Overpayment Policy
E060-0530 | Revision Date: 8/31/2022

Overview

This policy provides instructions and guidelines for the Overpayment Unit including the revision of all sections regarding state regulations applicable to Aid to Families of Dependent Children – Foster Care (AFDC-FC) identification and collection of overpayments from the Foster Care (FC), Kinship Guardianship Assistance Payment (Kin-GAP), Approved Relative Caregiver (ARC) and Adoption Assistance (AAP) programs.    This policy is applicable to all new as well as existing referrals and cases in which AFDC-FC overpayments were or have been discovered on or after 07/01/2021 regarding foster care providers.

Table of Contents

Policy

Procedure

Helpful Links

Version Summary

This policy guide was updated from the 10/24/2012 version to align with the implementation of the California Statewide Automated Welfare System (CalSAWS) replacing the Integrated Financial System (IFS), and the Automated Provider Payment System (APPS) to complete the functions of the Overpayment Collection Unit Eligibility Workers (EW).

POLICY

Policy/Background Statement

The Department continues to focus on minimizing the occurrences of uncollectable overpayments while ensuring that collectible overpayments are assessed and collected in a manner consistent with state law, regulations and state instructional guidance.

Overpayment

An overpayment is any amount of aid paid to an Out-of-Home Care (OHC) provider, which was received on behalf of a child to which the provider was not entitled. The provider is not entitled to aid where the provider did not care for the child in their home for the period of time for which they were paid.

Overpayment Collections

Overpayments may be collected from OHC providers, as follows:

Agency OHC Provider Collections

The Welfare and Institution Code (WIC) Section 11466.24 instructs counties to collect an overpayment discovered on or after January 1st, 1999 made to an OHC provider. Collection activities for agencies are to align with contract language in the agency agreement, and allow the option to place an agency on “Do not Refer” status for noncompliance. Collection for overpayments shall be requested from the following agency OHC providers:
  • Foster Family Agency (FFA) Resource Family Homes (RFH)
    • This does not include non-agency (non-FFA) RFH
  • Group homes
  • Short Term Residential Therapeutic Program (STRTP)
  • Intensive Treatment Foster Care/Intensive Services Foster Care (ITFC/ISFC) Community Treatment Facilities (CTF)
  • Transitional Housing Program-Plus Foster Care (THPP+FC)
    • Transitional housing placement providers operating the THP-FC are not included.

For overpayments, the agency shall submit payment after exhaustion of due process in favor of the county, and which results in identification of the overpayment. The agency shall submit re-payment in conformity with the priority of repayment, including lump sum repayment, voluntary repayment terms or involuntary repayment terms, including referenced directions on methods of voluntary repayment agreement and involuntary collection. Further, the county may employ and implement contract actions. If the agency’s contract expires and overpayment collection attempts have not resulted in re-payments by the agency, the County shall refer the agency to the Treasury and Tax Collector (TTC).

Exclusions for Agency overpayment requests

  1. The child was temporarily removed from the home and payment was owed to the provider to maintain the child’s placement, or the child was temporarily absent from the provider’s home, or on runaway (i.e., AWOL) status and subsequently returned, and payment was made to the provider to meet the child’s needs.
    • If an AFDC FC eligible child is temporarily absent from an eligible facility, a bed hold may be made by the Children’s Social Worker (CSW) for no more than seven (7) days for school, work or training related occurrences, and no more than thirty (30) days for hospitalizations, visiting, vacationing, or any emergency circumstance. The County may make payments to the eligible facility in order to continue to meet the child’s needs for the extent of the bed hold.
  2. Discrepancies on placement stop dates; the agency is to provide supportive documentation to corroborate that the child/youth was still in placement, and to be able to exclude the overpayment.

Non-agency Collectible Overpayments Collection

Non-agency OHC providers are, as follows:

  • Non-FFA Resource Family Homes (RFH)
  • Relative Homes
  • Non-Related Extended Family Members (NREFM)
  • Non-Related Legal Guardians (NRLG)
  • Kinship-Guardianship Assistance Payment (KIN-GAP) guardians
  • Non-Minor Dependents (NMDs) residing in a SILP setting.

Overpayment collections from a non-agency OHC providers shall only be made in instances of fraudulent activity. The determination of fraud, including supporting evidence, as well as the overpayment collection method shall be documented. Overpayments from non-agency providers that exceed six (6) months of collection attempts are to be referred to the TTC.

Exclusions for Non-agency overpayment requests

The county shall not demand collection of overpayments made to any type of non-agency OHC providers, where any of the following conditions exist:

