purchase.
  7. If SSA distributes the lump sum in portions, the AP accountant completes a form for each portion received. The nine-month time frame for each portion begins on the date of the deposit of that portion.

1566 Reconciliation Requirements for Accounts Reconciliation (Recon) Staff

CPS February 2021

The recon accounting staff monitors the balance in the pooled regional checking account daily whenever possible.

The recon accountant does the following:

  • Uses the Regional Reconciliation report and marks off outstanding items as they are processed through the bank, modifying the total as appropriate.
  • Takes appropriate action when he or she detects anomalies, such as bank charges or Social Security Administration (SSA) reclamation of payment.
  • Uses the Regional CIA Reconciliation report, the CIA Account Balances report, and the bank statement to place appropriate totals on the reconciliation template to show that the information, as recorded in IMPACT, is reconciled to the bank statement. If there are any variances, the recon accountant records an explanation on the template.
  • Runs the CIA Account Balances 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.
  • Makes sure there are no children receiving SSI benefits who have resources exceeding the SSA’s resource limit for SSI recipients. If a child’s funds exceed the resource limit, the recon accountant notes the finding on the report and informs the SSI coordinator.
  • Presents the reconciliation package to the team lead to sign. The reconciliation package consists of the following:
    • Monthly bank statement.
    • Regional CIA Reconciliation report.
    • CIA Account Balances report.
    • Reconciliation template.

1567 Duties of Accounting Team Lead

CPS February 2021

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

  • Reviewing reports and other information.
  • Approving staff members’ work.
  • Training staff.
  • Preparing reports.

The team lead also makes sure blank checks are kept in a secured area and more are ordered as necessary. Access to this area is restricted to the accounts payable staff.

1567.1 Procedures for Reviewing Information and Reports

CPS February 2021

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

  • Makes sure that all paper checks are deposited into the bank within three business days of receipt.
  • Completes the first-level review of the regional reconciliation at mid-month and at the end of the month.
  • Monitors Prior-Period Adjustments and adjusts entries.
  • Prepares payment information in the required format to process through the state comptroller’s system.
1567.2 Monthly Reconciliation Responsibilities of Accounting Team Lead

CPS February 2021

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

  • Reviews uncleared items (transactions that the bank has not yet processed) that are on the Regional CIA Reconciliation report.
  • Verifies that the ending balance on 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 make sure 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 (expenditures) listed.
  • Tracks the check numbers used.
  • Accounts for all voided checks.
  • Checks balances of accounts with SSI benefits, using the CIA Account Balances report, to make sure funds are not lost because of passing deadlines.

As part of the monthly bank reconciliation process, the team lead and supervisor do the following:

  • Review outstanding items listed on the reconciled bank statement and instruct the AP staff to void any items more than 90 days old.
  • Sign and date the reconciliation report as the review and approval of the reconciliation.
  • Make sure the approved reconciliation documentation is kept for five years after the end of the current fiscal year.
1567.3 Annual Reconciliation for Each Child

CPS February 2021

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

If any child is listed with a status of Overdue, the AR accountant notifies the SSI coordinator.

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

1567.4 Reconciliation of Child’s Income at Discharge

CPS February 2021

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 following:

  • The child’s Transaction report in IMPACT, to reconcile all income and expenditures.
  • The CIA Balance report, to determine the current balance, the existence or absence of a child’s savings account, and the existence or absence of the Dedicated Account indicator.

The team lead also makes sure 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 complete, the AR accountant transfers the closing balance from the child’s savings account to the children’s income account (CIA) (pooled regional checking account).

If funds in the child’s savings account originated from Supplemental Security Income (SSI) or Retirement, Survivors, and Disability Insurance (RSDI), DFPS returns the funds to the Social Security Administration. The child’s Social Security number is listed on the check, along with the name the child was given at birth, 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 returned to SSA are monthly benefits.

If funds in the child’s savings account originated from another source, DFPS returns the funds to that source.

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

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

1567.5 Reconciliation of Discrepancies

CPS February 2021

The team lead investigates any discrepancy uncovered during the reconciliation review. The team lead researches the records in question to resolve problems and correct errors.

In the case of potential fraud, the team lead consults with the second-level supervisor to determine an appropriate course of action.

SSA Reclamations

DFPS sends a check to the Social Security Administration (SSA) to return SSA 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 the contracted bank, causing the funds to be withdrawn from the children’s income account (pooled regional checking 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 in IMPACT. The accounting staff takes the following actions, as appropriate.

Check Not Yet Processed

If the check from DFPS to SSA 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 is not shown as reconciled in IMPACT until the time of reconciliation when the next month’s bank statement is received.

