Financial Management Services

Fiscal/Employer Agent Readiness Review

for

Veteran-Directed Home and Community-Based Services

Fiscal/Employer Agent Model of Financial Management Services

Complete this Readiness Review tool if the Veteran-Directed Home and Community-Based Services (VD-HCBS) program is implementing a Government or Vendor Fiscal/Employer Agent (F/EA) model of services. Explanations of those models of services can be found here.

Instructions

The Financial Management Services (FMS)Readiness Review has two purposes. The first is to help you as a program walk through thecomponents necessary to develop and implement FMS in a Veteran-directed program that features use of aflexible spending plan. The second purpose is to provide the Veterans Health Administration (VHA)with the reasonable assurance that you have the components developed to implement this important component of your veteran-directed program. Please answer each question completely as described. An excellent Readiness Review will provide a comprehensive overview of processes, parties involved in each process and the approach to monitoring quality of the process.

After completing this Readiness Review tool, submit it to Mollie Murphy of The National Resource Center for Participant-Directed Services (NRCPDS) at . Staff at the NRCPDS will review your completed Readiness Review tool. After reviewing the tool, an NRCPDS staff person will contact you to schedule a meeting to discuss your responses.

The NRCPDS staff conducting Readiness Reviews have all had programdesign and implementation experience, and may be able to help you troubleshoot issues that arise. Pleasenote that assistance is available to complete the Readiness Review through as well as individually from NRCPDS staff.

Mollie Murphy can be contacted with any questions or concerns about this Readiness Review. She can also be contacted with requests for technical assistance in Financial Management Services. Ms. Murphy can be reached at .

Involvement of Contractors

If you will be working with contracted entities to provide Financial Management Services in your program, we recommend that those contractors be involved in the completion of this Readiness Review. Additionally, contractors are encouraged to join the follow-up meeting with NRCPDS to review the Readiness Review tool.

Minimum Requirements

Some programs may be implementing programs on an accelerated timeline to accommodate Veterans in immediate need of services. Programs that fit that criterion are not required to answer certain questions before serving initial Veterans. Those questions marked with an asterisk (*) can be skipped during the initial Readiness Review, but must be completed within 60 days of serving the first Veteran. NRCPDS will follow up with those programs that do not complete questions marked with an asterisk (*).

Aging and Disability Network Agency monitoring the F/EA Services:

Entity Performing F/EA Services:

Will the F/EA Entity Use Any Contractors (e.g. payroll reporting agent)?

General

  1. What is the F/EA’s separate Federal Employer Identification Number used solely for purposes of operating as a Fiscal/Employer Agent under Section 3504 of the Internal Revenue Code?
  1. What liability does the F/EA take on under Section 3504 of the Internal Revenue Code?
  1. What Federal Revenue Procedure (s) will you use as a Fiscal/Employer Agent serving the VD-HCBS program?
  1. Has the F/EA operated as such for a participant-directed program in the past? Please describe.

Employer Enrollment

  1. Who is the employer of a Veteran’s directly hired workers?
  1. If a Veteran will directly hire his/her own direct care workers, what Federal, State and Local tax forms must the Veteran (or representative) employer complete?
  1. What must be in place/criteria met before a Veteran is authorized to receive services from a direct care worker?
  1. Does the F/EA play any role in providing information to the Veteran or representative on their role as the employer?
  1. In an F/EA model of services, Veterans (or their representatives) operate as common law employers of their own directly hired workers. What is the process for Veterans to obtain the paperwork necessary to serve as an employer? Will anyone help the Veteran complete requisite employer paperwork? If so, who? To whom (or what entity) will the Veteran submit completed employer paperwork?
  1. Are Veteran representatives permitted to act as the designated employer in the Veteran’s program? If so, under what circumstances?
  1. *In regard to employer tax forms, what must the F/EA do if a Veteran stops utilizing the program? This question does not apply to circumstances when the Veteran is temporarily suspended.

Employee Enrollment

  1. Who will determine what workers a Veteran hires?
  1. What is the process after a worker has been identified for possible employment?
  1. Will background or registry checks be performed on workers?
  1. If so, what type of background or registry check(s)?
  1. If so, what is the process if a worker has results on his/her background or registry check?
  1. How is a worker’s employment status (employee or independent contractor) determined?
  1. For tax exemption purposes, what is the importance of the worker’s family relationship with the employer?
  1. How is information for question 16 collected?
  1. If paid workers are part of the Veteran’s back-up plan, what is the process for enrolling back-up workers?
  1. How are employee rates of pay determined? What rules or regulations impact an employee’s rate of pay?
  1. Is overtime allowed for workers?

Non-Employee Goods and Services Vendor Enrollment

  1. Is Veteran use of non-employee goods and services vendors permitted in this program?
  1. What non-employee goods and services are permitted and what is the process to make that determination (this may involve the Veterans Affairs Medical Center or VAMC)?
  1. What forms must a non-employee goods or services provider complete?

Budgets

  1. How is Veteran budget and spending plan data delivered to the F/EA?
  1. How does the F/EA obtain information about an amended spending plan/budget?
  1. How is over and under spending identified?
  1. How is budget overspending prevented?
  1. What happens in a month when a Veteran does not utilize his/her complete budget?

