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DEO LIHEAP Policies and Procedures Manual Page 35

5. The LIHEAP supervisor or edit staff should review all payments to households claiming zero income or having roomers, boarders or landlords. .12 Overpayment and Recoupment The subrecipient must have a written policy that describes action to be taken when LIHEAP payments made to a vendor cannot be applied to the client’s account. The policy must state that the funds will be returned to the subrecipient or with the subrecipient’s approval, applied to another eligible customer’s account. A. Overpayment means money not entitled to and received by the applicant. An error by the applicant or subrecipient can cause overpayment. Despite the reason or the source of the error, the subrecipient must try to recover all identified overpayments. Federal reviewers, auditors, subrecipient staff, the Department, the household, or the state auditor general's office can identify overpayment. B. Overpayments can be caused by: 1. Errors on the part of staff reviewing the application. 2. Errors made by the applicants (omissions, misunderstandings). 3. Misrepresentation by applicants in order to commit fraud. 4. Federal reviewers, auditors, subrecipient staff, DEO, vendors, and even applicants can identify overpayments or incorrectly applied benefits. C. Procedures for recoupment of overpayment: 1. Determine the exact amount and cause of overpayment and record in the case record. 2. Either send an explanatory letter to the applicant requesting repayment or send a letter to the applicant scheduling an explanatory office interview. 3. Follow through with additional contact as needed to initiate repayment. 4. Set up a payment schedule with the Applicant if needed. 5. The subrecipient cannot retrieve a vendor payment from the vendor without agreement from both the applicant and the vendor unless contacting the applicant is impossible. 6. The subrecipient should record the following on the "overpayment": list name, social security number, amount owed, amount repaid, date repaid, and balance. The information should be updated after each payment. A copy of the repayments should be kept in the applicant’s case record.