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This topic contains information on the following subjects:
1. An overview of the ACTS accounting system;
4. Calendar month distribution;
5. Special processing for income withholding and Interstate payments;
6. Distribution/disbursement for Foster Care (IV-E/SFHF) cases.
At the most general level, the ACTS Accounting System performs the following functions:
1. Receives collections;
2. Disburses payments;
3. Keeps track of obligations; and
4. Provides a means to modify accounts in response to new information, changes in case circumstances, and identified errors.
When ACTS performs these functions, it creates "Financial Events" to keep a detailed historical record of the financial activities that have occurred for the cases and participants. These financial events can be made up of one or more "Financial Transactions" that give even more detailed information about the activities that have occurred.
When a payment is posted in ACTS, the system applies the funds from that payment to the appropriate case accounts. Then the system distributes the funds to the appropriate subaccounts (which were created when the caseworker entered extensions during the order establishment or modification process), and the funds are disbursed to the appropriate payee(s).
ACTS keeps a complete records of the payments, distributions, and disbursements that are made. These records can be accessed for a specific case, participant, payment, and/or disbursement.
ACTS processes daily collections during the nightly batch processing. These collections enter the Cash Receipts account when deposits are made to the State Treasurer’s bank account for CSE. These deposits consist of payments made to the NCCSCC operation by employers, NCPs, other states, local Clerks of Court, the military, and the Cherokee Tribal Court. Payments made to the NCCSCC are posted into ACTS through a nightly file transfer from NCCSCC to ACTS. The State Controller’s office certifies the deposit to the State Treasurer's bank account by accessing the receipts file from NCCSCC and verifying EFT transactions.
Nightly processing affects all collections that were posted during that business day as well as any funds from previous days that could not be processed due to "holds" or because there was insufficient information available in the system. Accounts on "hold" with a release date in the future are bypassed during nightly processing until the release date is reached.
A charging process also occurs each night, but it only affects certain cases on any given night, based on the charge frequency of that case's order. The following functions take place during this charging process: delinquency testing, account charging, and/or billing. The time that each of these functions is performed can also vary according to the case's charge frequency.
Under PRWORA, further distribution and disbursement occurred at the end of each calendar month. No money was disbursed to clients in active TANF cases until end-of-month processing was completed.
Now funds are disbursed according to the DRA distribution hierarchy, so a TANF client might receive support during the month for an "AFDC" case. Under DRA, the following rules govern the end-of-month distribution for TANF cases:
1. Collections are first applied to the current support that is owed during the current month. These funds are distributed to the State as a reimbursement of the current month's TANF grant (up to the amount of the URPA balance).
2. Any collected funds that are left over after the current support order has been satisfied is then applied to arrearages. These arrearages could have accrued after the court order was established, or they could have been entered as retroactive obligations at the time the order was established.
The manner in which collections for these arrearages are distributed depends on the distribution hierarchy. Once current support is satisfied, the excess collection is applied first to the subaccount that has a frequency amount due.
Once the arrears frequency amount is satisfied, the distribution of additional funds depends on the next subaccount balance in the hierarchy. If that subaccount balance is owed to the client, funds are disbursed to the client when they are received. Once that subaccount balance is satisfied, any remaining funds are disbursed based on the amount of the arrearages and the client's URPA balance.
Any collections toward PA arrearages are distributed to the State and also serve to reduce the client's URPA balance as well as the arrearage balances. When the client's URPA balance equals "$0.00", collections toward PA arrearages are distributed to the client. See Calendar month distributions below.
ACTS takes the following factors into consideration when distributing collections:
1. The monthly obligation amount. This is the amount of current support that the NCP is ordered to pay during the calendar month. For weekly orders, this is the weekly payment amount that is due multiplied by the number of weeks (4 - 5) in the month;
2. The distribution hierarchy: current support, arrearages with a frequency amount, arrearages with no frequency amount.
3. The amount of any payments from the NCP that are collected during the calendar month. The effective date of a payment determines the calendar month to which that payment is applied;
4. For active TANF cases, the grant amount for the calendar month and the amount of the URPA balance.
For distribution purposes, ACTS considers any amount that is collected during the calendar month and that is equal to or less than the monthly obligation as payment for CURRENT SUPPORT (up to the amount of the URPA balance). ACTS considers any collected amount that is in excess of the monthly obligation as payment for a PRIOR month’s debt. When all prior months' debts have been satisfied, any excess funds are held as "future money" in the NCP's account.