  1. The overpayment was the result of a county administrative error.
    1. Overpayment may arise for non-agency OHC providers under the following OHC programs:
      1. Foster Care (FC)
      2. Adoption Assistance Program (AAP)
      3. Kinship Guardianship Assistance Payment Program (Kin-GAP)
      4. Approved Relative Caregiver (ARC)
        • Except for ARC Funding Only cases with associated Aid Codes of 2P and 2R, ARC overpayment cases are to be administered by DPSS, consistent with the procedures set forth in ACL 15-96. For ARC cases with 2P and 2R Aid Codes, the Department shall follow the procedures herein this policy.
  2. Neither the county nor the provider was aware of the information that would establish the child’s ineligibility for foster care benefits in that provider’s home.
  3. The provider did not have knowledge of, and did not contribute to the cause of the overpayment.
    • Even though the county cannot collect the above listed overpayments, the county must send the non-agency OHC provider the Overpayment Notification Letter, which informs the provider that they have no legal or other obligation to return the overpayment, and that failure to return the overpayment will not result in any adverse action against the provider and any child living in the home. If the non-agency OHC provider contacts the county seeking to make full or partial repayment of the overpayment, the script protocol is to be recited by Department staff for further instructions and clarification to the non-agency OHC provider. If the non-agency OHC provider still requests to voluntarily repay all or a part of the overpayment after being advised of their legal rights not to do so per the script protocol, the Repayment Confirmation Agreement Letter is to be sent to the OHC provider and arrangements may then be made to receive whatever amount of the overpayment that the non-agency OHC provider wishes to return to the county.
    • The department must not take any further action against the non-agency OHC provider if they do not respond to the Overpayment Notification Letter. 
  4. The county shall not pursue collection of overpayments made to a non-agency OHC provider where the cost of the collection exceeds the amount of the overpayment.
    • The cost which the county shall consider when determining the cost effectiveness to collect are total administrative and personnel cost, legal filing fees, investigative costs, and any other costs which are applicable.

The county shall have a written debt write-off approved by the County Welfare Director (Director's Write Off) covering situations including, but not limited to:

    1. Where the debtor cannot be located.
    2. Where the debtor is unable to pay.
    3. Where the costs of further overpayment recovery actions will exceed estimated recovery amounts.
    4. The written policy may include a provision permitting write off of an amount not to exceed $100.00.
  •  

Director’s Write Off of Non-Title IV-E

The elimination of the entire balance of the asset to offset the overpayment approved by the County Welfare Director as listed on the Title IV Management Directive 11-03.

The director’s write off for Non-Title IV-E overpayments includes the following situations:
  1. The county shall not pursue collection of collectible overpayments made to an overpaid foster care provider where the cost of the collection exceeds the amount of the overpayment. The cost which the county shall consider when determining the cost effectiveness to collect is total administrative costs, and any other costs which are applicable.
  2. This option should be considered after the overpayment has been identified as collectible and the following activities have occurred.
    1. A Notice of Action has been issued to the provider to allow for a formal and/or formal state fair hearing and the foster care provider either failed to make a request for the two available hearings, exhausting, due process or determinations in hearings were in favor of DCFS.
    2. If under $100.00 DCFS can request a Director’s Write-Off attaching all necessary documentation such as:
      • CalSAWS Overpayment Report
      • Description or reason of write-off
    3. If over $100.00 the overpayment shall be sent to the Treasurer Tax Collector (TTC) for collection processing.
      • The process of collection shall be followed by DCFS with updates from TTC on progress or inability to collect.
  3. Depending on the information received from TTC regarding attempts to collect, the handling overpayment staff shall review and determine if the inability to collect will meet the criteria for a Director’s Write-Off.
    1. The cost of further recovery actions exceeds the estimated recovery amount of the overpayment.
    2. The debtor involved with this overpayment cannot be located.
    3. The debtor is unable to pay.

Notice of Action (NOA)/Appeals

When it is determined that a collectable overpayment has occurred and is collectible, an invoice and a NA are sent to OHC providers. NA forms are placement type-specific, as follows:

  • NA 1261: Agency OHC providers
  • NA 1261A: Non-agency OHC providers with the exception of KIN-GAP guardians.
    • For fraudulent activity collections only.
  • NA 1261B: KIN-GAP guardians.
    • For fraudulent activity collections only.
  • NA 791: AAP Notice of Action and Identification of Overpayment.
    • For fraudulent activity collections only.
  • NA 1277: ARC Notice of Action for ARC Overpayment
    • For fraudulent activity collections only.
    • Except for ARC Funding Only cases with associated Aid Codes of 2P and 2R, ARC overpayment cases are to be administered by DPSS, consistent with the procedures set forth in ACL 15-96. For ARC cases with 2P and 2R Aid Codes, the Department shall follow the procedures herein this policy.
PROCEDURE

Potential Overpayment Identified by the CalSAWS

Overpayment Collection Eligibility Worker (EW) Responsibilities

  1. Receive and review the newly detected potential overpayment assignment from CalSAWS.
  2. Research CalSAWS, CWS/CMS and any other applicable systems such as, eCAPS, manual budget issuance, etc.
  3. As needed, contact the CSW, Redetermination EW, Intake EW, EW/TA, agency and/or caregiver to obtain additional information and supporting documentation to determine the collectability of the overpayment.

When an Overpayment is Determined to be Collectible

The following actions are to be taken when an overpayment is determined to be collectible. 

Agency OHC Provider Collections

Based on the Statue of Limitations for agency OHC providers Master Contract for Agency; the County is able to collect up to five (5) years after the agency OHC provider has lost their license. There is no time limitation if the OHC provider is still licensed.

Non-Agency OHC Provider Collections

The County shall not initiate overpayment recovery after one (1) year from the date the County discovers the overpayment. When the overpayment recovery was initiated within one year of the date the County discovered the overpayment, the County shall continue to recover the overpayment until fully recovered or written off pursuant under the County’s write off policy.

