II.
PCS Contracting Requirements *<
A.PCS Contracting Formats
1.
Standard PCS Contracts
a. All PCS contracts that exceed
$25,000.00 in compensation (per contractor, per fiscal year, per cost center) shall be executed on the
Form OSP-1. (All PCS contracts executed on the
Form OSP-1 are referred to in this Manual as
"standard PCS contracts.")
EXCEPTION:
In accordance with the rules and regulations promulgated under ACA §
19-11-251, inter-agency agreements for professional or consultant services may be executed on an alternate format from the standard Form OSP-1, inter-agency agreements being defined as those between a DHS division and another state agency. The alternate format designed for this purpose is the DHS-9198 (and the DHS-9198A for amendments). Use of this alternate format requires the prior approval of the OSP Director.
b. Standard PCS contracts that exceed $25,000.00 in compensation are required by Purchasing Law to be submitted to DFA for review and approval. DHS has opted, however, to submit ALL standard PCS contracts to DFA for review and approval.
c. Standard PCS contracts that exceed
$25,000.00 total (i.e., compensation plus reimbursable expenses) must also be reviewed by the Legislative Council (or Joint Budget Committee when legislature is in session).
(1.) Those contracts with Arkansas state agencies must be presented to the
PEER Subcommittee prior to approval by DFA and prior to the execution date of such contract.
EXCEPTION:
Jn accordance with the rules and
-'i
regulations promulgated under ACA §
19-11-251,.
jnter-agency agreements for professional or consultant services executed on fhe alternate
format .do NOT require review by the PEER "
Subcommittee .or Legislative Council,.
(2.) Those contracts with other than Arkansas state agencies must be presented to the Review Subcommittee prior to approval of DFA and prior to the execution date of such contract.
(3.) The Legislative Council or the Joint Budget Committee may elect to review or exempt any contract or group of contracts.
2.
Stand-alone PCS PO's
a. PCS contracts that DO NOT exceed $25,000.00 in compensation may be executed on the PO format and are referred to in this Manual as
"stand-alone PO's". Agencies shall not, however, split known quantities into smaller ($25,000.00 and below) amounts to avoid a standard contract.
A division may execute a PCS contract that does not exceed $25,000.00 in compensation as a standard PCS contract , if preferred.
b. Stand-alone PO's require neither DFA review and approval nor legislative review unless they exceed $25,000.00 total (compensation plus reimbursable). However, multiple PO's to the same contractor in the same fiscal year from the same cost center MUST be reported to OSP to assist OSP in determining whether an agency is issuing multiple PO's in an attempt to circumvent the requirement of establishing a standard PCS contract. (See A.C.A. §
19-11-1012.)
B.
Timeframes
1. All standard PCS contract proposals should be negotiated, developed, and submitted to CSS in sufficient time to allow for a thorough compliance review by CSS, approval by the division, and signature by the contractor. This review, approval, and signature is required prior to the routing of the proposal to DFA, if applicable, and prior to the effective date of the contract action.
2. For specific deadlines for the submission of authorizations to CSS and signed contracts to DFA, refer to the Professional/Consultant Services Contract Critical Process Dates that is available from CSS. Cooperation in meeting the published deadlines will avoid possible delays in service and Suspension of the Rules.
3. Contracts requiring legislative review that are submitted to DFA after the due date must be accompanied by a
Suspension of the Rules letter from the DHS Director (see sample letter in Appendix). This letter should contain the following:
a. Contractor's name
b. Request for suspension of the rules
c. Explanation for failure to submit the contract under regular procedures
d. Description of the service(s) being purchased
e. Consequences if the request is not granted
C. General requirements for all PCS contracts include, but are not limited to, the following:
1. DHS standard is that initial contracts shall not extend past the end of the fiscal year. Requests for initial contracts to extend past the end of the fiscal year will be considered by CSS on a case by case basis. In any case, the initial term of a PCS contract shall not extend past the end of the biennium.
2. PCS contracts may be amended to extend for a total period of no more than seven (7) years.
3. PCS contracts with individuals and sole proprietorships are prohibited unless approved by OCC and are, in any case, strongly discouraged. (A sole proprietor is one who owns all of the assets of the business and is solely liable for all the debts of the business.)
4. In many situations, it is prohibited to increase the contractor's reimbursement rate without first obtaining the approval of the Governor of Arkansas and the Chief Fiscal Officer, DFA.
Note: New contracts iire not subject" to this requirement. Also, some fixed rates that function as ceiling rates for services can allow for increases in payments that do not constitute a rate increase above the ceiling rate. (See Chapter Nine of this Manual.)
5. For all contracts that were competitively procured and that exceed $25,000.00, the contractor must submit (or have on file with CSS) a copy of its Equal Employment Opportunity (EEO) policy. Contractors that do not have an established EEO policy must submit a written statement attesting that they do not have an EEO policy. This EEO policy, or statement, shall be made a part of the contract file and shall be submitted to DFA, if requiredee.
6. Certain PCS contracts require additional approval beyond the normal procedure.
a. Construction-related contracts require review by and approval from
CSU and ABA.
b. PCS contracts for information systems technology and services (including the purchase of computer equipment) require review by and approval memo from the DHS Office of Systems and Technology (OST) prior to the development of the contract (see DHS Policy 1022 for details.) Re-approval is required for all amendments to applicable contracts.
c. Contracts for legal services to represent DHS require review by and approval from OCC, for coordination to DHS Director (see
DHS Policy
1073) .
7. Standard PCS contracts are not binding, and no payments will be made, until they are approved by both contracting parties (the contractor and the division Director), as well as by a representative of DFA when applicable. Standalone PO's are considered effective and, therefore, binding upon the contractor's acceptance of the terms.
8. Funding amounts based on Final Negotiated or Fixed unit rates should be computable to an even number of units whenever practical. If the contract amount cannot be computed to an even number of units, the number of full units possible should be indicated, with a notation made that payment cannot exceed the contract total. Funding amounts based on budgets should be exact, not rounded. Contract totals that include more than one funding source should reflect the exact total of the funding sources, not a rounded amount.
9. The prior written approval of OCC is required for the contractor to assign the contract in whole or in part or any payment arising out of it.
10. To be considered valid and binding, a stamped or automated signature by a contracting party must be:
a. Unique;
b. Capable of being verified; and
c. Under the sole control of the signatory.
11. Contractors shall insure non-discrimination and equal opportunity by subcontractors in compliance with all applicable federal laws, regulations, executive orders and civil rights rules and regulations.
12. Standard PCS contracts with out-of-state vendors ("foreign corporations") who are transacting business in Arkansas shall include verification of the vendor's Certificate of Authority from the Arkansas Secretary of State.
D.
Ethics in Public Contracting
1. Ethics in public contracting is addressed in A.C.A. §
19-11-701 through 717.
