Eshibit_I.pdf

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

Federal Housing Administration Single Family Post Insurance Division/ Single

Family Claims Branch

Single Family Comprehensive Support Services Procedures

EXHIBIT 1

PROCESSING OF MAIL AND BATCHING CLAIMS (OFF-SITE)

All incoming mail received must be processed the same day it is received. Once the mail is received and opened, all documents must be date stamped using the date of receipt.

After the documents have been date stamped, they must be sorted into the following categories:

1. New Supplemental Claims

2. Corrected Supplemental Claims Returned by Lenders

3. Miscellaneous Documents

4. Supporting Documents for Original Claims

A database is maintained to track incoming supplemental claim packages.

Information for every supplemental claim must be entered into the database which must contain the following categories:

1. Received Date

2. Tracking Number

3. All FHA Case Numbers in Supplemental Claim Package

4. Initial Pre-Screen Results (using the number system below) and date the

Supplemental Claim package was returned to the mortgagee (only if returned to mortgagee)

The database will be maintained daily with all incoming supplemental claims logged with the received date of the supplemental claim package, the tracking number, all FHA Supplemental Claims (by FHA case number) and if the claim fails the Pre-Screen instructions, indicate why the supplemental claim was returned to the mortgagee using the following reasons:

1. Missing Part A, Form HUD-27011, Supplemental Claim (Claim Type 05), with signature.

2. Missing signature on attached Part A, Form HUD-27011, Supplemental Claim.

3. Missing signature on attached Part B, Form HUD-27011, Supplemental Claim.

4. Missing Claim Preparation Date in Block 6 of attached Part A, Form HUD-

27011.

5. Incorrect Claim Type marked in Block 1 of attached Part A, Form HUD-27011.

6. Invalid or incomplete FHA case number on attached Part A and/or B, Form

HUD-27011, Supplemental Claim.

7. Illegible Claim Forms/Documents attached.

8. Missing Holding Mortgagee Information in Block 12 or 35 of attached Part A, Form HUD-27011, Supplemental Claim.

9. Missing Servicing Mortgagee Information in Block 13 or 36 of attached Part A, Form HUD-2701, Supplemental Claim.

10. Computer generated forms using unacceptable format and form size (must be 8

½” x 11”)

11. Other (Specify)

Time Requirement: Within 24 hours (1 business day), information must be provided to the GTM upon request. It is important to ensure the data is kept safe and up to date because it serves as a critical verification resource when lenders question whether supplemental claims are received within HUD’s specified timeframes.

METHOD: Microsoft Excel

After the supplemental claims have been date stamped, logged and sorted, New Supplemental Claims are pre-screened using the HUD-approved check list. The checklist is used to verify the required information on the claim form. Pre-screened supplemental claims are sorted into these categories:

Failed Pre-screening

If any of the items on the checklist are missing or incorrect the claim has failed pre-screening. These claims are returned to the originator following these steps:

1. Prepare the HUD return letter and provide the reason(s) for return.

2. Date stamp the HUD return letter using the current date.

3. Make a copy of the HUD return letter and the entire supplemental claim package to be retained. Place the original HUD return letter and supplemental claim package in an envelope provided by HUD.

4. The envelopes are to be delivered to the mail room located within HUD Headquarters.

Passed Pre-screening

Supplemental claims that pass pre-screening are batched by received date, claim type and case number order. A batch cover sheet is prepared and placed on top of each batch.

After the mail has been opened and processed, any remaining documents should be distributed as follows:

1. Miscellaneous documents unrelated to Supplemental Claims processing shall be distributed in accordance with the distribution list provided by the GTM.

2. Supporting documents for original claims shall be delivered to the designated room at HUD Headquarters.

SUPPLEMENTAL CLAIMS REVIEW AND PROCESSING FOR FORWARD

MORTGAGES (CLAIM TYPE 05) (OFF-SITE)

The research, review, analysis, calculation and recommendation action for supplemental claims for forward mortgages require the following:

The GTM shall provide printouts from the batch release for that day. The claim files listed on the batch printout are reconciled to the actual claims included in the batch. Any supplemental claims on the batch printout with a BX, BY or BZ error codes are to be pulled from the claim batch and returned to the GTM within 24 hours.