Overpayment Collection Eligibility Worker (EW) Responsibilities

  1. Generate an invoice and two (2) NOAs. Send the invoice along with one (1) copy of the NOA to the OHC provider requesting repayment.  File one (1) copy of the NOA.
      • NOAs for Non Agency OHC are to be sent only for fraudulent overpayment cases.
        1. The OHC provider has thirty (30) calendar days to respond by providing payment to the County. If the OHC provider wishes to dispute the overpayment, the OHC provider has thirty (30) calendar days to request an informal hearing held by the County, or by following the appeals process indicated on the NOA within ninety (90) calendar days, or by undertaking both the informal hearing and appeals processes within their respective timelines.
          • Payments submitted to the County are mailed by the OHC provider directly to the Overpayment Department and a copy will be provided to the Overpayment Collection EW.
            1. If an overpayment is paid in full, a copy of the payment and invoice shall be filed for auditing purposes.
            2. If an overpayment is not paid in full, follow up with the OHC provider as the County does not accept partial payments.
              • The OHC provider shall be advised via telephone and or email that full payment is due. Also, a copy of the invoice shall be re-submitted to the OHC provider.
              • The OHC provider shall be given and additional thirty (30) calendar days to provide payment and, instances whereby full payment is not made, at the end of the additional thirty (30) calendar days, place a “Do Not Refer’ in CWS/CMS.
  2. Log in the information from the invoiced overpayment regarding the NA 1261 into the SB 84 control log in the shared drive.
  3. If unable to contact and/or collect from the agency OHC provider, consult with the Overpayment Collection Eligibility Supervisor (ES).
  4. If the OHC provider disputes the collectability of the overpayment and contacts the Overpayment Collection EW for review, review FCSS for start and stop dates of the placement in FCSS and in the CWS/CMS.
    1. If the start and stop dates are the same, document the findings in the CALSAWS case notes and provide a copy of the invoice to the Overpayment Collection ES to verify the findings and void the invoice.
    2. If the start and stop dates are not the same, advise the OHC provider of the results and determine if the OHC provider wants to dispute the collectability of the overpayment through an informal County hearing or through the State Fair Hearing process indicated on the NOA.

Overpayment Collection Eligibility Supervisor (ES) Responsibilities

  1. Discuss any concerns regarding communication and collection from the agency OHC provider with EW.
    1. Contact the agency OHC provider after sixty (60) calendar days if no response has been received from agency after collection process has been initiated.
    2. If, after one (1) business week, contact with OHC provider has not been established, contact the Contracts section for assistance.
    3. The Contracts Compliance section may be able to provide additional contact information for the OHC provider or establish direct contact to address the overpayment collection.
  2. Assign and re-assign agencies and RFH (that will only receive overpayment notice letter) to the overpayment collection EWs.

When an Overpayment is Determined to be Uncollectable

The following actions are to be taken when an overpayment is determined to be uncollectable as stated in the Management Directive 11-03.

Overpayment Collection EW Responsibilities

  1. If the overpayment is uncollectable, take corrective budget actions to completely eliminate the recovery account by:
    • Updating comments in CalSAWS.
    • Submit supporting documentation to the Overpayment Collection ES for review to verify that the overpayment is uncollectable and to void the recovery account, if the uncollectable overpayment determination is confirmed.
  2. If the overpayment is uncollectable due to a County administrative error, or due to exclusions for non-agency overpayment request numerals 2 or 3 described above, send the Department Approved Overpayment Notification Letter to the non-agency OHC provider which informs the provider that they have no legal or other obligation to return the overpayment, and that failure to return the overpayment will not result in any adverse action against the provider and any child living in the home. If the non-agency OHC provider contacts the county seeking to make full or partial repayment of the overpayment, the Script Protocol is to be recited by Department staff for further instructions and clarification to the non-agency OHC provider. If the non-agency OHC provider still requests to voluntarily repay all or a part of the overpayment after being advised of their legal rights not to do so per the script protocol, the Repayment Confirmation Agreement Letter is to be sent to the OHC provider and arrangements may then be made to receive whatever amount of the overpayment that the non-agency OHC provider wishes to return to the county.
    • This does not apply to agency OHC providers.
    • The department must not take any further action against the non-agency OHC provider if they do not respond to the Overpayment Notification Letter.

Overpayment Collection ES Responsibilities

  1. Upon receipt of an uncollectable overpayment determination, complete the following:
    1. Review the supporting documentation.
    2. Change the recovery account status code from 'New' to 'Void'.
    3. Return the voided recovery account documentation to the Overpayment Collection EW for filing.

Determining If the Overpayment Is Uncollectible from a Non-Agency OHC Provider

Overpayment Collection EW Responsibilities

  1. If the overpayment has been determined to be uncollectible the Notice of Action (NOA) form is not to be sent to the caregiver.
    1. The EW will ensure that the documentation required is reviewed and prepared to be able to void the recovery account in CALSAWS (HL to Management Directive to 11-03).

OHC Provider Responds to an Overpayment Notice with Cash, Check or Money Order

Overpayment Collection Clerk Responsibilities

DCFS has collections accounts that provide timely deposits of collected revenue and eliminates the risk of loss of funds. This is an interdepartmental collaboration with the TTC and DCFS.  The accounts are known as the Sweep Accounts for Overpayment Collections.

