Comptroller's Debt Set-Off Program - Virginia Department of Accounts

Taxation—DOA PartnershipThe CDS program runs under a partnershipbetween DOA and Department of Taxation.Taxation is responsible for the automatedsetoff payments system.DOA is responsible for interpreting the Codewith respect to eligible and ineligible funds.9/9/2008 Financial Reporting 4

Vendor Doe owes $1,000 to Agency A.Vendor Doe’s account becomes past-due.Agency A (Claimant Agency) enters VendorDoe’s debt in CDS.CDS at WorkCoincidentally, Agency B owes Vendor Doe a$1,350 refund.CDS matches these transactions, pays $1,000 ofthe refund to Agency A (Claimant Agency),and pays the remaining $350 to Vendor Doe.9/9/2008 Financial Reporting 5

Processing ClaimsA registered agency can submit claims for CDScollection.The following information is needed to submit aclaim:– Claimant agency code–Debtor name– Social Security Number or Employer IdentificationNumber–Amount of debt9/9/2008 Financial Reporting 6

ExceptionsNot all payments are eligible for setoff.CARS stores information to identifypayments that should bypass thesetoff process (such as payments toother governments).9/9/2008 Financial Reporting 7

Match FoundSSN or EIN is used to match a payment with adebt listed at Taxation.Funds move from the paying agency to theDOA “Suspense Awaiting Debt Set-Off”account.Taxation is notified about debt match andfunds move from DOA suspense account toTaxation suspense account.9/9/2008 Financial Reporting 8

NotificationTax notifies claimant agency that funds are beingheld.Claimant agency must notify debtor that fundsare being held and the specific reason.If only partial payment is taken, debtor receivespartial payment and check stub (or EDInotice) saying:• Balance taken for debt owed, and• Written explanation will follow.If full payment taken, nothing sent to debtor untilclaimant agency notifies them of funds offset.At notification, debtor may contest claim.9/9/2008 Financial Reporting 9

FinalizationThe claimant agency notifies Tax that they willaccept funds collected by setoff.After 60 days, funds are transferred to theclaimant agency and noted as finalized in Taxsystem.9/9/2008 Financial Reporting 10

Funds Release Before FinalizationMoney can be released to the debtor for these reasons:Tax receives finalization notice from claimant agencywith zero dollar amount.Finalization notice shows only part of setoff amount isneeded to satisfy claim.Finalization notice not returned in 60 days.Debtor proves he or she is entitled to money.Claimant agency deletes claim.9/9/2008 Financial Reporting 11

After FinalizationOnce funds have been forwarded to claimantagency, the claimant handles any debtorrequest for funds released because debtorproves entitlement to money.9/9/2008 Financial Reporting 12

9/9/2008 Financial Reporting 13Your ParticipationProgram participants must register withTaxation. For more information, contact:Marian Jackson(804) 786-0637Marian.Jackson@tax.virginia.gov

Key Contacts after Registration(804) 367-8031(804) 371-83839/9/2008 Financial Reporting 14Department of Taxation Customer ServiceDepartment of Accounts Comptroller’s DebtSetoff Coordinator

ReferencesCAPP Manual Topics– 20505, Accounts Receivable– 20310, ExpendituresCode of Virginia § 2.2-4800 – 2.2-4808 TheVirginia Debt Collection Act9/9/2008 Financial Reporting 15

gacct@doa.virginia.gov804-371-8383 – voice804-371-8387 – facsimileU. S. Mail:General AccountingVirginia Department of AccountsP. O. Box 1971Richmond, VA 23218-1971Contacts9/9/2008 Financial Reporting 16