Rule-making Standards and Procedures



STATEMENT OF BASIS AND PURPOSE

Summary of the basis and purpose for the rule or rule change. (State what the rule says or does, explain why the rule or rule change is necessary and what the program hopes to accomplish through this rule.)

This rule is intended to allow the Colorado Department of Human Services to honor levies against vendors who provide services for the Department and the county departments of social/human services. Since these levies are court ordered or ordered by federal or state agencies, upon advice from the Attorney General’s Office, the State Department should not override court orders or orders of other state or federal agencies that have already given vendors/providers their due process rights when establishing the order for repayment. This could include a levy by the Internal Revenue Service (IRS) or a writ of garnishment by courts of law.

This rule will be promulgated in an Executive Director rule-making session.

An emergency rule-making (which waives the initial APA noticing requirements) is necessary:

| |to comply with state/federal law and/or |

| |to preserve of the public health, safety and welfare |

Explain:

Authority for Rule:

Department or Program Authority: (give federal and/or state cite and a summary of the language authorizing the rule-making)

26-1-108, C.R.S. (2008) – Executive Director to promulgate rules for county departments pertaining to accounting and finance compliance.

|Initial Review | 01/09/2009 |Final Adoption | 02/06/2009 |

|Proposed Effective Date |04/01/2009 |EMERGENCY Adoption | n/a |

DOCUMENT 1 E.D.

STATEMENT OF BASIS AND PURPOSE (continued)

| |Yes |X |No |

| |Yes |X |No |

Does the rule incorporate material by reference?

Does this rule repeat language found in statute?

If yes, please explain.

State Board Administration will send this rule-making package to CCI, OSPB and the JBC. The program has sent this rule-packet to which stakeholders?

Internal Revenue Service (IRS), Colorado Department of Revenue, County Group Human Services Fiscal Officer Association (CGHSFOA, formerly FOG), County Departments of Social Human Services, Child Care Providers and Child Care Association (CCA), and CDHS Accounting Department and Electronic Benefit Transfer Unit

Attachments:

Regulatory Analysis

Overview of Proposed Rule

Stakeholder Comment Summary

REGULATORY ANALYSIS

(complete each question; answers may take more than the space provided)

1. List of groups impacted by this rule:

Which groups of persons will benefit, bear the burdens or be adversely impacted by this rule?

Child care providers and any other vendors who we pay for services could bear the burden of this rule. The Internal Revenue Service (IRS), Colorado Department of Revenue, and any private individuals who have been awarded a levy or garnishment will benefit due to receiving the money they were awarded. CGHSFOA, County Departments of Social/Human Services, Colorado Department of Human Services Accounting Department, and the Electronic Benefit Transfer (EBT) Unit will be impacted by this rule since they will now be honoring the levies or garnishments.

2. Describe the qualitative and quantitative impact:

How will this rule-making impact those groups listed above? How many people will be impacted? What are the short-term and long-term consequences of this rule?

If a levy is assessed against a provider or vendor, the Department will honor it. To date, no levies have been honored so it is not known how many people will be affected. There could be an impact for staff in Accounting and Electronic Benefit Transfer (EBT) Units related to completing the work to garnish the payments and then sending those payments to whatever company or agency that established the claim.

3. Fiscal Impact:

For each of the categories listed below explain the distribution of dollars; please identify the costs, revenues, matches or any changes in the distribution of funds even if such change has a total zero effect for any entity that falls within the category. If this rule-making requires one of the categories listed below to devote resources without receiving additional funding, please explain why the rule-making is required and what consultation has occurred with those who will need to devote resources.

State Fiscal Impact (Identify all state agencies with a fiscal impact, including any CBMS change request costs required to implement this rule change)

There could be State Fiscal Impact for the Department of Revenue because they will now receive any money owed by vendors/child care providers that are attached by levy.

There could be a fiscal impact for staff in Accounting and Electronic Benefit Transfer (EBT) Units related to completing the work to garnish the payments and then having to send those payments to whatever company or agency that established the claim.

County Fiscal Impact

There may be a county fiscal impact if providers are lost due to honoring the garnishments and levies. Though counties approve the payments to providers and these payments are part of their annual allocation, the attachment occurs when the payment goes through the Colorado Financial Management System (CFMS) and EBT system. The county forwards the Order to the state.