Payments are received in the following manner:
  1. Cash
    1. If cash is received, ensure that a non-vested designee witnesses the amount and receipt.
      1. All cash transactions will be witnessed and verified by staff with non-vested interest (It is illegal to photocopy cash).
    2. The cash and a copy of the receipt are sent to the Deposit Unit to continue with deposit process.
  2. If paid by check or money order, confirm the following:
    1. The amount indicated is the same in the written section and the dollar amount section.
    2. Confirm that it is signed.
    3. Checks/money orders should be made payable to DCFS and/or County of Los Angeles.
      1. If check/money order are delivered in person by the OHC provider, a receipt with the paid amount is to be issued.
    4. Verify the amount of the check/money order matches the amount of the recovery account in CALSAWS.
      1. If the amount doesn’t match or a case number for the overpayment is unknown, consult with the EW assigned to the agency to provide the correct information.
  3. Initial the check or money order when the information is verified.
  4. Complete the payment check log by annotating the following:
    1. Date received
    2. Payee
    3. Recovery Account
    4. Check date
    5. Amount submitted.
  5. Endorse, by stamping all checks and money orders ‘for deposit only” immediately.
  6. Photocopy and print two (2) copies of the check or money order and stamp them with the date received, attach any documentation received from the OHC provider.
  7. Deliver the two (2) photocopies to the Collection Posting Clerk for further process.
  8. Submit the endorsed checks to the Administrative Assistant to prepare for deposit.

Overpayment Collection Posting Clerk Responsibilities

  1. The posting clerk is to input the following information in CALSAWS:
    1. Recovery Account number
    2. Recovery amount
    3. Vendor Number
    4. Select the responsible part in the Recovery Account.
  2. Returns the posted check(s)/money order(s) to the Overpayment Collection Clerk.
  3. Enter/post payments to the Automated Overpayment Collection System.
  4. Forward the copy of the check(s)/money order(s) to the appropriate Overpayment Collection EW.

Administrative Assistant Responsibilities

  1. Verify the payment control log with the cash, check(s) and/or money order(s) received.
  2. Prepares the cash deposit forms.
  3. Deliver the cash, checks, and deposit forms to the Finance Deposit Unit.

Reconciliation

Staff Responsibilities

  1. Print the Cash Receipt Log from the Cash Management System (CMS).
  2. Reconciles the CMS report to the Cash deposit log.
  3. Overpayment ES receives and reviews the following documents:
    1. The Cash Deposit Form
    2. The Payment Check Log
    3. The Cash Management System (CMS) Log.
  4. Overpayment ES signs and dates the documentation to submit to the ASM for final approval.
    1. If any discrepancies are found, the Overpayment ES returns the documentation to the AA for corrections.

OHC Provider Responds to a Collectable Overpayment Notice with a Written Repayment Plan

Overpayment Collection EW Responsibilities

  1. When the County and caregiver reach a mutually agreed upon repayment plan solely related to overpayments of aid when the child was not in the home:
    1. Access CalSAWS and review the specific ledger and statement.
    2. Enter the status and comments.
  2. Complete and sign the Voluntary Repayment Agreement. Ensure the provider reviews and signs the voluntary agreement.
  3. Set a reminder to track the receipt of all agreed upon monthly payments.
    1. There are no State Appeals Hearing rights regarding overpayments made to foster care providers, including GHs, STRTPs and FFAs where the claimant entered into a voluntary repayment agreement.

OHC Provider Responds to a Collectable Overpayment Notice with a Written Request for an Informal Hearing and or State Fair Hearing

Informal Hearing Process

Administrative Assistant Responsibilities

  1. When an Informal Hearing Request is received:
    1. Access the Hearing Control Log entering the status and comments.
    2. Forward the Informal Hearing request and any attached supporting documentation to the ES for review.
  2. Contact the provider to agree with schedule date, time and location of informal hearing.
  3. Mail a written notice to the OHC provider not less than ten (10) days prior to the hearing date, the following information shall be provided:
    1. Schedule date
    2. Time and location
    3. Informal heading designee's contact information.

Administrative Services Manager (ASM) Responsibilities

Upon receipt of an informal hearing request from the OHC provider:
  1. Request any supportive documentation from the Overpayment Collection EW that indicates the collectability of the overpayment.
  2. Review the overpayment documentation.
  3. Contact the OHC provider via telephone to conduct the informal hearing.
  4. Determine the collectability of the overpayment based on the informal hearing discussion and the documentation provided by the OHC provider.
    1. If it is determined that the overpayment is uncollectable, refer the overpayment account to the Collection ES to void the overpayment.
    2. If it is determined that the overpayment is collectable, continue with the collection process.
      1. The OHC provider has the option to file an appeal through a state hearing within ninety (90) days.

Collection ES Responsibilities

Upon receipt of an overpayment informal hearing resolution in favor of the OHC provider from the ASM:
  1. Void the overpayment recovery account in CALSAWS.
  2. Document actions taken in CALSAWS.
  3. Notify and return recovery account case and supporting documentation to collection EW for filing.

