Management of Individuals' Funds

The personal allowance regulations outline responsibilities for DDSOOs and OPWDD voluntary agencies that accept responsibility for handling any personal funds on behalf of individuals they serve. They specify residential provider and non-residential provider responsibilities. Regardless of the source of the money, if the agency is handling funds, the agency must follow personal allowance regulations including recording every receipt and disbursement of funds managed by the agency, including deposits, withdrawals, interest and transfers between accounts. 

Personal allowance is derived from a person’s monthly income, including unearned income such as government benefits and any earned income. It is important that a person has access to their personal allowance as funds become available. The agency must separate personal allowance from other money within three business days of receipt. Individuals must be provided with personal funds within three business days of the request.

The residential agency must determine whether a person needs a representative payee. The need for a representative payee must be evaluated and documented within 10 days upon admission, any time a person moves, if there is a change in their circumstances or ability to manage funds, and if the person or someone else requests it on their behalf. If the agency determines a person needs a representative payee, and they did not have one before, a healthcare professional must conduct an evaluation and submit their findings to SSA. Documentation must be maintained. 

If the representative payee is the facility director, they must manage the person’s benefits and personal allowance without charging a fee. If the facility director is not the representative payee, they must offer in writing to manage the personal allowance for free. Additional information on representative payee responsibilities is outlined in 14 NYCRR Section 633.9.  

The residential agency must develop and implement policies and procedures for the management and use of funds. Policies and procedures must address, at a minimum:

• Security of funds, including the location maintained and restrictions on access
• Accountability of staff, volunteers and providers
• Recordkeeping, both electronically and on paper
• Spending and monitoring of personal allowance
• That the use of personal allowance is to benefit the person only and reflects their choices
• A process for individual personal expenditure planning and the implementation of a Personal Expenditure Plan (PEP) 
• Notification to the person and parties of their choosing when the provider is applying to be the representative payee
• Responses to requests for accounting

The residential agency is responsible for managing the personal allowance account using the following guidelines:

• Personal allowance must be separated from income or Net Available Monthly Income (NAMI) within three (3) business days of receipt. 
• A record of all resources must be maintained to ensure continued eligibility for benefits and entitlements 
• The accounting process must clearly identify personal allowance as separate from any funds belonging to the agency, its employees, contractors, consultants, volunteers, or family care providers
• The personal allowance account must reflect all interest earned by a person if the personal allowance has been deposited in an agency bank account

In addition to these guidelines, the agency or sponsoring agency must have procedures in place to monitor the total funds to which a person has independent access and work with the individual to ensure this total does not exceed the amount specified in the person’s Money Management Assessment (MMA). This includes:

• Cash or cash equivalents, such as a debit card or prepaid credit card, in the possession of the person
• Funds retained by the person from their earnings
• Funds maintained in a person-owned account (e.g., in a community bank account)

People sometimes move from one living situation to another. During this transition, it is important that they have uninterrupted access to their personal allowance money.

Personal allowance money belongs to the person and must be available for personal spending at the person’s discretion. To ensure that the person’s money remains available, specific procedures have been put in place and are outlined below.   

When the original agency is the representative payee, and the person’s money is derived entirely from sources other than Social Security or SSI, the balance of all personal allowance funds must be forwarded to the appropriate party at the new residence within 10 days of the person’s departure. During the transition, any additional funds received prior to the designation of a new representative payee must be forwarded within 5 business days of receipt to the new agency. This arrangement continues until a new payee is designated. If the new residence is a DDSOO or voluntary certified residence, the new provider must determine if a representative payee is still needed and apply to be payee, if applicable, within 10 days of admission.