2. DHS shall conform to high professional standards and stringent procurement practices to sustain public trust in their functions. Public employees must discharge their duties impartially so as to assure fair competitive access to governmental procurement by responsible contractors. Moreover, they should conduct themselves in such a manner as to foster public confidence in the integrity of the state procurement process.
E.
Reimbursement Guidelines
The contractor and division should agree upon the method of reimbursement before a contract is developed. The following methods are acceptable (see Financial Guidelines for Purchased Services for greater detail):
1. Fixed Rates
a. Fixed rates are based on a rate schedule approved by DHS and standardized for a particular service or group of services. Rate schedules are developed by the division funding the program. The division should adhere to the DHS criteria for a cost study.
b. The contractor rates should fall within the range of allowable rates shown on the approved rate schedule. Amendments to revise rates within this range are completed on a prospective basis from the effective date of the contract amendment. Fixed rates based on federal approved rates such as Medicaid may be effective on the date of approval by the federal agency.
c. All payments are final and no settlement will be made upon expiration of the contract.
d. Fixed rates are appropriate for services that can be objectively defined in the procurement and for which risk of performance is manageable. For example, if the service is measurable by hourly or daily rates, this method should be used. Fixed rate contracts are ideally suited for performance-based statements of work, measurable performance standards, and monitoring reports. When being reimbursed on a fixed rate basis, contractors tend to be motivated to find improved methods of performance in order to increase its profits.
2. Final Negotiated Rates
As with fixed rates, final negotiated rates are appropriate for services that can be objectively defined in the procurement and for which risk of performance is
manageable. Also, contractors reimbursed on a final negotiated rate basis tend to find improved methods of performance to increase their profits.
There are a variety of approved methods to determine an estimate of reasonable and necessary expenditures per unit of service being purchased. These include, but are not limited to, the following:
a. A total operational budget allocated to service component;
b. The published rates of the contractor for non-contract clients;
c. The established community rate for a similar service;
d. The previous year's audit; and
e. The contractor's cost study.
3. Actual Cost
a. Actual cost reimbursement is based on a complete itemized listing of allowable program expenses.
b. The total itemized listing should equal the total DHS funding in the contract.
c. Actual cost reimbursement is appropriate for services that can only be defined in general terms or for which the risk of performance is not reasonably manageable. For actual cost reimbursement, the division should seriously consider what costs are to be allowable and what costs are unallowable. This requires reliance on the division's experience, knowledge, and historical data from similar contracts.
d. Federal reporting has demonstrated that converting from actual cost reimbursement to a rate based reimbursement has significantly reduced contract prices.
4. Scheduled Reimbursement
a. Scheduled reimbursement -
actual cost basis
(1.) Scheduled reimbursement on an actual cost basis is based on a schedule of costs or a line-item budget that is on file with the division. Schedule shall include a statement identifying the basis for reimbursement.
(2.) The schedule should include the total dollar amount allocated to each program with compensation and reimbursable indicated.
(3.) The schedule should clearly indicate that payments are based on actual expenditures incurred and no advance payments are allowed.
(4.) The schedule should indicate the anticipated date and amount of each payment.
(5.) Invoicing requirements, expenditure reporting and payment adjustments shall be addressed in the schedule as applicable.
(6.) As with actual cost reimbursement, scheduled reimbursement on an actual cost basis is appropriate for services that can only be
defined in general terms or for which the risk of performance is not reasonably manageable.
(7.) Again, federally reporting indicates agencies significantly reduce their contract prices when converting from actual cost-based reimbursement to a rate based reimbursement.
b. Scheduled reimbursement -
fee basis
(1.) The schedule shall include a statement identifying the basis for reimbursement.
(2.) The schedule should set payment limits for the funding sources listed.
(3.) Contractors should submit invoices with documentation of services provided applicable to each of the funding sources. Payment on each invoice is limited to the corresponding amount on the payment schedule.
(4.) The schedule should indicate the anticipated date of payment, amount of each payment, and total applicable funding
(5.) Payment adjustments shall be addressed in the Schedule if applicable.
F.
Payment Limitations
The division may impose payment limitations on certain funding sources to be able to maintain payment capabilities to all contractors and/or to levelize payments to contractors throughout the contract period. Payment cuts to contractors necessitated by payment limitations are restored in subsequent payments within the contract period. Common payment limitations include Monthly Cumulative and Quarterly Cumulative.
1. Monthly Cumulative *
2. Quarterly Cumulative *
III.
Development of Standard PCS Contracts
A. The DHS standard is that CSS develops all standard PCS contracts upon receipt of authorizations from the DHS divisions requesting such contracts.
NOTE:
CAP
is the electronic system through which contracts are authorized, developed, reviewed, approved, and signed.
* The division requesting contract development shall submit ALL"-authorizations to CSS in electronic format.
* CSS shall develop and review contracts electronically.
* Division Director or designee shall review contracts and indicate approval of such electronically.
* ACO shall print contracts for manual signature by the contractors following-\ electronic review and approval by division Director or designee.
B. The following procedures apply to development actions executed by CSS (for development actions executed by the division, proceed to
C. below).
1. Division shall include the following in its authorization:
a. Completed
Contract Authorization/Input Form, Form DHS-9190
(1.) Most contracts must be entered into Arkansas Administrative Statewide Information System (AASIS) as an outline agreement.
(a.) If the contract is to be paid in AASIS through a PO and the division is doing its own AASIS entry, the division shall create the outline agreement in AASIS and enter the outline agreement number on the Form DHS-9190 as the contract number.
(b.) If the contract is to be paid in AASIS through a PO and CSS is doing the division's AASIS entry, the division shall leave blank the contract number field on the
Form DHS-
9190.
(2.) Some Medicaid-related contracts are paid through a third party and are NOT entered into AASIS as outline agreements, in which case the division shall leave the contract number field blank. CSS shall enter a unique, division-specific, ten-digit contract number on the
Form DHS-9190 upon receipt of the authorization. The contract number shall be in the following format:
* 3-digit agency number (710 or 645)
* 2-digit division identifier (as identified in Form DHS-9190 instructions, e.g., DM, etc.)
*_2-digit state fiscal year identifier (e.g.,, SFY05 would be
"05") *_
3 -digit sequential numerical identifier starting with 001
(3.) Division shall clearly identify the geographical service coverage area in the space provided on the DHS-9190. Division shall identify the area in terms of actual counties served or geographical portion of the state (ex., northwest quadrant, etc.) as opposed to division-specific areas (ex., DCFS Area V, etc.) If the contract covers services for the entire state, division shall identify "statewide" as the service coverage area.
b. CSS-approved performance based standards and evidence of CSS
annrnual nr Hiuicinn rfarfifiratinn-
c. A copy of the contractor's EEO policy (or approved alternate statement), if the contract were competitively procured and exceeds
$25,000.00;
d. Any other legal attachments, including required financial information;
e. Any additional information necessary concerning billing, forms the contractor is required to use, procurement documentation, etc.