Informal Hearing

Designee Responsibilities

  1. The Informal Hearing designee will be a person designated by the County, knowledgeable in the subject area and will not be the person who made the initial overpayment decision or the person who supervised the person who made the initial overpayment decision.
  2. At the time of the Informal Hearing the Informal Hearing designee will discuss with the provider and will be limited to considering the following:
    1. The informal hearing will be limited to consideration of the correctness of the initial overpayment determination for any foster provider. If the foster provider is a Foster Family Home, Relative Home, NERFM or non-related Legal Guardians, the Informal Hearing designee will determine whether any of the following conditions in CDSS EAS 45-304.123 exist: in Section 45-304.123:
      1. The overpayment was the result of a County Administrative error.
      2. Neither the County nor the provider was aware of the information that would establish that the child was not eligible for foster care benefits in the provider’s home.
      3. The provider did not have knowledge of, and did not contribute to the cause of the overpayments.
  3. If asked by the provider or questions arise regarding voluntary repayments, the County may discuss methods of voluntary overpayment recovery, as appropriate.
  4. After the hearing, the County employee who conducted the informal hearing will prepare a letter, which contains the decision on each issue considered at the informal hearing and set forth all regulations, which support the written decision. The decision will be mailed to the provider.  The written decision will also inform the provider that they can appeal the informal hearing decision at a formal state fair hearing. A copy of the written decision will be retained in the overpayment case.
  5. When an informal hearing is requested, it suspends the 90 days period the provider has to request a State Fair Hearing. Therefore, when the written decision regarding the informal hearing is mailed, it restarts the time period for a request for a State Fair Hearing.  The provider will have 90 days to request a State Fair Hearing from the date of mailing of the decision.  Therefore, DCFS needs to assure that the date of mailing is accurately recorded either by proof of service or verification that the decision was placed in the U.S. mail on a specified date.
  6. If a provider requests an informal hearing and withdraws or fails to appear at the informal hearing, the provider will have 90 days from the date of withdrawal or failure to appear, whichever occurs first, to request a State Fair Hearing (CDSS EAS 45-306.3).
    1. If the Informal Hearing designee receives a telephone call or a letter withdrawing the request for informal hearing, the Informal Hearing designee will send a confirming letter regarding the telephone call or receipt of the letter. The letter will also include a statement that the    provider will have 90 days from the date of withdrawal to request a State Fair Hearing.
    2. If the Informal Hearing designee sets a hearing and the person fails to appear at the set time, date and location, the Informal Hearing designee will attempt to contact the provider by telephone after waiting 45 minutes for their appearance. If the party is reached, the Informal Hearing designee can determine good cause and re-schedule the hearing. If the party is not reached, the Informal Hearing designee will issue a letter. The letter will indicate that an informal hearing was scheduled on the set time, date and location and will attach the notice issued. The letter will further state that the failure to appear concluded the informal process and that the provider will have 90 days from the date of failure to appear to request a State Fair Hearing.

Formal State Fair Hearing Requirements

  1. The foster care provider can request either or both the informal hearing and State Fair Hearing. The staff tracking the administrative rights of the foster care provider will consider the following, prior to determining the regulatory hearing processes have concluded.
    1. No Request Received for Either Informal or State Fair Hearing: If the foster care provider never requested review of the County determination on an overpayment, either by informal hearing within 30 days of mailing the NA 1261 or a State Fair Hearing within 90 days of mailing the NA 1261, upon the 92nd day, the overpayment is identified and the providers time frame to request review has lapsed and the overpayment is collectible.
    2. Request for Informal Hearing: If the foster care provider requests an informal hearing.  See Informal Hearing designee above in steps 5 and 6.  If no State Hearing is requested within 90 days of the issuance of the Informal Hearing Decision, 90 days after withdrawal or 90 days after failure to appear at the informal hearing, the overpayment will be identified for collection on the 92nd day, the date the overpaid provider exhausted administrative processes.  
    3. Request for State Fair Hearing after Receipt of Decision in Informal Hearing or absent a request for Informal Hearing: If an informal hearing is requested and conducted, the 90 days period to request a State Fair Hearing is suspended until DCFS issues an informal decision after hearing. The person requesting the informal hearing will have 90 days from the date the decision is mailed to request the State Fair Hearing. (See steps 5 and 6 above.)
    4. DCFS can verify with the DCFS Appeals State Hearing Unit if they have received a request for State Fair Hearing and if so, what date occurred.
      • If a State Fair Hearing has been requested, the amount is not collectible until the administrative process is exhausted. DCFS must await the decision of the Administrative Law Judge and proceed, as ordered.
      • If no request for a State Fair Hearing has occurred, the administrative process will be considered exhausted on the 92nd day, and the overpayment will be identified and collectible.

