DSL MEMO SERIES
2002-08
August 1, 2002
STATE OF WISCONSIN
Department of Health and Family Services
Division of Supportive Living
To:
Area Administrators/Assistant Area Administrators
Division Administrators
DSL Bureau / Office Directors
County Departments of Community Programs Directors
County Departments of Developmental Disabilities Services Directors
County Departments of Human Services Directors
County Departments of Social Services Directors
Developmental Disability Services Coordinators
Long Term Support Coordinators
Mental Health Coordinators
Mental Health Institutes
Office of Program Review and Audit
Substance Abuse Coordinators
Tribal Chairperson/Human Services Facilitators
From:
Sinikka McCabe, Administrator
Division of Supportive Living
Re: Handling Client Funds – A Best Practices Guide
Attached is a best practices guide for handling client funds. It was
developed primarily for use by county agencies that act as representative
payee and/or hold client funds.
The information for this guide came from a variety of sources including
county agency and board staff who handle client funds. The Office of
Program Review and Audit developed the guide at the request of the Bureau
of Community Mental Health and with the assistance of the DSL Grievance
Examiner.
Although this is a best practices guide (compared to a mandated
procedure), please note that Administrative Code HFS 94.25, Patient funds,
states the following:
"Except as otherwise provided under ss. 51.61(1)(v), Stats., a
patient shall be permitted to use the patient’s own money as the
patient wishes. A service provider holding funds for a patient shall
give the patient an accounting of those funds in accordance with ss.
51.61(1)(v), Stats.
For further clarification, please see ss. 51.61(1)(v), Stats., which is
also attached.
If your agency acts as representative payee and/or holds funds for any
of your clients, please copy and distribute this guide to your staff who
have any responsibility for client funds. You are also urged to include
the information in this guide in training for your staff, other persons
who act as representative payee for any of your clients, and contracted
providers for whom this information would be applicable.
Questions pertaining to the guide, HFS 94 and ss. 51.61, Stats., should
be directed to Michael A. Peters, DSL Grievance Examiner.
CENTRAL OFFICE CONTACT:
Michael A. Peters
DSL Grievance Examiner
Division of Supportive Living
1 West Wilson Street
P.O. Box 7851, Room 558
Madison, WI 53707-7851
(608) 266-6989 (voice)
(608) 264-9832 (fax)
peterma@wisconsin.gov
cc:
Consumer Organizations
NAMI Wisconsin
NAMI Wisconsin Local Affiliates
Wisconsin Coalition for Advocacy
Wisconsin Council on Developmental Disabilities
Wisconsin Council on Mental Health
Attachments
Handling Client Funds – A Best Practices Guide
Many county agencies and boards help clients manage their personal
funds. The guidance in this Best Practices Guide came from county agency
and board staff who handle client funds, department program and legal
staff, and from the Social Security Administrations’ Guide for
Organizational Representative Payees, which is online at http://www.ssa.gov/payee/index.htm.
You might find some suggestions to be particularly helpful, while you
might find that you are accomplishing the objectives underlying other
suggestions through other means. Perhaps you are doing something that
works particularly well for your organization and that others could
benefit from learning about. Please let us know.
Please note that Administrative Code HFS 94.25 pertaining to client
funds states that:
"Except as otherwise provided under ss. 51.61(1)(v), Stats., a
patient shall be permitted to use the patient’s own money as the
patient wishes. A service provider holding funds for a patient shall
give the patient an accounting of those funds in accordance with ss.
51.61 (1)(v), Stats."
Statements in this guide followed by an asterisk (*) are based on the
requirements in ss. 51.61(1)(v), Stats., (attached).
Handling Client Funds – A Best Practices Guide
- Policies and procedures
– Develop, maintain, and follow a
written policy and procedures for being a
representative payee for client funds consistent with the requirements
in ss. 51.61(1)(v), Wisconsin Statutes and Administrative Code HFS
94.25. Among other areas, your policy should include procedures for
determining whether or not your agency should assume this
responsibility; for transferring this responsibility to the client when
it is determined that he or she is capable of handling his or her own
funds;* and for terminating of an account upon the transfer or
death of a client.* Ensure that your staff follows up with the
Social Security Office to initiate any changes in payeeship that are
needed.
The policy should also include a procedure for determining whether or
not there is a family member or close friend who is available to be the
client’s payee, rather than having the agency automatically assume
this responsibility, as ss. 51.61(1)(v) gives preference to identifying
a representative payee who is "acceptable to the client or his or
her guardian."*
Prior to your agency becoming representative payee for a client,
ensure that the client or his or her legal guardian has provided your
agency with his or her informed written consent to do so as specified
under HFS 94.03, Informed Consent.