The following procedures apply, regardless of where the person is moving, when any of the person’s money is derived from payments made by the Social Security Administration (SSA):

When there will be a change in representative payee, all funds from SSA must be returned to SSA within 10 days. The new agency or payee must be notified of the date and amount returned.  
SSA may grant written permission to forward the funds to the new payee if requested for specific individuals or under certain circumstances. This permission must be kept in the file. 
If written permission has been received from SSA to forward funds to the new agency, funds must be forwarded within 10 days of the move.
In addition to the procedures outlined above, the following specific requirements apply when a person moves to another residence certified or operated by OPWDD: 

• When a person moves, the agency must send the lesser of 1 month’s statutory personal allowance or the total of the person’s funds, to the new agency before returning any funds remaining to SSA. 
• When a new agency is appointed representative payee and receives a person’s funds, the money must be treated as personal allowance. If any rent is due for a period prior to appointment as representative payee, the agency must obtain written permission from SSA to collect it unless the individual resides in an ICF, DC, or SRU. 
• The burial fund must be sent to the new payee within 10 business days and must be clearly identified as such. The new agency must account for the burial fund separately for it to remain an excluded resource for SSI and Medicaid purposes.
• If it has been determined a person needs a representative payee, the new agency must apply to SSA to become the person’s representative payee within 10 business days of the person’s move. The residential agency should document the need for a payee and their offer to serve as representative payee. This documentation should be maintained in the case file. 

The procedures detailed above are intended to avoid shortfalls in an individual’s personal allowance when they move to a new residence. If a person moves into a residence operated by a different agency and a temporary shortfall occurs because the person’s benefits are not yet being paid to the new agency, the agency may advance the person’s personal allowance until the benefits are received. This is the only time an agency may advance funds to an individual. Any other advancement of funds constitutes pledging and is prohibited. 

A non-residential provider that accepts personal allowance funds from a residential agency for a person’s use assumes responsibility for those funds and must handle them in accordance with personal allowance regulations. 

This responsibility includes establishing policies and procedures that address, at a minimum:

• The usage of the funds
• The security of the funds
• Recordkeeping, both electronically and on paper
• The accountability of all agency personnel handling the money including staff, contractors, consultants and volunteers 
• Spending and monitoring of personal allowance

Additionally, personal allowance regulations require that a non-residential provider must:

• Maintain an up-to-date person-specific record or ledger detailing receipt, disbursement and balance of personal allowance funds
• Obtain receipts in accordance with 14 NYCRR 633.15
• Ensure that expenditures benefit the individual and that items purchased by or for the person become his or her personal property
• Ensure that the use of personal allowance is in accordance with the individual’s spending plan
• Send the residential agency a copy of the ledger for each person for whom the program is holding personal allowance funds quarterly

There are different types of accounts associated with personal allowance. Documentation must be maintained for all accounts covered under personal allowance regulations. While you may not work with all of them, you should be familiar with their purposes and you should also know:

• Who at your agency manages the accounts?
• How your agency manages personal allowance? 

You should also know how to access information regarding the amount of personal allowance due to a person in any given month and the total balance(s) in personal allowance account(s) you work with. These accounts may include any or all the following:

• A personal allowance account
• An agency fiduciary personal allowance account
• A person-owned account
• Cash or cash equivalents, such as a debit card or prepaid credit card, at the person’s residence and/or day program
• Money in the person’s possession

Personal Allowance Account
When the residential agency manages personal allowance, a personal allowance account must be established for the person. This applies when the agency is representative payee and/or when they receive funds from the representative payee or person to manage. The personal allowance account consists of an accounting process to record the receipt and disbursement of all personal allowance. There is no required format, but it is suggested that there be columns to show the difference between current income and savings. Agencies must identify which accounts are holding personal allowance and what amounts are in each, at least quarterly. Personal allowance account funds must be maintained in one or more of the following accounts:   

• An agency fiduciary personal allowance account
• A person-owned account
• Cash at the person's residence
• Cash with other service providers

Agency Fiduciary Personal Allowance Account

Fiduciary personal allowance accounts are established by an agency to contain personal allowance funds for which they are responsible. They may contain the personal allowance for multiple individuals, but agencies must be able to identify personal allowance belonging to each person. The account must be interest bearing. Interest on the account must be allocated to all the people who have money in the account. While the agency controls the bank account, the agency does not own the money in the account. 