No Response to a Collectable Overpayment is Received from a OHC Provider

Overpayment Collection EW Responsibilities

  1. At the control date (30 days), (see step 4 on page 8), if the provider does not return the overpayment, enter into a mutually agreed-upon repayment plan, or has not requested an Informal Hearing. (If the provider requested an Informal Hearing, see Informal Hearing Designee Responsibilities, Informal Hearing Request above.)  Call the agency and continue to make additional attempts to voluntarily resolve payment issue(s), during the 90-day period.  Do not discuss with the agency State Fair hearing rights.  If questions are asked, refer them to the NOA 1261 and any other documents, issued regarding their rights to dispute the overpayment.
  2. If the provider has requested a 30 day Informal Hearing, contact the person designated to hear the matter regarding the date set. Thereafter, request the date the hearing decision was mailed to the foster care provider.  Set a 90-day control date, from the date of mailing to determine if the provider requests a State Fair hearing.
  3. If no Informal Hearing was requested, await the control date of 90 days, to determine if the provider returns the overpayment, enters into a mutually agreed upon repayment plan or requests a State Fair Hearing. If by the 92nd day, there is no request for review of the County overpayment, the amount(s) will be deemed collectible and identified.  (If the provider did request a State Fair Hearing, see Formal State Fair Hearing Requirements on page 14.  Do not process collection until exhaustion of the administrative hearing process or the foster provider determines to enter a voluntary agreement.)
  4. If payment issue is not resolved and administrative due process has lapsed or been exhausted, 92 days from the date of mailing the NA 1261 or two (2) days after the exhaustion of administrative due process, the overpayment is now identified and an aid claim adjustment for the federal share is required. The overpayment is now collectible and no further options to dispute the County determination of overpayment are required.  The County can collect under the involuntary processes set forth in CDSS EAS 45-305.3, if the provider continues to refuse to enter into a voluntary repayment plan.
    1. Upon the 92nd day, two days after the date the overpaid provider’s time frame to request administrative review has elapsed, the overpayment is considered identified. The County will remit the federal share to CDSS no later than 20 calendar days after the end of the month in which the overpayment was identified by making an aid claim adjustment in the amount equal to the federal share.
    2. For voluntary repayment by any type of foster care provider, see repayment plan.
    3. For involuntary repayment for foster family homes, relative homes, NERFMs and non-related legal guardianships. These actions will only be used when voluntary agreements to repay have failed or there has been a failure of repayment under the provisions of a voluntary agreement.  Below is the priority of involuntary collection.
      1. Grant adjustment. The overpayment is due to aid paid when the child was not in the home of the provider agency (CDSS EAS 45-304.122).  The subject child remains in the home or agency of the foster care provider.  Grant offset is not available when the provider is caring for different children other than the child for whom the overpayment was assessed.  DCFS can deduct no more than 10% of the total monthly grant, each month (CDSS EAS 45-305.321).
      2. Collection of interest. Interest will be calculated based on principal and interest of 5 percent of the annual income prorated on a monthly basis, with simple interest on the overpayment amount based on the Surplus Money Investment Fund.  Interest cannot be collected if it will cause financial hardship for the provider to provide adequate care.  Interest cannot be collected if 1) the payment was made to meet the child’s needs while the child was absent from the home; 2) the overpayment was the fault of the County; or 3) the provider did not contribute to the overpayment.  (See CDSS EAS 45-305.331-332.)
      3. Civil Judgment. If the provider fails to comply with a voluntary agreement, a demand for repayment and a grant offset is not available as the provider is no longer providing services to the child for whom the overpayment was assessed, the County will, unless the costs exceed the amount of the overpayment by instigating civil action, obtaining a judgment, recording abstract of civil judgment, executing a civil judgment or providing the information that the cost of the above described actions will exceed the amount of the overpayment to allow for a Director’s Write-Off of the amount.  (See MD #11-03, dated 11/10/11).
    4. For involuntary repayment for Group Homes and Foster Family Agencies. These actions will only be used when voluntary agreements to repay have failed or there has been a failure of repayment under the provisions of a voluntary agreement.  The County is to follow the priority of involuntary collection procedures set forth in Administrative Standards for Eligibility and Assistance Programs AFDC-Foster Care Rates (EAS), Section 11-402.66.  Per MPP 45-305.34, the term “County” in MPP 11-402.66 (and sub-sections), is to be substituted for the word “Department” wherever it appears in MPP 11-402.66.  The priority of collection processes for Group Homes and Foster Family Agencies is as follows:
      1. Lump sum payment. The GH/FFA can choose one payment or the GH/FFA re-payments over a 12-month period.  No interest to be assessed if an amount under $100,000 is paid in 6 months.  No interest to be assessed if an amount over $100,000 is paid in 12 months.  From the date of the executed agreement, interest shall not be assessed.  If this is a self-reported overpayment by the FFA or Group Home and 30 days have not elapsed, the FFA or GH has the right of reconciliation.  If they fail to reconcile the self-reported overpayment within the 30 days period pursuant to 11-402.632(a), speak to county counsel regarding additional activities required by the FFA or GH.  Have the county counsel review the regulations and the attempted at reconciliation, prior to determining the GH/FFA was provided the opportunity to reconcile the “overpayment” amount in the audit and failed.  A group home provider who fails to reconcile in accordance with Section 11-402.632(a)(1) shall be subject to Sections 11-402.3, 11-402.5, and 11-402.6.  This is satisfied by the pre-exit and final exit conference provided by the Auditor Controller’s Office.  Further, the County can use a balancing process whenever an amount is owed to a provider by crediting the amount owed towards repayment of a sustained overpayment.  (CDSS EAS .11-402.662).