2. Upon receipt of the authorization, assigned CSS individual(s) shall review the authorization, consult with the contractor, complete the contract proposal, and review the completed proposal for technical compliance and completeness.
NOTE:
For contracts exceeding $25,000.00, that are with a non-State agency, contract developer shall verify that contractor has a current certification on the OSP website that he/she does not employ or sub-contract with any illegal immigrants. "Current" is defined as within 30 days prior to the date contract developer checks the website.
NOTE:
The following instructions for standard, PCS contracts pertain to those executed"-on the Form OSP-1. For those executed on the alternate format, see Chapter Eleven.
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C.
The complete standard PCS contract shall include the following items:
1.
Form OSP-1;
a.
It is ABSOLUTELY CRITICAL
* that the funding tally to the penny, -<
* that the funding percentages are accurate, and
* that the procurement methodology is correctly indicated!!!
Failure to have 100% accuracy in any of these three crucial areas will result in the legislative review staff rejecting the contract!!
b. The contract name should be the complete, legal name of the contractor as opposed to the "doing business as" name. For incorporated entities, the legal name is found on the contractor's incorporation papers and on the Arkansas Secretary of State website (for Arkansas incorporated entities). The contract address should be the address of the legal headquarters, as opposed to the "remit to" address.
2.
All attachments referenced on Form OSP-1;
All attachments should be numbered in sequential and consistent form.
3.
Form PCS-D (for applicable contracts over $25,000.00);
a. All disclosures requiring pre-approval by DFA should be resolved prior", to completion of the contract.
b. The Form PCS-D shall not be made a legal attachment.
4.
Performance Based Standards (Required for applicable PCS contracts over $10,000.00);
a. Performance based standards require approval of CSS according to DHS Policy 1066. This approval should be in the form of electronic mail submission.
b. For amendments or contracts using previously approved performance based standards, the division shall provide certification of performance based standards, in accordance with DHS Policy 1066. If the division certifies for performance based standards previously approved by CSS (prior to the development of this contract), a copy of CSS' approval shall also be included.
c. Performance based standards shall be made a legal attachment. CSS' approval and division certification should be included in supporting documents.
5.
Terms and Conditions, Forms DHS-9193 and DHS-9194;
a. This document contains the legal and financial terms of the contract.
Form DHS-9193 is for contracts with a non-state agency;
Form DHS-9194 is for contracts with a state agency.
NOTE: The state agency version (Form DHS-9194) is applicable to contracts with other states' agencies (ex., OK, TX, MS, etc.), not just Arkansas's state agencies.
b. The Form DHS-9193 or Form DHS-9194 shall be the current version provided by CSS (as will be evidenced by the release date at the bottom of each page of the form). Referral to and/or consultation with OCC is required if an alternate version is to be utilized.
c. This document shall be made a legal attachment.
6.
Budget/Rate Information;
a. For contracts reimbursed on an
Actual Cost basis
(1.) An itemized listing of allowable program expenses and justification are required elements. The total itemized listing should equal the total DHS funding in the contract.
(2.) Each line-item expense should be identified as either compensation or reimbursable expense, and the total compensation and total reimbursable expense should be indicated on the itemized listing.
(a.) If subcontractor costs are included in the contractor's budget AND if those subcontractors are reimbursed on an Actual Cost basis, the subcontractor costs should be split between compensation and reimbursable expenses as well, based on the subcontractor's budget that must be included in the contract. If subcontractor costs are paid on a fee basis, they shall be considered compensation.
(b.) Indirect Costs should normally be split between compensation and reimbursable expenses by the same percentages by which the Direct Costs are split between compensation and reimbursable expenses.
(3.) If the contract identifies purchased services to DHS clients, (i.e. indicates or refers to service(s) by service name and service code on the
Form DHS-9190) the itemized listing should include:
(a.) service name(s);
(b.) service code(s); and
(c.) service unit definition(s).
(4.) The itemized listing of expenses shall be indicated on the Form OSP-1 or made a legal attachment.
b. For contracts reimbursed on a
Fixed or Final Negotiated Rate basis
(1.) The contracted fee/rate schedule shall be included.
(2.) If the contract identifies purchased services to DHS clients, (i.e. indicates or refers to service(s) by service name and service code on the
Form DHS-9190) the itemized listing should include:
(a.) service name(s);
(b.) service code(s);
(c.) service unit definition(s); and
(d.) unit rate(s).
(3.) The schedule should indicate the number of units per service to be purchased, if applicable.
If the number of units per service cannot be evenly computed, the number of whole units possible should be indicated, along with a notation that payment cannot exceed the maximum liability.
(4.) For budget-based Final Negotiated rates, the rate schedule should include a notation that it is based on a budget that is on file with the division.
(5.) For non-budget-based Final Negotiated rates, the basis for the rate should be noted in the rate schedule.
(6.) Subcontractor costs should normally be considered as compensation for Fixed or Final Negotiated rate contracts.
(7.) The fee/rate schedule shall be indicated on the
Form OSP-1 or made a legal attachment.
Note: If the division has a specific request and justification for including program-specific budgets and/or a full-disclosure budget as a part of the contract, they may be added as legal attachments. CSS will review the program-specific budgets, but not the full-disclosure budgets.
c. For contracts reimbursed on a
Scheduled Reimbursement basis
(1.) The schedule shall include a statement indicating the basis for the scheduled reimbursement (actual cost or fee basis).
(2.) For scheduled reimbursement on an actual cost basis, the total amount allocated to each program shall be indicated, with compensation and reimbursable identified.
(3.) The schedule shall indicate the total amount of applicable funding, the amount of each payment, and the dates of payments. The first payment should be no earlier than three weeks after the effective date of the contract.
(4.) The schedule of payments should include expenditure reporting requirements and payment adjustment conditions, if applicable.
(5.) The schedule shall be indicated on the Form OSP-1 or made a legal attachment.
d. The method of reimbursement shall be correctly identified on the Form DHS-9193 or Form DHS-9194.
D. Other elements may be required to complete the standard PCS contract. They include, but are not limited to:
1.
Sole Source Documentation;
Sole Source PCS contracts, except for those for performing artists and lecturers, must be justified.
a. For
"Sole Source by law," reference the mandating legislation or the court order
number on page 1 of
Form OSP-1 il ilili iiili
piivacy.
b. For "Sole Source by Intent to Award", include a copy of OCC's approval (if required*), the advertisement, and the dates the advertisement ran.
c. For "Sole Source by Justification Approved by OSP," include a copy of the division's justification and of OSP's approval.
d. The Sole Source documentation shall not be made legal attachments.
*
,OCC approval is required if the advertisement advised of an "intent to award"' a contract". OCC approval is NOT required if the advertisement advised of an " "intent to conduct a formal competitive procurement".
2.
