Payment Adjustments for Child Care

Payment adjustments are necessary when there are extenuating circumstances that do not require case or authorization information to be updated, but where other payment modifications need to be made. There are six reasons an adjustment may be necessary; they are discussed below.  

Adjustments are tied to a payment, vendor, case, client and service period. Once the adjustment is “Approved” in the VaCMS, the information displays in read-only mode. Adjustments for underpayments are not encumbered funds and will reduce the budget line allocation immediately once approved in the VaCMS. The local finance staff must be notified when this type of an adjustment is performed so the additional expenditure of funds can be accounted for.

Please refer to the “Create a Manual Adjustment” section of procedure help within the VaCMS prior to entering adjustments in the system, as it outlines the exact steps for entering a payment adjustment. To determine whether an adjustment is necessary consult with your supervisor.

An adjustment for an underpayment is appropriate under the circumstances listed below. If you have additional questions about adjustment procedures, please contact your Child Care Regional Consultant.

1. Incorrect authorization start date.

Example: You have entered an authorization date of March 15th; however the date should be March 1st.

Once the begin date of the authorization is saved and sent to the Electronic Child Care (ECC / EPPIC) system, a previous date cannot be entered.

2. Incorrect type of units authorized.

Example: You authorized 22 part day units in error when you intended to authorize 22 full day units. The vendor can only be paid for the difference between the part day and the full day rate for the units authorized.

Note: Payment adjustments should not be used to compensate vendors for schedule changes that were not reported timely by the parent. It is the responsibility of the parent to inform you within five (5) calendar days of a schedule change, as specified on the Parent Responsibilities form so you can revise the schedule as needed.

3. Incorrect number of units authorized.

Examples: School was not in session due to unexpected inclement weather, such as snow or flood. A schedule change was reported timely by the parent, but you were unable to act on the information in time.

4. Vendor erroneously entered as an In-Home Provider, and FICA deducted.

Example: You choose the category of In-Home Provider instead of Family Day Home Provider.

Note: In-home means that child care is provided in the home of the child and parent, the children reside in that home, and the caretaker (vendor) does not live in the home. An adjustment of this type can have an impact on 1099 tax reporting at the end of the year. If you perform this type of adjustment, the regional consultant must be informed.

5. Change to vendor rates.

Example: The vendor rate changes in the VaCMS. The vendor could go from Level 1 to Level 2, or the vendor could have been assigned to an incorrect FIPS with a different rate.

6. VaCMS created adjustments.

Example: The vendor’s rates have changed. The date of birth of the child (which would impact age range) has changed.

Note: Automated adjustments are created any time a change is made that affects a period that was paid. You receive a Task and Reminder, and then use the VaCMS to approve the pending adjustment created for each child with that vendor.

It is very important that you record comments in the VaCMS. These comments must:

• specify the reason for the payment adjustment.

• specify service dates covered.

• specify the number of full day or part day units being paid.

• specify the Maximum Reimbursable Rate.

You are encouraged to record any other information related to the adjustment.

Updated 05/22/2014