Only authorized agency employees should have access to the fiduciary account. Money can only be disbursed as follows:

• To the person for spending 
• To the residence to keep cash on hand for the person 
• To vendors to pay personal allowance expenses  
• To family or friends to reimburse purchases with receipts
• To a person-owned account

Person-Owned Account
A person-owned account is an account in a financial institution in the community. The account can be used for people who may have some money management skills but need training, for those who need help with physically depositing and withdrawing funds, or for other reasons as documented in the PEP. It should be in only the individual’s name to reflect sole ownership. The account must never be in both the person’s name and the name of the agency or an agency employee. If possible, the account should be interest bearing. Wages can be deposited into the account. In terms of documentation and control, direct deposit is always a good idea.

Some agencies use debit or ATM cards to better manage personal allowance. This has an advantage as money can be accessed from almost anywhere and in the same fashion as everyone else. Most ATMs have cameras, which is helpful when investigating problems. The bank statement shows withdrawals and credits and can be used as an internal control. It also reduces the amount of cash in the house. 

Since the person-owned account belongs only to the person, they are responsible for any fees connected with the account. However, the agency has a duty to seek the best option for the individual and try to get any fees waived. The agency is also responsible for monitoring the account balance to make sure the person’s total resources stay below the allowed limit so that the person’s benefits are not reduced.

Cash at the Residence
In accordance with the PEP and upon the request of the person or appropriate agency staff, cash may be kept at the residence to meet a person’s day-to-day needs. The cash must be in a secure location and there should be limited access to the funds. Funds should be made available to the person at their request. There must be documentation at the residence, including a ledger or equivalent, of all receipts, disbursements, and the balance of all cash in the residence. Cash equivalents, such as prepaid credit cards, must be treated as cash if being held by the residence. The amount of cash at the residence should reflect the person’s spending needs based on their PEP and be equal to or less than the cash cap amount for the residence. The statutory cash cap applies to the total amount of cash, including wages, that can be maintained by the agency in the residence for a person. The cash cap is adjusted annually when there is an SSA COLA and is equal to the statutory personal allowance amount for Congregate Care Level III (Specialty School) plus $20. This amount may be exceeded for up to 14 calendar days for a specific purpose. Documentation of the specific amount, time and purpose for the excess amount must be included in the cash account record. An agency may choose a cash cap lower than the statutory amount, but may not exceed that amount. A portion of cash at the residence may be provided to a non-residential program for use by the person while they are receiving services at that program. 

Cash at the Day Program
Day programs must follow the requirements for all non-residential providers. Funds provided to a day program should not negatively impact the person’s ability to do the things they enjoy in the evenings and weekends. A residential program cannot transfer personal allowance funds to the day program unless the day program has procedures in place for handling personal allowance, including:

• Maintaining separate ledgers and receipts for each person for whom the day program is handling any personal allowance money 
• Sending a quarterly report to the residential program
• Following the person’s PEP

These procedures should only be used for people who are incapable of handling their own funds or for amounts greater than indicated on their money management assessment. If the day program does not follow the regulatory requirements, the residential agency staff should not send personal allowance funds to the day program. 

Example: A DDSOO and a day program work together to provide a personal allowance for Jessica during day community outings of her choosing. The residence withdraws a small sum ($20 or less) from the cash on hand and sends it to the day program. The day program gives a receipt for the cash to the residence. The day program staff keeps a ledger of all expenditures, including how the money was used and receipts if required. Every quarter, the day program sends a copy of the ledger to the residential program. This arrangement cuts down on the time and paperwork of transferring small specific amounts between the day program and the residence. OPWDD also views this as a more secure arrangement, as fewer people handle the money each day.