The claim history is researched in the A43 and A43C systems as part of the claim analysis. After reviewing and analyzing the claim file, a written recommendation of action to be taken shall be prepared for each supplemental claim in accordance with HUD Handbook 4330.4, Mortgagee Letters and supplemental guidance. The recommendation actions include:

A. Payment – Data Entry Form

Enter accurate information on the Data Entry Form to avoid incorrect payments.

Attach the appropriate interest computation sheet, unpaid principal mortgage balance calculation sheet, mortgage insurance premium calculation sheet and other pertinent documents to support the information entered on the Data Entry Form.

Provide explanation with appropriate citations for disallowed item(s) on supplemental claim payment (if applicable).

B. Return to Mortgagee For Missing Documents/Additional Information

The HUD Return Letter prepared shall be comprehensive and precise. All the documents and corrections needed shall be addressed in the HUD Return Letter.

Supplemental claims missing documents and/or additional information shall not be returned more than once per FHA case number as the lenders are required to include all supporting documents in the initial supplemental claim submission.

Lenders may be contacted via email or phone if the document missing from the claim file or the correction needed to process the claim is minimal. Claims held awaiting lender’s correction/document shall be returned to the lender after 3 business days if the requested document/information is not provided. The lenders must be made aware of such the time requirement (3 business days).

Documents provided in the claim file shall not be requested.

C. Denial

The Denial Letter shall be precise and accurate. The reason for denial and the appropriate citation to support the reason for denial shall be provided on the Denial Letters.

The entire claim file shall be reviewed and analyzed thoroughly before denying the supplemental claim to prevent unnecessary appeals from lenders.

A supplemental claim shall be denied if the requested documents are not provided with the lender’s response to a HUD Return Letter for missing documents and/or additional information.

The entire denied claim package and Denial Letter shall be forwarded to the GTM for review prior to final processing.

D. Billing

The billing letter for funds due to HUD shall include a detailed explanation with appropriate calculation of the amount due. An explanation for any disallowed items shall be provided on the supplemental claim (if applicable).

A copy of the billing letter and a printout of the N06 account receivable records in A43C shall be attached to show transactions for each respective case. If necessary, GTM assistance can be provided to understand the account receivable information in N06.

The entire claim package and billing letter shall be forwarded to the GTM for review prior to final processing.

E. No Action Needed (NAN)

NAN claims shall be forwarded to the GTM. The NAN claims include:

Duplicate supplemental claims - HUD already paid one supplemental claim for the same item(s) and amount (s) and the Contractor received a duplicate copy of the supplemental.

Supplemental Claims for Remittance - HUD records (Account Receivable Records/N06) shows a receipt of the refund amount credited on the supplemental claim.

Establish monitoring process to ensure that claim data were correctly entered to A43C using DEPCON-available system reports. Prepare (stuff and seal envelopes) the return and denied supplemental claim packages to mortgagee.

Return completed envelopes back to HUD for mailing.

NAN claim counts shall be included in the weekly/monthly reports for reconciliation of inventory. These claims do not count toward the total processed claims for the month, as they do not require review, analysis or processing.

Timeliness Requirements

Supplemental claims shall be processed in the order in which they were received.

A. Each new supplemental claim in a batch shall be reviewed and processed within 10 business days from the initial processing of that batch. Before starting to process claims in another batch, claims from the previous batch shall be finalized first.

B. Each returned corrected supplemental claim received from the lender with requested documents shall be reviewed and processed within 10 business days from the receipt date of the corrected supplemental claim.

C. Claims received from the GTM for correction shall be corrected or revisions of the disposition recommendation coversheet made. The correction should be resubmitted to the GTM within 2 business days of receipt of the GTM’s request.

Supplemental Claims with Errors

A. Claims returned for correction

If the GTM disapproves the recommendation action of the processed claim, the claim will be returned for correction or revision of the disposition recommendations coversheet.

B. Lender Appeals returned for correction

If the lender disagrees with the payment made on supplemental claim or the denial of the supplemental claim, the appeal of supplemental claim will be resubmitted by the lender and returned for correction.

Appropriate corrections to the supplemental claims shall be made and the supplemental claim shall be resubmitted to the GTM with the Return to GTM Batch Coversheet. These claims do not count toward the total processed claims for the month.

Risk-Based Review of Supplemental Claims

A trend analysis will be required to be conducted quarterly to establish a new risk-based review amount that does not put HUD at risk. The GTM will provide the initial risk-based review amount and the start date for the new trend analysis. The calculated risk-based review amount is based on supplemental claim data from the previous quarter that includes the following:

Total number of suspended supplemental claims Total number of paid supplemental claims Average dollar amount of paid supplemental claims

The results of the trend analysis which includes the proposed risk-based review amount and calculation must be provided to the GTM for approval by the 15th of the month following the end of the review quarter. The new risk-based review amount shall be effective the first day of the month after GTM approval.