ACTS distributes collected funds in the following manner:
1. Under PRWORA, the State/Federal government retained all collections for TANF, IV-E, and other Public Assistance cases, until the total URPA/URPF balance (URPA + Current Months Grant) equaled "$0.00". ACTS made no distinction between current support and arrearage payments, and no distinction was made based on the date of collection. Once URPA/URPF was "$0.00", any collected funds that remain were disbursed to the client. Under DRA, funds that are collected for TANF cases are distributed according to the distribution hierarchy (current support first, then arrearages with a frequency amount due, and last arrearages with no frequency due). Therefore, based on the distribution hierarchy, a TANF client could receive a child support payment during the month, regardless of whether or not an URPA balance or AFDC balance exists. Payments in excess of the current support and arrearage balances are held as “future money” at the NCP’s account level.
2. Collected payments for cases with clients who are currently NOT receiving Public Assistance are distributed in one of the following ways:
A. For cases that have NEVER been Public Assistance (PA), the client/family gets all collections that are in excess of the mandatory $25 fee for CSE services that is assessed annually. Collections are applied to the "FEE" subaccount (if the annual fee is assessed), to current support, and then to arrearages.
B. For cases that HAVE been PA in the past:
1.) The client receives all payments towards current support for the calendar month and towards Non-Public Assistance (NPA) arrearages, according to the distribution hierarchy.
2.) Once all arrearage balances that have a higher priority in the hierarchy are $0.00, the State receives payments towards PA arrearages until the URPA balance reaches "$0.00". Then the client receives any collections towards the PA and other remaining arrearages.
For cases that are coded "NPA", the monthly obligation amount, the frequency amount on an arrearage subaccount, and the amount that is collected control the distribution calculation. ACTS distributes all current support and arrearage payments that is paid directly to the case's payee within two (2) business days of receipt by N.C. agency.
If an URPA balance exists from the time when a case was a PA case, ACTS holds any payments that are distributed to a PA arrearage subaccount until the end of the calendar month. At that time, collections are compared with the client's URPA balance in order to determine the actual distribution of the collection.
ACTS maintains two separate sets of balances at each subaccount level. One set of balances tracks court ordered arrearages and delinquency (charging balances, frequency due, period amount due, etc.) The other set of balances tracks the distribution of funds for calendar month obligations (calendar month obligation due, distribution balances, etc.) The nightly distribution process distributes funds, based on the distribution balances and the calendar month obligations that are due.
The month-end subaccount initialization process sets up the calendar month obligations of each subaccount for the distribution of money during for the following month. The charging process sets up new period amounts due and past due balances, based on court-ordered charging cycle dates.
If the case changes from PA to NPA and distributions have already occurred in that calendar month PRIOR TO the case type change, ACTS notifies the responsible CSE caseworker. Caseworkers then review the distributions for that case. If a court order modification is made that affects CSUP calendar month distributions have already occurred in the calendar month prior to the order modification, ACTS also notifies the responsible caseworker. Caseworkers might need to request a manual adjustment to the distributions for the case.
In order for funds to be distributed and disbursed properly, the date when the NCP made the payment is recorded in ACTS. This date is called the "Payment Effective Date".
For over-the-counter payments and payments that are mailed directly from the NCP to the Clerk of Court, the effective date is the same as the date when the money is received in the office. However, for interstate and income withholding payments, the effective date is almost always prior to the date when the payment is received.
The effective date for an income withholding payment is the date when the money was withheld from the NCP's income. The effective date for an interstate payment that is not made through income withholding is the date when the NCP made the payment to the responding state. The responding state is required to provide this date to the initiating state.
Federal regulations require that income withholding and interstate payments be distributed and disbursed in precisely the same manner that they would have been disbursed if they had been posted on the date when the NCP made the payment. Recording the effective date allows the system to distribute and disburse money in accordance with Federal regulations.
ACTS processes payments that are applied to current support for IV-E (Foster Care) cases and cases with IV-E (Foster Care) subaccounts in the following manner:
1. For amounts up to the minimum boarding rate (regardless of the court-ordered amount), sixty-six percent (66%) is disbursed to the IV-E Federal Shares account and the remaining thirty-four percent (34%) is divided equally between the State agency and the applicable county agency. Funds to the county agency are transmitted to the County Finance Officer.
2. Any funds over the minimum boarding rate (up to the obligation amount) that is paid to the above entities are disbursed to the applicable county's DSS Director once a month.
Funds that are applied to IV-E arrearages are retained by the State to repay Unreimbursed Foster Care (URPF), if an URPF balance exists. These funds are divided between Federal, State, and local agencies, using the same percentages that were described in Step # 1.
ACTS processes payments that are applied to current support for SFHF (State Foster Home Fund) case in the following manner:
1. For amounts up to minimum boarding rate (regardless of the court-ordered amount), funds are divided equally between the State agency and the applicable county agency. Funds to the county agency are disbursed to the County Finance Officer.
2. Any funds over the minimum boarding rate are disbursed to the County Finance Officer.
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For questions or clarification on any of the policy contained in these manuals, please contact your local county office. |
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