Prior Approval for RFQ Selection;
a. Prior approval from DFA is required for RFQ procurements (except for contracts for architect, engineer, land surveying, or legal services, in the case of RFQ.)
b. This approval shall not be made a legal attachment.
3.
EEO Policy;
a. Contracts that were competitively procured and that exceed $25,000.00 must include a copy of the contractor's EEO policy, or a statement from the contractor attesting that they do not have an EEO policy.
b. This information shall not be made a legal attachment.
4.
Certification Regarding Lobbying;
a. Certification is required for all contractors that receive in excess of' $100,000.00 in federal funds per Federal fund source per fiscal year. This pertains to all federal funds received by the contractor, not just the federal funds in this contract.
b. This certification is contained within the standard Terms and Conditions. If alternate Terms and Conditions are used that do not include this certification, certification shall be indicated on Form DHS-9350, if certification is required.
c. Certification requires an original signature and date by the contractor.
d. Certification shall be made a legal attachment to the contract.
5.
Funding Availability;
a. A Funding Availability statement should be added to any contract that has funding within the contract with effective dates (beginning and/or ending dates) that differ from that of the overall contract.
b. The Form DHS-9196, Funding Availability, or any similar format that clearly states the necessary information, may be used for this purpose.
c. The Form DHS-9196 (or alternate format for the same purpose) shall be made a legal attachment to the contract.
6.
Matching Terms;
a. Specification of matching terms is required when funds included in the contract have a required match from state and/or local funds. (If the standard Terms and Conditions are utilized, no additional documentation regarding matching arrangements is required.)
b. This specification shall be made a legal attachment.
7.
Reimbursement Rate Increase Approval, Form DHS-1951;
a. Rate increase approvals are not effective until the date of signature by the Governor of Arkansas on the Form DHS-1951.
b. An approved Form DHS-1951 is required for rate increases for services. Note exceptions in Chapter Nine of this Manual.
c. The Form DHS-1951 shall not be made a legal attachment.
8.
Independent Contractor Checklist, Form DHS-9356;
a. If the contractor is an individual or sole proprietor, the division shall complete the Independent Contractor Checklist, Form DHS-9356, and shall obtain OCC's approval to contract with an individual or sole proprietor.T
b. The purpose of this documentation is to assess and confirm the status of the individual or sole proprietor as an independent contractor rather than a DHS employee.
c. The Form DHS-9356 and OCC approval shall not be made legal attachments.
9.
Waivers of Policy;
a. The requesting division Director or designee should obtain approvals for waivers of any DHS promulgated policy from the DHS Chief Fiscal Officer or designee.
b. Waiver approvals shall not be made legal attachments.
10.
Certificate of Authority from the Secretary of State;
a. The Certificate of Authority or documentation of its issuance is required for contracts with out-of-state corporations transacting business in Arkansas. (See "Foreign Corporations Transacting Business in Arkansas" in Appendix.)
b. If the out-of-state contractor does not provide services in Arkansas or is otherwise exempt (see "Foreign Corporations Transacting Business in Arkansas" in Appendix), a Certificate of Authority is not necessary.
c. This certificate shall not be made a legal attachment.
11.
Suspension of the Rules Letter (see sample letter in Appendix);
a. This letter is required for all contracts requiring legislative review that are submitted to DFA after the date due to DFA.
b. This letter shall not be made a legal attachment.
12.
Business Associate Agreement (BAA), Form DHS-4001;
a. BAA's, when required, are to be signed by the contractors to demonstrate their compliance with the Health Insurance Portability and Accountability Act (HIPAA) and included as legal attachments to the standard PCS contract.
b. BAA's are required for ALL new standard PCS contracts with the following divisions:
(1.) Division of Children and Family Services (DCFS);
(2.) Division of Developmental Disabilities Services (DDS);
(3.) Division of Behavioral Health (DBH);
(4.) Division of Youth Services (DYS); and
(5.) DMS.
c. BAA's are required for new standard PCS contracts with the following divisions ONLY IF those contracts deal with protected healthcare information (PHI):
(1.) DHS;
(2.) OFA; and
(3.) OCC
d. BAA's are NOT required for new standard PCS contracts with the following divisions:
(1.) Division of Childcare and Early Childhood Education (DCCECE);
(2.) Division of Services for the Blind (DSB);
(3.) Division of Volunteerism (DOV);
(4.) Division of County Operations (DCO); and
(5.) Division of Aging and Adult Services (DAAS).
13.
Tobacco Settlement Attachment.
In accordance with Act 1586 of 2003 and Act 2310 of 2005, PCS contracts funded by Tobacco Settlement funds shall include a legal attachment stating:
"The Division of_is not obligated to continue funding this contract paid from the proceeds of the Tobacco Settlement in the
event that Tobacco Settlement funds are not sufficient to finance the contract. State funds will not be used to replace Tobacco Settlement funds when such funds expire unless appropriated by the General Assembly and authorized by the Governor."
For standard PCS contracts, the source of funding shall be clearly identified on the Form OSP-1 and the funding shall be categorized as "Other".)
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IV.
Signing and Routing of Standard PCS Contracts
A. The division shall secure electronic approval of the division Director or designee on the contract proposal.
B. CSS ACO shall secure the signature of the contractor on the contract proposal.
C.
ACOCSS shall route the signed contract to Records Management Unit (RMU) for processing.
D.
_RMU shall route the contract to DFA.
EXCEPTION:
In accordance with ACA §19-' -
11-251,
inter-agency agreements for professional or consultant services executed on the alternate format do NOT require review by DFA.
V.
Legislative Review and DFA Approval of Standard PCS Contracts
A. Following their review of the standard PCS contract, DFA will forward those contracts that are over $25,000.00 for legislative review at the next regularly scheduled Review or PEER subcommittee meeting.
1. Review Subcommittee usually meets the first Wednesday of each month.
2. PEER Subcommittee usually meets the first Thursday of each month.
B. It is very important for the division to have knowledgeable representatives in attendance at the committee meeting to answer programmatic and budgetary questions about the specific contracts on the agenda as well as more general questions concerning the entire program. Typical questions that can be anticipated include:
1. What was the procurement method?
2. If the procurement were Sole Source, why was a competitive method not utilized?
3. If the procurement were competitive, how many responses were received and how did the other responses compare to that of the selected entity (including, at times, the relative comparison of cost proposals)?
4. What are the services being provided and how will contractor performance be monitored?
5. Where are the services provided?
6. What source of funding is being utilizedy and what are the future plans for this program?
7. If an out-of-state contractor were selected, what steps were made to find a qualified in-state vendor?
C. Upon completion of their review, the Review and PEER Subcommittees will send their recommendations to the Legislative Council for consideration.
D. Legislative Council, which usually meets the third Friday of each month, reviews the contract and provides OSP a report on their review and their findings as to the propriety of the contract.