Payments

  1. How are timesheets and invoices that are submitted for payment reconciled with the Veteran’s budget/spending plan?
  1. What is the process (work flow) for an employee to be paid? Who does what and when before a payment is issued to the employee?
  1. On what periodicity are employees paid? Does that periodicity meet state pay day and prompt pay regulations?
  1. Under what circumstances would an employee be denied payment?
  1. What happens if a Veteran authorizes an employee to work more hours than is covered by the Veteran’s VD HCBS budget/spending plan?
  1. What is the process for the Veteran to identify a good or service that he or she needs and ultimately obtain the needed good or service?
  1. What taxes are withheld from employee pay?
  1. What taxes are owed by the employer? What is the rate for each employer tax and how is it determined?

Managing Taxes & Insurances

  1. Describe the process and periodicity for depositing employee Federal Income Tax, and employer and employee FICA tax.
  1. Describe the process for meeting IRS filing requirements for employee Federal Income Tax, and employer and employee FICA tax.
  1. Describe the process for depositing employer Federal Unemployment Tax Act (FUTA) tax.
  1. Describe the process for meeting IRS filing requirements for employer Federal Unemployment Tax Act (FUTA) tax.
  1. What is the Federal Unemployment tax taxable wage base for FUTA?
  1. Under what circumstances is a Veteran (or representative) employer liable for Federal Unemployment Tax?
  1. Describe the process for filing and paying employee state income tax.
  1. Describe the process for filing and paying employer state unemployment tax.
  1. What is the state Unemployment Tax taxable wage base?
  1. Under what circumstances is a Veteran (or representative) employer liable for State Unemployment Tax?
  1. What year-end tax filing/return responsibilities exist for payments made to non-employee goods and services vendors?
  1. Describe how IRS Form W-2 is completed for a Veteran’s workers.
  1. To whom (people or entities) are Forms W-2 issued, how and when?
  1. Under what circumstances must the F/EA refund FICA taxes to employees? What is the F/EA’s process to refund over-collected FICA?
  1. Will workers’ compensation be offered to Veteran employers? Why or why not?
  1. If yes, how will Veterans obtain workers’ compensation?
  1. How will workers’ compensation policies be managed (e.g. who will respond to underwriter and broker audit requests etc.)?
  1. What other payroll deductions and adjustments is the F/EA prepared to handle?

Reporting

  1. *What reports are submitted by the F/EA to Veterans? What information is included in each report? How often are reports submitted to Veterans?
  1. *What reports are submitted by the F/EA to counselors/care managers? What information is included in each report? How often are reports submitted?
  1. *What reports are submitted by the F/EA to the Aging and Disability Network Agency? What information is included in each report? How often are reports submitted?
  1. Does the Aging and Disability Network Agency get information from the F/EA that the Aging and Disability Network Agency uses to submit reports to the VAMC? If so, are there any timeline requirements for getting information from the F/EA and submitting it to the VAMC?

Quality

  1. What policies, procedures and internal controls are in place to detect possible fraud and abuse?
  1. What happens when fraud and abuse is suspected by the F/EA?
  1. Under what circumstances is the F/EA, as a provider in a Federal program, required by mandatory reporting rules to report suspected fraud and abuse?
  1. *How is the F/EA’s performance monitored and by what entity?
  1. How does the F/EA maintain compliance with all applicable state, federal and local rules and regulations as they relate to tax payment and reporting for Veteran-directing employers?

Funding and Accounting

  1. Have the Aging and Disability Network Agency and VAMC agreed upon a process by which the Aging and Disability Network Agency submits claims for reimbursement to the VAMC? What is the F/EA’s role in this process?
  1. The Veterans Health Administration (VHA), VAMCs, and VISNs cannot provide funds for services before they are delivered to Veterans. However, by law, employees must be paid per state prompt pay rules, which are usually not more than one or two weeks. As the VHA generally processes payments with properly received claims in 30 – 90 days, funds must be made available prior to VHA payment of claims to cover Veteran services. What entity is advancing these funds?
  1. What internal controls does the F/EA use to protect Aging and Disability Network Agency funds if the F/EA is holding funds advanced by the Aging and Disability Network Agency?
  1. If the F/EA holds funds before they are spent for Veteran services, are those funds maintained in an interest bearing account? If so, how is ownership of the interest managed?

Other

  1. In compliance with what rules and regulations will the F/EA maintain records?
  1. What are the names, titles and roles of key F/EA staff people for this program?
  1. *Over the next 6 months, how many Veterans is the F/EA prepared to serve?
  1. Does the F/EA perform any other responsibilities?
  1. Does the ACA employer mandate for health insurance apply to the VD-HCBS program? If so, how?
  1. What is the status of your contract with an FMS provider to serve this program?
  1. Do you have any requirements for workers to submit their time sheets timely for payment? If so, what are the requirements?
  1. Is the FMS provider advancing the funds for payment?
  1. If so, is the FMS provider charging any fee for this?

Revised February 2015 1