REGULATORY ANALYSIS (continued)

Federal Fiscal Impact

There could be Federal Fiscal benefit impacting the Internal Revenue Service and any Federal Courts because they will now receive money owed by vendors/child care providers that are attached by levy. There could a Federal Fiscal Impact because the Internal Revenue Service will now receive money from the Colorado Department of Human Services that may be owed to them.

Other Fiscal Impact (such as providers, local governments, etc.)

There could be a fiscal impact on vendors/providers because their payments would be reduced by the amount of the levy. For those individuals who have been awarded a levy by the court system, they would experience a fiscal benefit impact because they would now receive the funds they were awarded.

4. Data Description:

List and explain any data, such as studies, federal announcements, or questionnaires, you relied upon when developing this rule?

This rule was determined necessary as a result of miscommunication between the Electronic Benefit Transfer (EBT) Unit and the Division of Child Care. The EBT Unit was not aware that under current regulations, levies or garnishments were prohibited. This resulted in an opinion issued by the Attorney General’s Office requesting that regulations be changed so that the Department was not interfering with other agencies’ due process rights.

5. Alternatives to this Rule-making:

Describe any alternatives that were seriously considered. Are there any less costly or less intrusive ways to accomplish the purpose(s) of this rule? Explain why the program chose this rule-making rather than taking no action or using one of the listed alternatives.

No alternatives were considered to this rule-making since current rule requires us to not honor levies from anyone and the Attorney General’s Office advised the Department to make this change to rule.

OVERVIEW OF PROPOSED RULE

Compare and/or contrast the content of the current regulation and the proposed change.

|Section Numbers |Current Regulation |Proposed Change |Stakeholder Comment |

| | | | | | | |

|5.424 |Client and vendor warrants are not |The word “vendor” is being deleted |__ |Yes |X |No |

| |assignable | | | | | |

| | | | | | | |

| | | | | | | |

| | | | | | | |

| | | |_ |Yes |_ |No |

| | | |_ |Yes |_ |No |

STAKEHOLDER COMMENT SUMMARY

The following individuals and/or entities were contacted and informed that this rule-making was proposed:

Internal Revenue Service (IRS), Colorado Department of Revenue, County Group Human Services Fiscal Officer Association (CGHSFOA, formerly FOG), County Departments of Social Human Services, Child Care Providers and Child Care Association (CCA), and CDHS Accounting Department and Electronic Benefit Transfer Unit

Comments were received from stakeholders on the proposed rule-making:

| |Yes |X |No |

If “yes”, please summarize and/or attach the feedback you received; provide proof of agreement or ongoing issues with a letter or public testimony by the stakeholder.

11 CCR 2508-1

FINANCE AND ACCOUNTING MANUAL 5.423.2 – 5.425.1

5.423.2 Canceling Warrants

Any warrants outstanding after the specified time period shall be canceled in accordance with the county's internal control procedures or by resolution of the county board of social/human services at their next county social/human services board meeting with the stipulation that should such warrant be presented for payment, a new warrant shall be issued.

5.423.3 Stale Dated Warrants

A stop-payment order will be issued to the county treasurer or county redemption entity at the time the warrant cancellation resolution is passed. The county shall report to the Colorado Department of Human Services all canceled warrants that have been previously reported to the Colorado Department of Human Services for reimbursement.

5.424 CLIENT AND VENDOR WARRANTS ARE NOT ASSIGNABLE

No warrants issued or electronic benefits authorized to recipients or vendors shall be transferable or assignable. and None of the money paid or payable to recipients under the Social Services Acts shall be subject to execution, levy, attachment, garnishment, or other legal process nor be restricted in any way.

5.424.1 Exception to Rule

Payment to a guardian or caretaker and protective payments are exceptions to Section 5.424.

5.425 FORGED WARRANTS

5.425.1 County Procedure

Disposition of the forged warrant shall follow whatever steps are available at the county level to recover the amount of the forged warrant.

|THIS REVISION: |V-04-1 |LAST REVISION: |Manual |REVISION NUMBER |

|Adopted: |3/10/2004 |Adopted: |Revised and | |

|Effective Date: |5/1/2004 |Effective Date: |Rewritten |

|COLORADO DEPARTMENT OF HUMAN SERVICES |

|STAFF MANUAL VOLUME V |

|FINANCE AND ACCOUNTING |

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