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DSS FISCAL MANUAL SECTION VI - PAYMENT PROCESS

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Section VI-C Electronic Funds Transfer

General

In 1996, the Division of Social Services established, pursuant to the Office of State Controller’s Cash Management Directive, a new system for recovering the county share of public assistance programs. This directive requires that collections and payments between State agencies and local units of government use the State Treasurer’s STEPS-IN and STEPS-OUT electronic funds transfer system. The electronic funds transfer system consists of drawing funds from the counties’ bank accounts for recovering the county share of public assistance programs and electronically reimbursing the counties when applicable, on a specified date. Notices as shown on the following page are faxed to the counties to inform them of the funds that are required to be in the account and also to inform the counties of the funds that will be deposited electronically into the account on that date. The divisions allow a period of 5 business days notice to the counties for assurance of sufficient funds in the account. As stated in the Cash Management Directive, “any payments remitted to the State agency by check or otherwise, which is not paid on a timely basis, shall be subject to the interest and penalties provisions as set forth in G.S. 147-86.23.” Reports are sent as back-up for EFT transactions.

Central Payment System

The Division created a “Central Payment System” whereby checks for public assistance recipients would be written on an account with the State Treasurer rather than on commercial bank accounts operated by the 100 counties. As the check clears the state-wide account, an electronic funds transfer system is utilized to obtain the counties share of the public assistance costs.

Programs Subject to the Electronic Funds Transfer System

1. Temporary Assistance for Needy Families TANF EIS

2. State/County Special Assistance to Adults - SC, SA (EIS)

3. Medical Assistance (Administered by Division of Medical Assistance)

4. County Administration Interim and County Administration Settlement (DSS-1571)

5. Adoption Assistance, Foster Care and Vendor Payments (CPITS)

6. Child Support Enforcement - Payments to counties

7. Other Programs as selected.

Refer to the DHHS Office of the Controller website for codes used in the Electronic Funds Transfer.

The county is required to maintain an account with the appropriate funds needed on a specified date. A notice will be faxed to the county stating the amount of the draft and the effective date of the draft. Reports for back-up of EFT transactions are mailed to the county.

At any time where a change is necessary in the pertinent information on the electronic funds transfer process, such as the name of bank honoring EFT transactions, account numbers, county fiscal officers, etc., the EFT Authorization Form should be completed and submitted to the appropriate State office.

Failure to Arrange for Public Assistance to the State

To encourage counties to meet their local social services budget obligations, the 1981 Appropriations Act, Section 16 provides that “The Director of the Budget is authorized to withhold from any county that does not pay its full share of public assistance costs to the State and has not arranged for payment pursuant to G.S. 108-54.1 or G.S. 108A-143, any State moneys appropriated from the General Fund for public assistance and related administrative costs, or to direct the Secretary of Revenue and State Treasurer to withhold any tax owed to a county under Article 7 of Chapter 105 of the General Statutes, G.S. 105-113.86, Article 39 of Chapter 105 of the General Statutes or Chapter 1096 of the Session Laws of 1967. The Director of the Budget shall notify the chairman of the board of the county commissioners of the proposed action prior to the withholding of funds.”

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  For questions or clarification on any of the policy contained in these manuals, please contact your local county office.  


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