E. Following receipt of the Legislative Council's report, DFA will approve or deny the PCS contract.
-AASIS-
VI.
Entry of Standard PCS Contracts into AASIS
A. For a standard PCS contract
over $25,000.00:
1. Upon approval of the contract by DFA, division shall approve the outline agreement, if necessary.
2. CSS shall coordinate OSP's approval of the outline agreement.
3. Contract Management/Comprehensive Annual Financial Report Unit (CMU) or the division shall create the PO, if necessary.
4. CSS shall coordinate OSP's approval of the PO.
B. For a standard PCS contract
$25,000.00 and under:
1. Upon approval of the contract by DFA, division shall approve the outline agreement, if necessary.
2. CMU or the division shall create the PO, if necessary.
JMOTE: The PO must accurately reflect the standard PCS contract in every aspect, including the compensation/reimbursable breakout, contractor name and address, and total funding.
VII.
Distribution of Standard PCS Contracts
A. Upon approval of the contract by DFA, RMU shall receive the original approved contract from DFA and post it to the DHS Contract Archival System (CAS).
B. RMU shall distribute a copy of the signed contract to the contractor.
C. RMU shall notify the division, the CSS Supervisor, and CMU that the contract is available in CAS.
D. RMU shall maintain the original contract on file in the Records Room. All requests for contract information from the RMU Records Room should reference the contract number.
VIII.
Reporting to OSP on Standard PCS Contracts exceeding $5,000.00 but not exceeding $25,000.00
A. DHS shall report electronically to OSP, at least monthly, ALL PCS contracts that were created which exceeded $5,000.00 but which did not exceed $25,000.00.
B. The entity which created the outline agreement is the entity responsible for submitting the report.
C. Reports are to be made online on the OSP website. Divisions may consult with CSS for more detail.
IX.
Amendments to Standard PCS Contracts
A.Timeframes
Amendments to standard PCS contracts should adhere to the same timeframes outlined for the development of new contracts.
B.
General Amendment Requirements "
1. Amendments to standard PCS contracts are required when any element on the Form OSP-1 or any of the legal attachments is revised to the extent that it materially affects the contractor or DHS in any way. The contracting parties shall mutually agree upon amendments.
2. Contracts can NOT be amended to add services that are outside the realm of the procurement for the original contract (ex., a division CANNOT procure for counseling services, develop a contract for counseling services, then add therapy services to the contract at a later date just because the need arises.)
3. Minor revisions or administrative corrections that affect only the internal administration of a contract do not require an amendment; these may be accomplished as "change" actions.
4. Changing a contractor's Taxpayer Identification Number (TIN) cannot be accomplished as a change or an amendment. To change a contractor's TIN, the contract with the former TIN must be closed and a
new contract with the new TIN must be created.
For this to be allowable without re-procuring, however, the new contractor must be virtually the same as the former in every respect except for the TIN. The new contractor shall complete a Form PCS-D, if required, and an individual authorized by the contractor shall sign an affidavit attesting to the following:
a. There has been no material change in ownership and the new contractor, although its corporate name may be different, is the same as the former contractor except for the TIN, AND
b. The new contractor will abide by all terms stated in the underlying procurement document(s) and any response(s) made by the original contractor.
If the new contractor is NOT virtually the same as the former contractor and/or the new contractor does not sign the affidavit, the division shall re-procure.
CHAPTER TEN
PROFESSIONAL/CONSULTANT SERVICES CONTRACTS
5. PCS contracts that have expired cannot be amended.
6. An amendment to extend a standard PCS contract into another state fiscal year is allowable ONLY if the following conditions are met:
a.
(ONLY for contracts procured RFQ or Sole Source)), OSP Director has given his/her approval for extension(s);
b. The procurement included information relative to the extension option(s); AND
c. The original contract contains language supporting the extension option(s) (the extension clause is found in Section 12 of the Form OSP-1i.
NOTE: The extension period added to a contract by an amendment should not cross the biennium.
7. All amendments to standard PCS contracts that add money require an amendment to the corresponding outline agreement and PO in AASIS, if applicable.
8. For every amendment to applicable PCS contracts over $25,000.00, a current signed and dated Form PCS-D shall be submitted for the contractor and all subcontractors receiving over $25,000.00 who are affected by this amendment.
9. Amendments to PCS contracts are not binding until they are approved by the DHS Director or designee and contractor and approved by DFA, if applicable.
10. The effective date of an amendment to extend an otherwise expiring contract shall be no later than the expiration date of the expiring contract.
11. Divisions should initiate all amendments, except for those necessitated for administrative purposes only and for amendments to contracts for the Together We Can (TWC) program.
12. For every amendment, the division should submit an electronic authorization to CSS to develop the amendment. (In those instances where the division developed their own PCS contract, they shall also develop the amendments to that contract.)
C.
Development of Amendments to Standard PCS Contracts
1. The following procedures apply to amendment development actions executed by CSS (for amendment development actions executed by the division, proceed to 2. below).
a. The amendment authorization from the division is required to include:
(1.)Completed Form DHS-9190
(2.) Any revised or additional attachments to the Form OSP-1, if applicable
(3.) Approval/certification of performance based standards
(a.)
Performance Based Contracting Certification must be completed by division staff, for current, unchanged performance based standards (the Form DHS-1366 may be used for certification.)
(b.) CSS approval is required for new or revised performance based standards.
b. Upon receipt of the amendment authorization, assigned CSS individual(s) shall review the authorization, consult with the contractor, complete the amendment proposal, and review the completed amendment proposal for technical compliance and completeness.
NOTE:
For amendments that extend the contract into another fiscal year (jF the contract amount exceeds $25,000.00 and jF the contract is with a non-..'
►State agency) contract developer shall verify that contractor has a current " certification on the OSP website that he/she does not employ or sub-contract ' with any illegal immigrants. "Current" is defined as within 30 days prior to the '
date contract developer checks the website.
2. The complete amendment package shall include, at a minimum, the
Form OSP-1A, Amendment to Professional/Consultant Services Contract.
NOTE: >
It is ABSOLUTELY CRITICAL that, if applicable,
the funding tally to the penny and *<
the funding percentages are accurate !!!
Failure to have 100% accuracy in either of these crucial areas will result in the legislative review staff rejecting the amendment!!!
3. Other elements that may be required to complete the amendment include but are not limited to the following:
a.
Form PCS-D
All amendments to non-exempt standard PCS contracts greater than $25,000.00 require disclosure on the contractor and on all subcontractors receiving over $25,000.00 who are affected by the amendment.
b.
Performance Based Contracting Certification
This is required from division for current performance based standards not changed by this amendment. Form DHS-1366 may be used for this purpose.
Note:
New or revised performance based standards require current CSS approval.
c.
New or Revised Attachments
Any new or revised attachments to the Form OSP-1 should be included and referenced appropriately on the Form OSP-1A.