Check Already Processed

If the check from DFPS to SSA has already processed through the bank, the AP accountant notifies the team lead who then contacts the contracted bank and requests the following:

  • A copy of the indemnity letter from SSA requesting that the funds be returned.
  • A letter from the contracted bank stating exactly what happened with the withdrawal of funds from the CIA (pooled regional checking account).

The AR accountant finds 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 AR accountant does the following:

  • Makes a copy of the receipt letter.
  • Prints a copy of both sides of the canceled check.
  • Makes a copy of the page of the bank statement where the withdrawal was made (in connection with the check from DFPS) and carefully circles the entire transaction on the copy.
  • Makes a copy of the page of the bank statement where SSA made the original deposit and carefully circles the entire transaction on the copy.
  • Writes a brief synopsis of the events, including dates.
  • Consolidates all information into a packet. The packet includes these seven items:
    • Synopsis of events.
    • Indemnity letter from SSA to contracted bank.
    • Letter from contracted bank to DFPS.
    • Receipt letter from SSA.
    • Copy of the check, front and back.
    • Copy of the bank statement page showing the withdrawal.
    • Copy of the bank statement page showing the deposit.
  • Scans and emails all documentation in the packet to the SSI coordinator, who then takes it to the local SSA office.

When DFPS receives funds from SSA to recoup the double payment, the AR accountant enters the transaction as a deposit. This brings the child’s account balance to zero. The AR accountant then closes the child’s account.

1568 Records Retention Requirements for Transactions Involving Children’s Funds

CPS February 2021

General accounting records in CPS and CPI, such as banking records, accounts receivable, and accounts payable, are retained for five years after the end of the current fiscal year and then destroyed. See the CPS Children’s Funds Management Accounting Records series of the Records Retention Schedule. All other DFPS accounting records are included in other sections of the retention schedule.

The regional accounting unit retains the following:

  • All check stubs for five years after the end of the current fiscal year, as stated in the Retention Schedule, Canceled and Returned Checks, Stubs, Warrants, and Drafts.
  • Reconciliation documentation for five years after the end of the current fiscal year.

1569 Child Support Payments

CPS February 2021

By law, when a child is placed in substitute care, the right to receive child support payments (if any) for the child is assigned to the state, as of the date the child enters care.

42 U.S.C. §671(a)(17)

Texas Family Code §264.109

1569.1 Request for Court Order for Child Support

CPS February 2021

DFPS requests a court order for child support unless parental rights have been terminated. See 5341 Requesting Child Support From the Parents of Children in DFPS Conservatorship.

The court may order the parent to pay child support if both of the following apply:

  • The parent is financially able to make the payments.
  • DFPS is appointed permanent managing conservator, but the parent’s parental rights have not been terminated.

The court has the discretion to order child support in cases where either of the following applies:

  • DFPS is appointed temporary managing conservator.
  • Parental rights have been terminated.

Texas Family Code §154.001

40 TAC §700.1108(a)

1569.2 Enforcement of Child Support Court Order

CPS February 2021

Once the court issues the order, DFPS begins to receive child support payments for the amount due while the child is in substitute care.

The Child Support Division in the Office of the Attorney General (OAG) is responsible for enforcing the child support order. OAG sends DFPS any funds that OAG collects for either of the following:

  • Monthly payments.
  • Arrears (funds due from past months).

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

1569.3 Distribution of Child Support Funds When the Child Is in DFPS Conservatorship

CPS February 2021

Monthly Payments

OAG sends funds that it collects for the monthly child support obligation to DFPS.

If the child is in a DFPS-paid placement, the funds are transferred to an account used to offset DFPS’s foster care costs. If the amount received for the month is more than the cost of care, DFPS conserves the remainder to be used in the child’s best interest.

If the child is in an unpaid placement with a relative or fictive kin, DFPS passes funds received for the monthly payment to the caregiver to use for the child’s care.

At times, despite DFPS’s input or objection, a court determines that a child should stay in an unauthorized placement (for example, when a relative cannot obtain an approved home study). In these circumstances, DFPS passes the monthly child support to the caregiver only if the court orders DFPS to do so.

If the child is in a placement that DFPS does not pay for (for example, a hospital, independent living arrangement, or juvenile detention 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 during which the child was in substitute care (known as “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 makes sure the caregiver is paid before DFPS. This helps to promote this type of caregiver placements.

If any funds remain, DFPS conserves the funds to use in the child’s best interest.

Best Interest

DFPS staff members determine the child’s best interest by consulting with the DFPS regional attorney and considering the child’s current and foreseeable needs.

If staff members can purchase the item or service with other funds, they do not use the conserved excess funds. Staff members may use conserved funds for the child’s hobbies, extracurricular activities, and normalcy events.

