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 the components necessary to
develop and implement FMS in a Veteran-directed program that features use of a
flexible 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 veterandirected 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
mollie.murphy@annkissam.com. 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 program design
and implementation experience, and may be able to help you troubleshoot issues
that arise. Please note that assistance is available to complete the Readiness
Review through www.participantdirection.org, and www.adrc-tae.org, 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
mollie.murphy@annkissam.com.
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
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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?
2. What liability does the F/EA take on under Section 3504 of the Internal
Revenue Code?
3. What Federal Revenue Procedure (s) will you use as a Fiscal/Employer
Agent serving the VD-HCBS program?
4. Has the F/EA operated as such for a participant-directed program in the
past? Please describe.
Employer Enrollment
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5. Who is the employer of a Veteran’s directly hired workers?
6. 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?
7. What must be in place/criteria met before a Veteran is authorized to
receive services from a direct care worker?
8. Does the F/EA play any role in providing information to the Veteran or
representative on their role as the employer?
9. 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?
10. Are Veteran representatives permitted to act as the designated employer
in the Veteran’s program? If so, under what circumstances?
11. *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
12. Who will determine what workers a Veteran hires?
13. What is the process after a worker has been identified for possible
employment?
14. Will background or registry checks be performed on workers?
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a. If so, what type of background or registry check(s)?
b. If so, what is the process if a worker has results on his/her
background or registry check?
15. How is a worker’s employment status (employee or independent
contractor) determined?
16. For tax exemption purposes, what is the importance of the worker’s
family relationship with the employer?
17. How is information for question 16 collected?
18. If paid workers are part of the Veteran’s back-up plan, what is the process
for enrolling back-up workers?
19. How are employee rates of pay determined? What rules or regulations
impact an employee’s rate of pay?
20. Is overtime allowed for workers?
Non-Employee Goods and Services Vendor Enrollment
21. Is Veteran use of non-employee goods and services vendors permitted in
this program?
22. 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)?
23. What forms must a non-employee goods or services provider complete?
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Budgets
24. How is Veteran budget and spending plan data delivered to the F/EA?
25. How does the F/EA obtain information about an amended spending
plan/budget?
26. How is over and under spending identified?
27. How is budget overspending prevented?
28. What happens in a month when a Veteran does not utilize his/her
complete budget?
Payments
29. How are timesheets and invoices that are submitted for payment
reconciled with the Veteran’s budget/spending plan?
30. 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?
31. On what periodicity are employees paid? Does that periodicity meet state
pay day and prompt pay regulations?
32. Under what circumstances would an employee be denied payment?
33. What happens if a Veteran authorizes an employee to work more hours
than is covered by the Veteran’s VD HCBS budget/spending plan?
34. 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?
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35. What taxes are withheld from employee pay?
36. What taxes are owed by the employer? What is the rate for each employer
tax and how is it determined?
Managing Taxes & Insurances
37. Describe the process and periodicity for depositing employee Federal
Income Tax, and employer and employee FICA tax.
38. Describe the process for meeting IRS filing requirements for employee
Federal Income Tax, and employer and employee FICA tax.
39. Describe the process for depositing employer Federal Unemployment Tax
Act (FUTA) tax.
40. Describe the process for meeting IRS filing requirements for employer
Federal Unemployment Tax Act (FUTA) tax.
41. What is the Federal Unemployment tax taxable wage base for FUTA?
42. Under what circumstances is a Veteran (or representative) employer liable
for Federal Unemployment Tax?
43. Describe the process for filing and paying employee state income tax.
44. Describe the process for filing and paying employer state unemployment
tax.
45. What is the state Unemployment Tax taxable wage base?
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46. Under what circumstances is a Veteran (or representative) employer liable
for State Unemployment Tax?
47. What year-end tax filing/return responsibilities exist for payments made
to non-employee goods and services vendors?
48. Describe how IRS Form W-2 is completed for a Veteran’s workers.
49. To whom (people or entities) are Forms W-2 issued, how and when?
50. Under what circumstances must the F/EA refund FICA taxes to
employees? What is the F/EA’s process to refund over-collected FICA?
51. Will workers’ compensation be offered to Veteran employers? Why or
why not?
a. If yes, how will Veterans obtain workers’ compensation?
b. How will workers’ compensation policies be managed (e.g. who
will respond to underwriter and broker audit requests etc.)?
52. What other payroll deductions and adjustments is the F/EA prepared to
handle?
Reporting
53. *What reports are submitted by the F/EA to Veterans? What information
is included in each report? How often are reports submitted to Veterans?
54. *What reports are submitted by the F/EA to counselors/care managers?
What information is included in each report? How often are reports
submitted?
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55. *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?
56. 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
57. What policies, procedures and internal controls are in place to detect
possible fraud and abuse?
58. What happens when fraud and abuse is suspected by the F/EA?
59. 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?
60. *How is the F/EA’s performance monitored and by what entity?
61. 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
62. 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?
63. 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,
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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?
64. 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?
65. 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
66. In compliance with what rules and regulations will the F/EA maintain
records?
67. What are the names, titles and roles of key F/EA staff people for this
program?
68. *Over the next 6 months, how many Veterans is the F/EA prepared to
serve?
69. Does the F/EA perform any other responsibilities?
70. Does the ACA employer mandate for health insurance apply to the VDHCBS program? If so, how?
71. What is the status of your contract with an FMS provider to serve this
program?
72. Do you have any requirements for workers to submit their time sheets
timely for payment? If so, what are the requirements?
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73. Is the FMS provider advancing the funds for payment?
74. If so, is the FMS provider charging any fee for this?
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