(1.) An attachment is considered "new" when it is being added to the contract with this amendment. A new attachment "stands on its own" and does not replace any attachment that is already in the contract. A new attachment should be numbered consecutively in accordance with the existing attachments and should reflect an effective date commensurate with the effective
(2.) An attachment is considered a "revision" when it replaces an attachment that is already in the contract and covers the entire period of the attachment it is replacing. It should be assigned the same attachment number as the attachment it replaces and should reflect an effective date commensurate with the effective date of the amendment.
(3.) An attachment is considered an "addendum" to an existing attachment when it is being added to the contract with this amendment. An addendum is similar to a "new" attachment in that it does not replace any existing attachment BUT it closely relates to an existing attachment to which it is made an addendum. An addendum should be numbered as a subset of the relative attachment (ex., Attachment 1a, or Attachment 1, Addendum 1.) An addendum should reflect an effective date commensurate with the effective date of the amendment.
d.
Reimbursement Rate Increase Approval, Form DHS-1951
An approved Form DHS-1951 is required if the amendment increases rates for services. Note exceptions in Chapter Nine of this Manual.
e.
Suspension of the Rules Letter
This letter is required for all amendments requiring legislative review that are submitted to DFA after the date due to DFA (see sample letter in Appendix).
f.
Certification Regarding Lobbying, Form DHS-9350
This certification is required if the amendment results in contractor's funding exceeding $100,000.00 in federal funds per federal fund source per fiscal year. Certification should be indicated on Form DHS-9350, unless provided elsewhere in the contract, i.e., on the Form DHS-9193
or Form DHS-9194.
4. Signing and Routing of Amendments to Standard PCS Contracts Same as for standard PCS contracts above.
5. Legislative and DFA Review of Amendments to Standard PCS Contracts
An amendment to a standard PCS contract requires review and approval by DFA, and review by the Review or PEER Subcommittee if, and only if:
a. The amendment involves a major change in the objectives and scope, -OR
b. The original contract required review and the amendment increases the dollar amount to a resultant total that is higher than any amount previously approved by DFA; OR
c. The original contract did not require review but the amendment increases the total to exceed $25,000.00.
6. Entry of Amendment to Standard PCS Contracts into AASIS
Upon approval of the amendment, CMU or division shall revise the outline agreement and PO accordingly, if necessary.
7. Distribution of Amendment
a. Upon approval of the contract by DFA, RMU shall receive the original approved amendment from DFA and post it to CAS.
b. RMU shall distribute a copy of the signed amendment to the contractor.
c. RMU shall notify the division, the CSS Supervisor, and CMU that the contract is available on CAS.
d. RMU should maintain the original contract on file in the Records Room. All requests for contract information from the RMU Records Room should reference the contract number.
X.
Changes to Standard PCS Contracts
A. Minor revisions or administrative corrections may be accomplished by a change action. Change actions affect only the internal administration of a contract and do not materially affect the contractor or DHS in any way.
B. Examples of actions that could appropriately be handled as "change" actions include:
1. A change in funding codes;
2. A change in address (IF the AASIS vendor number remains the same);
3. A line item adjustment
a. If deviation from the amount budgeted will not exceed $500.00 or 10% of the line item from which funds are being moved, whichever is greater, no line item adjustment is necessary.
b. A line item adjustment is allowable only if the total reimbursable and total compensation amounts are unchanged.
C. Change actions shall NOT be used for:
1. A change in total financial amount (either an increment or decrement);
2. A change in reimbursable and/or compensation amounts;
3. Any change in the percentage of state/federal funds;
4. A change in the overall rate per unit of service;
5. A change that adds a new funding source (fund, fund center, or commitment item)
D. The DHS standard is that CSS develops change actions for all standard PCS contracts upon receipt of authorizations from the division requesting such change actions. For those contracts that are developed by the division, the division shall develop the change action.
NOTE: -
CAP
is the electronic system through which change actions are authorized and developed.
* The division requesting a change action shall submit the authorization to-<' CSS in electronic format.
* CSS shall process the change action electronically. *<-
E. For change actions executed by the division, the division shall submit the completed change action to RMU electronically.
Stand-alone PO's
XI.
Stand-alone PO's for Professional and Consultant Services
A.
General requirements for stand-alone PO's for professional and consultant services
1. Divisions typically negotiate with the contractor the terms of the stand-alone"'
2. Any PCS contract that DOES NOT exceed $25,000.00 in compensation may>-be executed in the stand-alone PO format. A division may, however, if preferred, execute a PCS contract that does not exceed $25,000.00 as a "standard PCS contract"
.
Agencies shall NOT split known quantities into smaller ($25,000.00 and below) amounts to avoid a standard contract.
3. Stand-alone PO's normally require neither DFA review and approval nor legislative review. However, multiple PO's to the same contractor in the same fiscal year from the same cost center MUST be reported to OSP to assist OSP in determining whether an agency is issuing multiple PO's in an attempt to circumvent the requirement of establishing a standard PCS contract.
4. Procurement regulations apply to stand-alone PO's just as they do to"" standard PCS contracts, including the requirement for prior approval by OSP for Sole Source or RFQ.
5.
Performance Based Standards *<
a. Performance based standards are required for stand-alone PCS PO's"\ except for those which are as follows:
(1.) For Architectural and Engineering services, which are awarded using ABA criteria; or
(2.) For $10,000.00 or less
b. Performance based standards, when required, shall be added to standalone PO's in the following manner:
(1.) The division/office shall complete the Contractor Certification Concerning Performance, (Form DHS-9353 for a PO with a non-state agency or Form DHS-9354 for a PO with a state agency) and attach a copy of the applicable Performance Based Standards as Attachment I.
(2.) The division/office shall review the
Contractor Certification Concerning Performance and Performance Based Standards with the contractor and secure the contractor's signature on the
Certification.
(a.) One original certification per contractor, for each set of performance indicators, per fiscal year is sufficient.
(b.)
Copies shall be inserted in all subsequent contracts with that contractor for PO's with the same set of performance indicators executed in that fiscal year.
(c.) Contractor's signature certifies that he/she understands the signature is binding for ALL PO contracts utilizing those performance indicators during that fiscal year.
(3.) CSS approval of performance based standards is required, as it is for standard PCS contracts.
(4.) The division/office shall retain the Certification in the division/office files and give a copy to the contractor for each PO.
5. For those stand-alone PO's for professional and consultant services funded by SSBG, the division shall obtain the contractor's signature on the
Certification of Compliance for Social Services Block Grant (SSBG) Funding, Form DHS-9357.
a. One signature per contractor per fiscal year is sufficient. If a contractor has more than one PO with SSBG funding, a copy of the signed certification for each subsequent PO is sufficient. Faxed signatures are acceptable.
b. The division shall retain the original Form DHS-9357 in their files, giving a copy to the contractor.
c. In creating the PO in AASIS, the creator shall add the following text: "Vendor must adhere to all State and Federal laws and regulations applicable to Social Services Block Grant funding."