The DFPS Accounting Unit sends each region a quarterly report of the children who have excess and conserved funds from child support payments, and the amount that each child has. This report alerts caseworkers that the child has funds that can be used in the child’s best interest.

1569.4 Excess Child Support Funds in Title IV-E Cases

CPS February 2021

In Title IV-E cases, excess funds are rare but occur when the monthly child 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. This is known as current month excess.

Excess funds can also occur when the federal and state governments have been fully reimbursed, and there are remaining funds. This is known as second excess collection.

The Child Support Division in the OAG (not DFPS) determines both of these 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)

DFPS staff members determine the child’s best interest by consulting with the DFPS regional attorney and considering the child’s current and foreseeable needs. If staff members can purchase the item or service with other funds, then they do not use the excess funds. Staff members may use the excess funds for the child’s hobbies, extracurricular activities, and normalcy events.

The DFPS Accounting Unit sends each region a quarterly report of the children who have excess funds from child support payments, and the amount that each child has. This report alerts caseworkers of the excess funds.

1569.5 Distribution of Child Support Funds after the Child Leaves DFPS Conservatorship

CPS February 2021

When a child leaves conservatorship, DFPS may still receive arrears if OAG is collecting the child support for months during which the child was in DFPS conservatorship but the monthly support obligation was not paid.

DFPS first distributes these funds to any non-paid caregiver who cared for the child while the child was in substitute 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 gives these funds to the adult or to the adult’s guardian. If the child is under age 18, DFPS gives the funds to the person whom the court has appointed as the child’s managing conservator.

1569.6 Child Support Funds in Placements That Are Unapproved or Not Yet Fully Approved

CPS February 2021

Youth Living with Parent without DFPS Approval

A youth sometimes lives with a parent when DFPS has not approved the placement. If the parent with whom the youth lives is still paying child support because the child support court order was not modified or dismissed, DFPS gives those funds to the parent, unless the caseworker and the caseworker’s 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 gives them to the youth once the youth turns 18.

Home Study Not Yet Approved

When a child is placed with a caregiver, it may take up to 30 days for the home study to be approved. Once the home study is approved, DFPS gives the caregiver the funds that OAG received while the home study was under review.

Other Unapproved Placements

In all other circumstances when a child or youth is in any placement that DFPS has not approved, DFPS does not give the child support funds to anyone unless the court orders DFPS to do so.

1569.7 Restitution Payments for Intoxication Manslaughter

CPS November 2023

A court is required to order a person convicted of intoxication manslaughter to pay restitution for a child whose parent or guardian was the victim of the offense. In other words, if a drunk person causes the death of a child’s parent or guardian and is convicted of intoxication manslaughter for the death, the convicted person is required to make payments for the benefit of the child. The restitution payments go to the child’s parent or guardian (or to DFPS, if the child is in DFPS conservatorship) on behalf of the child.

The court determines the monthly amount to be paid. These payments continue until one of the following occurs:

  • The child graduates from high school at age 18.
  • The child turns 18, if the child graduated from high school at age 17 or younger.
  • The child turns 19, if the child did not graduate from high school at age 18 or younger.

If the convicted person is unable to pay the restitution because the convicted person is in jail or prison, the convicted person is required to begin payments no later than the first anniversary of the date the convicted person is released from the jail or prison (that is, no later than one year after being released).

Texas Code of Criminal Procedure, Chapter 42, Article 42.0375

Restitution Payments for a Child in DFPS Conservatorship

A caseworker must notify the regional CPS Supplemental Security Income (SSI) coordinator when all of the following apply:

  • A court orders, or has already ordered, intoxication manslaughter restitution payments for a child in DFPS conservatorship or a child entering DFPS conservatorship.
  • The caseworker receives notification of the order.
  • DFPS will be receiving the payments on behalf of the child.

The SSI coordinator contacts the DFPS Accounting division, which will manage the child’s funds from the intoxication manslaughter restitution payments.

DFPS Accounting receives and maintains the funds in the DFPS children’s income account. The restitution funds are not used to pay for the child’s foster care, but they may be used for other items or services, such as items for recreation, hobbies, or sports.

The caseworker must inform the child and the child’s caregivers of the restitution order and the fact that DFPS is receiving the funds on behalf of the child. If the child, the caregiver, or the caseworker wants some of the child’s restitution funds to be spent on something, the caseworker or caregiver contacts the regional SSI coordinator, who coordinates the request with the Children’s Income Unit in DFPS Accounting.

If a convicted person who was ordered to pay restitution does not pay it, DFPS reports the situation to the Office of the Attorney General (OAG) of Texas or another appropriate person or entity, for the purpose of enforcement of the restitution order.

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