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  • Point three is what I like every agency to have a quick reference to. Once you have initiated a payment and it goes to setoff you are no longer responsible. It is very important the vendor are aware of that. If you have problems send them to me. Don’t fight this battle! I understand wanting to have good working relations ships but there debts are really not any of the paying agencies business.
  • Program has become increasing more effective and more state agencies should take advantage of the benefits.
  • Taxation - access to release/update the system. Taxation maintains the data within the system. NOT DOA. I don’t have direct access to the system. DOA – With regards to vendor payments, can help vendors recover funds that are not eligible for setoff.
  • Important to note: If the reimbursement was for $1,350 and the debt was $1,000. The $350 not involved in the CDS is issued under Taxation’s name. All the funds are not taken and disbursed in two direction. The original transaction is only hit for the amount of the debt if the debt is more the entire amount would be intercepted. If the check is lost in the mail or not cashed and stale dated because it didn’t match an invoice – Taxation would have to stop payment and re-issue the $350.
  • Registration is with the Department of Taxation
  • Another example is College refunds of Federal Title IV funds. Many case is review when it occur and there could be other cases.
  • What is important here to know about the process is that the funds are in a suspense account until finalized (30 -45 day time frame). If a payment due date to be paid 4/8 but the vendor receives a letter and not a check. It will take over 45 days before the account balance is updated.
  • Note: Notice will got to the address of the debt not necessarily the check address. Payment address my be a lock box but debt address might be payroll department.
  • Refund entire amount Refund difference Refund entire amount Refund entire amount Refund entire amount

Photo by Karl Steinbrenner Photo by Karl Steinbrenner Presentation Transcript

  • Comptroller’s Debt Setoff Program Fiscal Fundamentals
  • Legislative Authority
    • Code of Virginia § 2.2-4800 – 2.2-4808
    • The Virginia Debt Collection Act
    • State policy: All agencies and institutions shall take all appropriate and cost-effective actions to aggressively collect all accounts receivable.
    • DOA shall adopt related policies and procedures.
    • Payments shall be deemed to have been made when offset proceedings have been instituted, and authorized under Virginia Debt Collection Act.
  • “Bad Debts” Recovered by CDS
    • FY 07 – $15.8 million
    • FY 06 – $13.2 million
    • FY 05 – $4.2 million
    • FY 04 – $4.5 million
    • FY 03 – $4.5 million
  • Taxation—DOA Partnership
    • The CDS program runs under a partnership between DOA and Department of Taxation.
    • Taxation is responsible for the automated setoff payments system.
    • DOA is responsible for interpreting the Code with respect to eligible and ineligible funds.
  • CDS at Work
    • Vendor Doe owes $1,000 to Agency A.
    • Vendor Doe’s account becomes past-due.
    • Agency A (Claimant Agency) enters Vendor Doe’s debt in CDS.
    • Coincidentally, Agency B owes Vendor Doe a $1,350 refund.
    • CDS matches these transactions, pays $1,000 of the refund to Agency A (Claimant Agency), and pays the remaining $350 to Vendor Doe.
  • Processing Claims
    • A registered agency can submit claims for CDS collection.
    • The following information is needed to submit a claim:
      • Claimant agency code
      • Debtor name
      • Social Security Number or Employer Identification Number
      • Amount of debt
  • Exceptions
    • Not all payments are eligible for setoff.
    • CARS stores information to identify payments that should bypass the setoff process (such as payments to other governments).
  • Match Found
    • SSN or EIN is used to match a payment with a debt listed at Taxation.
    • Funds move from the paying agency to the DOA “Suspense Awaiting Debt Set-Off” account.
    • Taxation is notified about debt match and funds move from DOA suspense account to Taxation suspense account.
  • Notification
    • Tax notifies claimant agency that funds are being held.
    • Claimant agency must notify debtor that funds are being held and the specific reason.
    • If only partial payment is taken, debtor receives partial payment and check stub (or EDI notice) saying:
        • Balance taken for debt owed, and
        • Written explanation will follow.
    • If full payment taken, nothing sent to debtor until claimant agency notifies them of funds offset.
    • At notification, debtor may contest claim .
  • Finalization
    • The claimant agency notifies Tax that they will accept funds collected by setoff.
    • After 60 days, funds are transferred to the claimant agency and noted as finalized in Tax system.
  • Funds Release Before Finalization
    • Money can be released to the debtor for these reasons:
    • Tax receives finalization notice from claimant agency with zero dollar amount.
    • Finalization notice shows only part of setoff amount is needed to satisfy claim.
    • Finalization notice not returned in 60 days.
    • Debtor proves he or she is entitled to money.
    • Claimant agency deletes claim.
  • After Finalization
    • Once funds have been forwarded to claimant agency, the claimant handles any debtor request for funds released because debtor proves entitlement to money.
    • Program participants must register with
    • Taxation. For more information, contact:
    • Marian Jackson
    • (804) 786-0637
    • [email_address]
    Your Participation
  • Key Contacts after Registration
    • Department of Taxation Customer Service
      • (804) 367-8031
    • Department of Accounts Comptroller’s Debt Setoff Coordinator
    • (804) 371-8383
    • CAPP Manual Topics
      • 20505 , Accounts Receivable
      • 20310 , Expenditures
    • Code of Virginia § 2.2-4800 – 2.2-4808 The Virginia Debt Collection Act
    References
  • Contacts
    • [email_address]
    • 804-371-8383 – voice
    • 804-371-8387 – facsimile
    • U. S. Mail:
    • General Accounting
    • Virginia Department of Accounts
    • P. O. Box 1971
    • Richmond, VA 23218-1971