6. Stand-alone PO's for professional and consultant services require BAA's under the following conditions:
a. Those for the following divisions require BAA's IF the PO deals with
PHI:
. DCFS
DDS DBHS
DYS
DMS OFA OCC OST
b. Those for the following division do NOT require BAA's: . DCCECE
DSB
DOV
DCO DAAS
c. For stand-alone PCS PO's for TWC, division director signature is not required on the BAA. The division shall complete the division director portion of the form as follows:
(1.) Enter "NA" for "Signature of ADHS Program Authorized Representative".
(2.) Enter the date the form was signed by the contractor for "date".
(3.) Enter Director name and Division name for "Printed Name of ADHS Program Authorized Representative."
(4.) Enter "Director" for "Title".
7. For stand-alone PO's for professional and consultant services that contain
Tobacco Settlement funding, division shall add the following text to the PO
in AASIS:
"The Division of_ is not obligated to continue funding this contract paid from the proceeds of the Tobacco Settlement in the event that Tobacco Settlement funds are not sufficient to finance the contract. State funds will not be used to replace Tobacco Settlement funds when such funds expire unless appropriated by the General Assembly and authorized by the Governor."
B.
Development of Stand-alone PO's for Professional and Consultant Services
1. Upon selection of a contractor through appropriate procurement means and after direct communication with the contractor concerning the terms of the agreement reached, the division shall enter a requisition into AASIS reflecting all of the details that need to be incorporated into the PO.
2. Division shall create their own PO in AASIS from the requisition or forward the requisition in AASIS to CSS for the creation of the PO.
C.
Reporting to DFA on Stand-alone PO's for Professional and Consultant Services
1. DHS shall report electronically to OSP, at least monthly, ALL such standalone PO's that were created which exceeded $5,000.00 but which did not exceed $25,000.00.
2. The entity which created the PO is the entity responsible for submitting the report.
3. Reports are to be made online on the OSP website. Divisions may consult with CSS for more detail.
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XII.
Site Visits for PCS Contracts
A.
Definition
Site visits are a means of on-site contract monitoring by CSS of the following:
1. All PCS contracts over $5,000.00 developed by CSS; and
2. Those PCS contracts over $5,000.00 that contain SSBG funding which are developed by the division.
Site visits are not required for ABA-related PCS contracts.
B.
Purpose
The purpose of site visits is to monitor contract activity and assist contractors in achieving and maintaining compliance with billing and client eligibility requirements
of the contract. Site visits address fiscal, administrative and legal advisories and eligibility/billing audits.
C.
Policy
For each applicable PCS contract requiring a site visit, ACO should make a minimum of one site visit per contract year. This pertains to standard PCS contracts as well as stand-alone PCS PO's.
XIII.
Billing for PCS Contracts
For those PCS contracts developed by CSS, CSS shall:
A. Provide instructions on billing, if necessary; "
B. Explain any special requirements for specific funding sources (ex., SSBG);
C. Supply billing forms or letter bill format, if necessary
XIV.
Records Retention for PCS Contracts
A. DHS should retain all PCS contract information for a minimum of five years after the contract ends or is terminated. Contracts containing HIPAA-related information must be retained for a minimum of six years. This includes, but is not limited to, the following information:
1. Original contract, amendments, and all related documents, correspondence,
etc.;
2. Contractor billings;
3. Site visit reports;
4. Audit reports and findings; and
5. Procurement documentation.
B. In the event any audit, litigation, or other action is initiated before the end of the five year period, records should be retained until all issues arising out of the action are resolved or until the end of the five (or six) year period, whichever is later.
CHAPTER ELEVEN
INTRA-AGENCY AGREEMENTS -
I.
Policy
A. Intra-agency agreements are used when one DHS division purchases services from another DHS division.
B. In accordance with ACA §
19-11-203, intra-agency agreements are exempt from the Arkansas Procurement Law and Regulations.
C. Intra-agency agreements require neither DFA nor Legislative review or approval.
D. The initial term of an intra-agency agreement shall not extend past the end of the--
biennium.
E. Intra-agency agreements may be amended to extend for a total period of no more than seven (7) years.
F. Intra-agency agreements
MAY or MAY NOT be entered into AASIS as PO's, as determined by documented collaborative consultation with Assistant Director, Managerial Accounting, OFA.
1.
If the circumstances are determined to be a genuine purchase of service,-the agreement shall be entered into AASIS as an Outline Agreement against "
which PO's shall be created for payment.
<\
2.
If the circumstances are determined to be administrative flow through from--the funding division to the service division AND if the funding is NOT ,100%
State General Revenue,
the agreement shall typically not be entered into \ AASIS as a PO. Instead, the service division shall be paid by the funding division by the funds transfer mechanism. This is normally the most accurate accounting approach to avoid the confusion of "double-booking" external income to DHS overall as reflected in AASIS.
3.
If the circumstances are
.administrative flow through AND
if the funding JS-\ 100% State General Revenue,
typically an associated PO must be created and used to document payments as though the transaction were a purchase \ of service. This avoids audit confusion with transactions involving budget line item redistribution of 100% State General Revenue between program divisions, which must be approved through PEER Committee as Resource Reallocation Requests. iI-Iiiii iiiiiiei
II.
Procedures
A. The DHS standard is that CSS develops all intra-agency agreements upon receipt of authorizations from the funding division requesting such actions.
B. The authorization from the funding division is required to include:
1. Completed Contract Authorization/Input Form, Form DHS-9190; -
2. If desired by the funding division, CSS-approved performance based"-standards and evidence of CSS approval or funding division certification; and
3. If desired by the funding division, any other legal attachments.
C. Upon receipt of the authorization from the funding division, assigned CSS individual(s) shall review the authorization, consult with the service division, complete the agreement proposal, and review the completed proposal for technical compliance and completeness.
D.
The complete intra-agency agreement shall include the following items:
1.
Form DHS-9197, Intra-agency Agreement
2. Any legal attachments required by the funding division
CHAPTER TWELVE
INTER-AGENCY AGREEMENTS -
Policy
A.
Jn accordance ;with the rules and jegulations promulgated under ACA §
19-11-251, inter-agency agreements for professional or consultant services may be executed on
an alternate format from the standard Form OSP-1. Inter-agency agreements are defined as those between a DHS division and another state agency. The alternate
format designed for this purpose is the DHS-9198, Inter-agency Agreement (and the DHS-9198A for amendments). "
B.
Use of this alternate format requires the prior approval of the OSP Director.-\ Interested parties should coordinate those requests through the CSS Program " Administrator.
C.
In accordance with ACA §
19-11-203, inter-agency agreements are exempt from the
Arkansas Procurement Law and Regulations.
D.
Inter-agency agreements developed under this code require neither DFA nor Legislative review or approval.
E.