These policies and procedures should indicate when they were adopted
and last modified. You should review policies and procedures annually to
ensure that they remain up-to-date and that they are consistent with
statutory or funding-agency requirements for handling client funds.
Ensure that all employees and other persons who handle your client’s
funds have the current guidelines.
- Training –
Train all staff involved in handling client
funds, including case managers, on their responsibilities. Invite other
persons who are representative payees for clients of your agency to
attend this training. Regularly discussing financial responsibilities at
staff meetings can be helpful in ensuring that all staff understand your
policies and procedures for handling client funds.
- Bonding
– Ensure that all staff and other persons who handle
your client’s funds are bonded to handle monetary transactions on
behalf of your clients. Employees who handle client funds may be covered
under the county agency’s or board's general bond.
- Background checks
– Perform criminal background checks on
staff and other persons who handle your client’s funds.
- Segregation of duties
– Segregate duties for people handling
client funds to ensure that the same person does not request payments,
authorize the payments, maintain records, and reconcile client accounts.
- Back up
– Ensure that you have back-ups for key staff involved
in the approval process if the designated person is unavailable.
- Budget
– Establish a budget for each client account, and have
clients and guardians sign the budgets. Budgets may be a requirement by
an oversight agency, such as the Social Security Administration.
However, budgets can be a good control mechanism for all client fund
accounts.
- Recordkeeping and reporting –
Maintain written records of
client’s funds, and provide written periodic (monthly, quarterly or
annual) reports detailing receipt and expenditures of funds.* Provide a
copy of the report to clients, guardians, agents or designated
representatives.* Use computerized or manual forms to track how much
money comes in, how it is used, and the balance for each client. Case
managers should document their activities involving client funds in case
notes, just as they do for the clinical side.
- Separate, interest bearing account
– Keep client funds
in a separate account, so that you do not co-mingle client funds with
agency funds.* The account should be interest bearing if practical and
possible. Disburse all interest to client accounts using a weighted
average method.*
Some agencies use a collective account for all client funds while
maintaining records of individual balances. The higher overall balance
in the collective account offers advantages such as being able to earn
higher interest and avoid check fees associated with accounts with
smaller balances.
- Direct deposit
– Encourage direct deposit if available.
- Disbursements
– Use pre-numbered receipts for cash and
check disbursements, and require a supervisor’s written approval prior
to a disbursement. Avoid cash disbursements, but if you do allow cash
disbursements, limit them to a nominal amount ($25 - $50). Some agencies
issue a voucher to a particular store for a specific item, which
eliminates the need for issuing cash or a check to the client.
- Reconciliations
– Reconcile each client’s account on
a regular basis (monthly recommended). Monitor accounts to ensure that
individual client balances do not exceed maximum amount established by
the granting or regulatory agency and that they are not overdrawn. The
person who does the reconciliation should not be involved in the
disbursement process.
- Record retention
– Keep records for at least three years, and
longer if required by an oversight agency.
- Audit
– Have someone who is independent of the client funds
business unit perform an audit of client accounts. Audits should be done
at least annually and when key staff leave their positions. The agency’s
internal auditor may perform audits. In addition the independent auditor
will look at some aspects of the client funds process as part of the
annual single audit.
Subsection 51.61(1)(v), Wisconsin Statutes reads as follows:
- Have the right to use his or her money as he or she chooses, except
to the extent that authority over the money is held by another,
including the parent of a minor, a court-appointed guardian of the
patient’s estate or a representative payee. If a treatment facility
or community mental health program so approves, a patient or his or
her guardian may authorize in writing the deposit of money in the
patient’s name with the facility or program. Any earnings
attributable to the money accrue to the patient. The treatment
facility or community mental health program shall maintain a separate
accounting of the deposited money of each patient. The patient or his
or her guardian shall receive, upon written request by the patient or
guardian, a written monthly account of any financial transactions made
by the treatment facility or community mental health program with
respect to the patient’s money. If a patient is discharged from a
treatment facility or community mental health program, all of the
patient’s money, including any attributable accrued earnings, shall
be returned to the patient. No treatment facility or community mental
health program or employee of such a facility or program may act as
representative payee for a patient for social security, pension,
annuity or trust fund payments or other direct payments or monetary
assistance unless the patient or his or her guardian has given
informed written consent to do so or unless a representative payee who
is acceptable to the patient or his or her guardian and the payer
cannot be identified. A community mental health program or treatment
facility shall give money of the patient to him or her upon request,
subject to any limitations imposed by guardianship or representative
payeeship, except that an inpatient facility may, as a part of its
security procedures, limit the amount of currency that is held by a
patient and may establish reasonable policies governing patient
account transactions.
Return to Info Memos Index
|
