December 21, 2018

DVU Brief:

FMS does not control the budget, the FMS supports participants in paying for the services they choose.

 

Directive:

December 21, 2018

TO: REGIONAL CENTER EXECUTIVE DIRECTORS

SUBJECT: FINANCIAL MANAGEMENT SERVICES

Participants in the Self-Determination Program (SDP) will get support from a person or business to help them pay for services they need. This person or business is called a Financial Management Services provider. The purpose of this correspondence is to explain the roles and requirements for a Financial Management Services provider in the SDP.

What is a Financial Management Services provider?

A Financial Management Services, or FMS, provider plays a key role in supporting people who choose to get their regional center services through the SDP. Everyone in SDP must use an FMS provider to help:

• manage the individual budget and pay for services, including paying employees;
• assist with hiring employees;
• make sure providers are qualified to deliver services; and,
• help providers get a criminal background check, if needed.

The exact duties of the FMS depend on how a participant chooses to arrange for their services. See “Types of Financial Management Services” below for more details.

Why is an FMS required?

State law [Welfare & Institutions Code §4685.8(d)(3)(E)] requires that participants in the SDP use an FMS. An FMS provides support in many ways including, but not limited to, paying service providers, ensuring providers are qualified, ensuring all employer-related labor and tax laws are followed and reporting to the participant and regional center to help inform the budget. The FMS does not control the budget; the FMS supports participants in paying for the services they choose.

“Building Partnerships, Supporting Choices”

Types of FMS:

Depending on how services are arranged by a participant, more than one of the models below may be used. For example, a participant may need to buy a device that helps them communicate. They may also need to hire an assistant to help support them at their job. In this example, the FMS would process the payment for the communication device as a “Bill Payer” while also assisting the participant in their role as either a sole or co-employer for the job assistant.

• FMS as Bill Payer: (also known as the Fiscal Agent model)

A participant may choose this model of FMS provider when goods or services are purchased from a business. The FMS providing services in this capacity writes checks and pays for goods and services listed in the IPP. No employer/employee relationship exists between the FMS, the service provider, or the participant. The business is responsible to provide the items or workers and the FMS provider writes the check for the goods or services provided. The business maintains the employer/employee relationship with any workers and therefore is responsible for all applicable employment laws and taxes and to obtain appropriate insurances (i.e., worker’s compensation).

• Participant and FMS as Co-Employer:

A participant may choose this model if they want to share some of the employer roles and responsibilities with an FMS. While the FMS provider in this model is the employer of record, the participant maintains the ability to hire and terminate employees with input from the FMS provider. The FMS provider maintains the primary employer liability and required insurances. The FMS also assists by verifying provider qualifications and processing payroll.

• Participant as Sole Employer: (also known as the Fiscal/Employer Agent)

A participant may choose this model if they want to be the direct employer of those providing services. The FMS providing services in this model assists the participant to abide by all applicable employment laws, verifies provider qualifications and processes payroll. The participant is required to obtain any necessary insurances related to employment (i.e., worker’s compensation).

Selecting a Financial Management Services Provider:

All FMS providers are required to be vendored by a regional center (see enclosure for FMS provider requirements.) The regional center will identify FMS providers available in their area. The cost for FMS services are negotiated between the participant and the FMS provider, but may not exceed the maximum rates posted on the Department of Developmental Services’ website at: https://www.dds.ca.gov/SDP/docs/FMSRates.pdf.

The costs for these services are paid from the participant’s individual budget; however, the individual budget cannot be increased to cover the cost of the FMS.

If there are any questions regarding this information, please contact sdp@dds.ca.gov.

 

Sincerely,

Original signed by:

JIM KNIGHT

Assistant Deputy Director Community Services Division

 

Enclosure

cc: Regional Center Administrators Regional Center Chief Counselors

Regional Center Community Services Directors Association of Regional Center Agencies

State Council on Developmental Disabilities

 

Link to Directive:

Self-Determination Program: Financial Management Services (English)

Self-Determination Program: Financial Management Services (Spanish)

Self-Determination Program: Financial Management Services (Korean)