The initial term of an inter-agency agreement shall not extend past the end of the biennium.
F.
Inter-agency agreements may be amended to extend for a total period of no more than seven (7) years.
G.
Inter-agency agreements shall be entered into AASIS as Outline Agreements against--which PO's shall be created for payment.
II.
Procedures
A.
The DHS standard is that CSS develops all inter-agency agreements upon receipt of authorizations from the funding division requesting such actions.
B.
The authorization from the funding division is required to include:
1.
Completed Contract Authorization/Input Form, Form DHS-9190; *<
2.
If desired by the funding division, CSS-approved performance based-
standards and evidence of CSS approval or funding division certification; and
3.
If desired by the funding division, any other legal attachments.
C.
Upon receipt of the authorization from the funding division, assigned CSS individual(s) shall review the authorization, consult with the service agency, complete the agreement proposal, and review the completed proposal for technical compliance and completeness.
D.
The complete inter-agency agreement shall include the following items:
1.
Form DHS-9198, Inter-agency Agreement
2.
Any legal attachments required by the division.
E.
RMU shall process completed agreements through to digital file and distribution.
CHAPTER THIRTEEN
-CONTRACT INVOICING
I.
Procedures
A. For those contract payments processed through CMU, It takes approximately seven to ten working days from the time an invoice reaches CMU for a warrant to be printed and ready to mail. Before any invoice is approved for those payments processed through CMU, the following requirements must be met:
1. CMU should have access to the legal document for use in monitoring the payment request. All original signed contracts should be on file in the CSS Records Room and available in the archival system.
2. Each contractor should have a Request for Taxpayer Identification Number and Certification form (W-9) on file with OFA before payment can be processed. W-9 Forms may be obtained from the Internal Revenue Service office.
3. Providers should comply with the DHS audit requirements as outlined in
Arkansas Department of Human Services Audit Guidelines. Copies may be obtained from
Arkansas Department of Human Services Office of Chief Counsel Audit Section P.O. Box 1437 - Slot S270 Little Rock, Arkansas 72203-1437
4. Invoices should be submitted to the division with which the contractor has a legal agreement unless the contractor is given other instructions.
5. The division should check all invoices and indicate their approval with a full, legible signature, date, and the words "Approved to Pay". These should be routed to CMU as soon as possible for processing.
B.
Summary of DHS Invoice Procedures
1. An original invoice is required to process a payment. If the invoice is handwritten (as with smaller companies), the invoice must have an original signature, title, and date.
2. The name of the company or payee must be on each invoice.
3. The PO number shall be indicated on the invoice, if applicable.
4. All invoices must be billed to the agency.
5. The invoice must have a complete description of the goods or services being billed.
6. Invoices for services must have the date(s) of service.
7. The invoice must have the unit price and number of units billed or the lump sum price being billed; this information must agree with the terms of the
applicable contract or sub-grant. The invoice must also include the total *
8. If two or more names, corporate entities and/or addresses are printed on the invoice (for example, in the case of collaboratives, coalitions, etc.) the letterhead used for invoices must be that specifically of the payee, matching the applicable Form W-9 and AASIS vendor number.
9. The invoice must not contain abbreviations. These are not standardized and may cause AP staff to return the invoice for explanation.
10. If the invoice is to be paid by direct deposit, the invoice should include the notation "DIRECT DEPOSIT" in the upper right hand corner.
11. If the invoice is to be paid separate and apart from other invoices, the invoice should include the notation "SEPARATE PAYMENT" in the upper right hand corner.
12. For contracts reimbursed on an actual cost basis, the invoice should identify all expenses as compensation or reimbursable.
13. CMU staff will correct payment requests submitted without all of the above information if possible. All verbal changes agreed to by the program division and the contractor/sub-grantee should be documented on the invoice. The CMU staff person should indicate "Approved to Pay," sign and date the request, and forward to AP.
14. Prior to the end of the state's fiscal year, CMU should submit information to all contract service providers and to all divisions regarding instructions for end-of-year billings.
II.
Contractor Expenditure Reports
A. Contractors may be required by the terms of the contract to submit periodic expenditure reports. These reports should be submitted as required or payment requests will be held in a pending status. The format of the expenditure report should agree with the budget in the contract. Reports should be mailed to
Arkansas Department of Human Services
Contract Management/Comprehensive Annual Financial Report Unit P.O. Box 1437 - Slot W205 Little Rock, Arkansas 72203-1437
B. For contracts reimbursed on a scheduled reimbursement basis, CMU may reconcile actual expenditures against the payment schedule and offset scheduled payments, if required by the terms of the contract.
III.
Monitoring for Contract Compliance
Requests for payment not complying with all terms of the signed agreement will be held in pending status by CMU or AP until resolved.
IV.
Recovery of Overpayments
All recognized overpayments should be forwarded to the Accounting Supervisor, CMU. The Accounting Supervisor will draft collections correspondence for signature by the Assistant Director, CSS, and route recovery of funds through AR.
V.
Settlements
All agreements that require settlement should be reconciled as soon as possible following expiration of the agreement. Each contractor should be notified in writing of all amounts payable or receivable requirements and the procedures necessary to accomplish the settlement.
VI.
Internal Revenue Service (IRS) Levies
All IRS levies will be forwarded to CMU. The CMU Accounting Supervisor will receive and forward all payments specified to the IRS until notified that the levy has been satisfied or released.
Appendix
State of Arkansas SECRETARY OF STATE
State Capitol Little Rock, Arkansas 72201-1094
FOREIGN CORPORATIONS TRANSACTING BUSINESS IN ARKANSAS
A foreign corporation may not transact business in this state until it obtains a Certificate of Authority from the Secretary of State.
The following activities, among others, do not constitute transacting business as stated in A.C.A. §
4-27-1501(B):
1. Maintaining, defending, or settling any proceeding;
2. Holding meetings of the board of directors or shareholders, or carrying on other activities concerning internal corporate affairs;
3. Maintaining bank accounts;
4. Maintaining offices or agencies for the transfer, exchange, and registration of the corporation's own securities or maintaining trustees or depositaries with respect to those securities;
5. Selling through independent contractors;
6. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;
7. Creating or acquiring indebtedness, mortgages, and security interests in real or personal property;
8. Securing or collecting debts or enforcing mortgages and security interests in property securing the debts;
9. Owning, without more, real or personal property;
10. Conducting an isolated transaction that is completed within thirty (30) days and that is not one in the course of repeated transactions of a like nature;
11. Transacting business in interstate commerce.
Corporations which fail to obtain a Certificate of Authority may not maintain a proceeding in any court in this state based on a cause of action arising from the transaction of business and may be found liable for civil penalties ranging from $100 to $5,000.
For information regarding the application seeking authorization to do business in this state please write,
Secretary of State Corporation Department Room 058 State Capitol
Little Rock, Arkansas 72201-1094 (501) 682-3409
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