      2. Demand for repayment agreement. 30 days after overpayment is identified or 30 days from the postmark date of letter notifying the GH/FFA of the demand for overpayment agreement, after the informal hearing and State Fair Hearing processes have completed, either by actual hearing in favor of DCFS or failure of the GH/FFA to request either hearing, the GH/FFA can enter into a repayment agreement. This agreement is required to contain specific language set forth in CDSS EAS 11-402.663 (a) thru (g).  The repayment agreement will set forth a repayment schedule to repay amounts, which include interest, not to exceed a 9-year period.  Interest begins to accrue on the date of issuance of the audit report containing the overpayment amount.  The minimum monthly amount, including interest, will be 3% of the program’s monthly income.  Interest will be based on simple interest calculations (see calculations set forth in CDSS EAS 11-402.663(c)1-3).  This agreement may be re-negotiated if it results in severe harm to children in placement and specified conditions exist (conditions set forth at 11-402.663(g) 1 & 2).  (CDSS EAS 11-402.663).
      3. Mandatory repayment agreement. When the GH/FFA provider fails to enter into the repayment agreement in the above bullet or there are three (3) outstanding payments on a repayment agreement before the overpayment is repaid, the County can set forth a mandatory repayment agreement in accordance with WIC 11466.22(d)(4).  The requirements and the amount can be raised to an amount which will assure it is repaid in seven (7) years.  Otherwise, the repayment period is not to exceed seven (7) years, minimum monthly amount will be 5% of the monthly income, including interest, and can be collected by offsetting against the current group home provider reimbursement rates (CDSS EAS 11-402.664).
      4. Administrative offsets MPP 45-304.33, the County will employ an offset to the administrative portion of subsequent payments by the method noted MPP 45-305. (See Section J. step 4.c. above).
      5. Additional Action/Supplements to Rate. In addition to the collection process in the 2nd bullet under d. on page 17, when a GH/FFA is subject to mandatory repayment the following requirements apply; a) In addition to the repayment reduction of 11-402.664, 50% of any California Necessities Index (CNI) increases and any adjustments to the Standardized Schedule of Rates in the AFDC-FC program will be withheld and applied and b) The GH/FFA program will be ineligible to receive program change that results in an increased rate classification level (RCL) until the amount is recovered or a waiver is granted by CDSS.  (If waiver granted and an increased RCL occurs, it will be subject to 11-402.664 recovery amounts.  (See CDSS EAS 1-402.665 and contact county counsel for assistance.)
      6. Additional Action/Certificate against real or personal property of group home. In addition to collection processes, the County may also file a certificate against the real or personal property of a group home provider, in accordance with WIC 11466.33.  The code section contains multiple requirements to review, prior to making the determination to file a certificate.  If all requirements are met to file the certificate, it is to be filed with the County Clerk.  The County Clerk may then file a lien against the property.  The County may bring action within a 10-year period and seek judgment, allowing for the filing of an abstract of judgment.  (See CDSS EAS 11-402.666.)
      7. Additional Action/County action impacting RCL Rate. This section (in conjunction with .668) indicates contact can be made with CDSS regarding the GH/FFA’s failure to repay an overpayment and request termination of the RCL.  If DCFS determines to take this action, DCFS should only do so after the provider’s due process has completed in favor of the County by State Fair Hearing or civil judgment. The Initial Statement of Reasons, issued with the emergency regulations, limit the action of the County to “collection”.  Contact with County Counsel should occur to determine if this action could occur and assure that the requirements of CDSS EAS 11-402.667 have been met.
      8. Additional Action/County request for RCL rate termination. The County, DCFS, does not have the right to act in the capacity of CDSS for the purpose of terminating a Group Home or Foster Family Agencies’ rate as indicated in CDSS EAS 11-402.3.393 and 394.  As indicated in the bullet above, the County could request CDSS to consider terminating an RCL rate in conjunction with its collection actions.  The Initial Statement of Reasons issued with the emergency regulations limit the action of the County to “collection.”  Contact with County Counsel should occur to determine if this action could occur and assure that the requirements of CDSS EAS 11-402.668 have been met.
  5. CONTRACTUAL REMEDIES, in the event CONTRACTOR does not return payment, or enter into an agreement for payment on a mutually agreed upon timeframe:
    1. Prepare a recommendation to place the home on “Hold”/”Do Not Refer: (DNS/”Do Not Use” (DNU) and submit to the manager for approval process to the Director of DCFS. (See Foster Family Agency or Group Home Contracts regarding the process for “Do Not Refer.”)
    2. In the event CONTRACTOR does not return an Overpayment, either under the terms of a voluntary agreement or under the terms of an involuntary repayment agreement after exhaustion of due process in favor the COUNTY, COUNTY may place a Hold Status, DNR Status, DNU Status, Corrective Action Plan.
    3. COUNTY will provide written notice of its intention to place CONTRACTOR on a Hold/DNR/DNU Status at least 15 days in advance.
    4. COUNTY will notify CONTRACTOR in writing within 72 hours of DCFS’ decision to place CONTRACTOR ON Hold/DNR/DNU.
    5. Verbal notification of such actions will be provided prior to or at the time of CONTRACTOR’S placement on Hold/DNR/DNU Status to the extent possible.
      1. When Hold/DNR/DNU status is recommended, the written notification letter will include the reason(s) for placing Contractor on Hold/DNR/DNU. It will also invite Contractor to participate in a Review Conference to discuss the COUNTY’s decision and include a deadline by which the CONTRACTOR must indicate its intent to participate in the Review Conference. Fax the notification to the GH/FFA, keeping a copy of the confirmation of receipt of FAX.

Director’s Write Off of Non-Title IV-E

  1. If it is determined after review with the TTC and obtaining documentation supporting the lack of collection that a Director’s Write-Off would be appropriate, staff shall:
    1. Complete and submit the DCFS 807 (Attachment C), for those accounts received from TTC.  and attach all supporting documentation.
  2. The DCFS 807 and supporting documents are submitted to the Fiscal Operation Division (FOD), Fiscal Monitoring & Special Payments Manager for review and approval and then transfer to the Departmental Finance Manager III.
  3. The FOD, Departmental Finance Manager III will then seek approval through the chain of command, including the Director for final approval of the Non-Title IV-E overpayment write-off.
    1. The Departmental Finance Manager III will review/approve and sign the documents.
    2. The documents will then be forwarded to the Administrative Deputy, Chief Deputy Director and then to the Director to review and approve by signing all documentation.
    3. The signed/approved documents will be returned to the FOD, Fiscal Monitoring & Special Payments manager for filing.
  4. The DCFS 807, once approved, shall be given to the FOD, Claiming & Revenue Section to include the uncollectible amount in the monthly report to CDSS.
  5. Make sure a copy of the DCFS 807 and documentation is retained for five (5) years in storage for future reference.
HELPFUL LINKS

Forms

NA 1261 – Overpayment Notice of Action for Group Homes and Foster Family Agencies

NA 1261A – Overpayment Notice of Action for Approved Relatives, Non-Relatives Extended Family Members (NREFM), Foster Family Homes, Non-Related Legal Guardians (NRLG), Non-Minor Dependents (NMD) Residing in a Supervised Independent Living Program (SILP)

NA 1261B – Overpayment for Kinship-Guardianship Assistance Payment (Kin-GAP) Guardians

NA 791 – Adoption Assistance Program (AAP) Notice of Action

NA 1277 – Overpayment Notice of Action for Approved Relative Caregiver (ARC)

Department Approved Overpayment Notification Letter

Repayment Confirmation Agreement Letter

Script Protocol

REFERENCED POLICY GUIDES

E020-0510, Eligibility Determination for Financial Participation

E030-0520, Redetermination of AFDC-FC Eligibility

E030-0540, Extension of Foster Care Beyond Age 18

E050-0510, Non-County Welfare Department Eligibility Kinship Guardianship Assistance Payment (Kin-GAP) Program

E050-0515, Kinship Guardianship Assistance Payment (Kin-GAP) Program Redetermination/Reassessment

E050-0560, Adoption Assistance Program (AAP) Freed Child and AAP Intake

E050-0562, Adoption Assistance Program (AAP) Reassessment/Post Adoption

E050-0564, Adoption Assistance Program (AAP) Payment Resolution

E050-0565, Extended Adoption Assistance Program (AAP) Beyond the Age of 18

STATUTES AND OTHER MANDATES

All County Letter (ACL) 14-86 - Provides counties with information and instructions regarding the Approved Relative Caregiver (ARC) Funding Option Program (hereinafter referred to as the ARC Program) enacted by SB 855. The SB 855 is the budget trailer bill signed into law by Governor Brown on June 20, 2014; the ARC Program provisions are contained in W&IC section 11461.3. The purpose of this program is to make the amount paid to an approved relative caregiver for the care and supervision of a child who is under the jurisdiction of the California juvenile court—and who is ineligible for Aid to Families with Dependent Children-Foster Care (AFDC-FC)—equal to the basic amount paid on behalf of such a child who is eligible for AFDC-FC.

ACL 15-07 - purpose of this ACL is to direct counties and providers on the proper use of the new and revised overpayment Notice of Action (NA) forms. The California Department of Social Services (CDSS) has updated the NA 1261 form addressing overpayments paid to Group Homes (GHs) and Foster Family Agencies (FFAs) and has developed the new NA 1261A form for overpayments paid to licensed, approved family homes and Non-Minor Dependents (NMDs) residing in a Supervised Independent Living Setting (SILS). The newly developed NA 1261B form is to be used for addressing overpayments paid to Kinship-Guardianship Assistance Payment (Kin-GAP) guardians. These approved Foster Family Homes (FFHs) are defined for the purpose of overpayment collection as including an approved relative home, an approved home of a Non-Relative Extended Family Member (NREFM) and an approved home of a Non-Relative Legal Guardian (NRLG). The new and revised forms and their instructions are enclosed.

ACL 15-96 - The purpose of this ACL is to transmit, and to provide counties with information and instructions on, the newly developed Notice-of-Action (NA) forms for the Approved Relative Caregiver Funding Option Program (ARC Program). The ARC NA forms are to be used in conjunction with the California Work Opportunity and Responsibility to Kids (CalWORKs) NA messages M40-171D, M82-832E and M82-832F, which are described in ACL No. 15-54. These CalWORKs NA messages were revised due to the implementation of the ARC Program.

ACL 16-29 - The purpose of this ACL is to direct counties on the proper use of the revised Notice of Action [(NOA) NA 791]. This ACL also provides policy and procedures regarding the identification of an overpayment.

Eligibility Assistant Standards (EAS) 11 – 402.3 (.5) (.6) (.663 - .668) Group Home Rate Setting

EAS 45 – 302 - Outlines all payments options. 

EAS 45-304.1.11 - Outlines the AFDC-FC Overpayments for Foster Care Providers.

EAS 45-304.125 - Outlines the AFDC-FC Overpayments for Foster Care Providers in General.

EAS 45 - 305.3 (321) (331-332) – Outlines the collectible AFDC-FC Overpayments for Foster Care Providers; Methods of Overpayment Recovery.

EAS 45 – 306.3 - Outlines the Informal and Formal Hearing Procedures.

Senate Bill (SB) 84 - Discusses the Committee on Budget and Fiscal Review. Human Services existing Federal Law provides for allocation of federal funds through the Federal Temporary Assistance for Needy Families.

Management Directive (MD) 11-03 - Outlines the identification of uncollectible Title IV-E overpayments and the write-off policy on Title IV-E overpayments.

Welfare Institutions Code (WIC) Section 11004 - The provisions of this code relative to public social services for which state grants-in-aid are made to the counties shall be administered fairly to the end that all persons who are eligible and apply for those public social services shall receive the assistance to which they are entitled promptly, with due consideration for the needs of applicants and the safeguarding of public funds.

WIC Section 11404 - A child is not eligible for AFDC-FC unless responsibility for placement and care of the child is with the county welfare department or Indian tribe that entered into an agreement pursuant to Section 10553.1, the county probation department which has an agreement with the county welfare department, or a licensed public adoption agency, licensed private adoption agency, or the department.

WIC Section 11466 - Computation and Payment of Aid Grants.