Supplemental claims that meet the risk-based review must also meet the following criteria:

The Supplemental must be received within 6 months from the final or full settlement date.

In order to avoid duplicate payments, the supplemental claim cannot have been previously paid.

Corrected Supplemental Claims Returned by Lenders

When corrected supplemental claims are returned by the lender they must be re-entered manually in A43C because the claim is deleted when it is returned to the lender. The corrected supplemental claim must be received within 45 days of the return letter and entered into A43C using the following instructions:

1) Go to the J11 screen and enter the FHA case number from Form HUD-27011, Part A, Item 2. Press the Enter key and the case information will auto populate.

The information that is auto populated must be verified to ensure the payments are being made correctly.

2) Enter the original mortgage amount from Form HUD-27011, Part A, Item 15.

3) Enter the received date located on the cover sheet of the Returned Letter in the top right corner. The latest date should be used.

4) Enter the prepared date from Form HUD-27011, Part A, Item 6.

5) Enter the endorsed date from Form HUD-27011, Part A, Item 5.

6) Enter the correct signature code based on the signature(s) provided on the Form

HUD-27011, Part A, Items 37 and 38 as follows:

a. Signature Code 1 – Holder Signature Only (Paper Claim)

b. Signature Code 2 – Servicer Signature (Paper Claim)

c. Signature Code 3 – Holder and Servicer Signature (Paper Claim)

7) Enter “S” to suspend claim and press the Enter key

Note: After the corrected supplemental claim is suspended in A43C, it can be viewed on Function K03 or it can be processed in Function J13.

Lender Inquiries

Lenders may submit requests regarding supplemental claim submissions via email to a designated supplemental claims mailbox. The mailbox shall be checked regularly to ensure timely response to inquiries. All emails received shall be responded to within two business days of receipt. Any emails determined to be extremely complex in nature shall be forwarded to the GTM for further research and response.

SUPPLEMENTAL CLAIMS PROCESSING (OFF-SITE)

After the supplemental claim has been reviewed and the written recommendation has been completed, the claim is processed utilizing the HUD A43C System under one of the following categories:

1. Recommended Action – Paid

At the J13 screen, enter the FHA case number and press the Enter key. Scroll down to the correct case number and type ‘S’ to select and press the Enter key. Verify that the case number on the screen matches the case number on the claim being processed.

Enter the following information from the supplemental claim form:

Date Received Date Prepared Date Endorsed

If the information is already completed, verify that the information matches the information on the supplemental claim form. If the information does not match the information on the supplemental claim form, then enter the dates that appear on the data entry form.

Enter the following information from the data entry form:

Line Number(s) and the corresponding Amount(s) Total(s) and Net Amount HUD Comments in their entirety

NOTE: If the comment is too large, only abbreviate large words.

Complete the Signature block by looking at the signature blocks (Blocks 37 and 38) on the supplemental claim form and select the entry the corresponds:

Signature in Block 37 = enter “1” Signature in Block 38 = enter “2” Signatures in Blocks 37 and 38 = enter “3”

Once all the information is entered press the Enter key. The claim will be Suspended, Pay Authorized or Released depending on the level of access and if there are any error codes present on the claim. In the absence of Pay Authorization rights or if the claim produces errors, enter ‘S’ and press the Enter key to suspend, annotate the claim with the error(s) received and forwarded to the Task Manager.

If the claim is free from errors, enter ‘R’ and press the Enter key to release the claim.

Stamp the paper claim with the PAID stamp and initial and date with the current date.

Once the entire batch is completed, verify that each supplemental claim in the batch has been processed by checking the FHA case number in the J13 screen.

2. Recommended Action – Return to Mortgagee

At the J13 screen, enter the FHA case number and press the Enter key. Scroll down to the correct case number and type ‘S’ to select and press the Enter key. Verify that the case number on the screen matches the case number on the claim being processed.

Enter the HUD COMMENTS only, enter ‘S’ to suspend and press the Enter key.

Re-enter the same FHA case number on the J13 screen, scroll down to the correct case number, type ‘D’ and then press the Enter key. Type the word ‘delete’ and press the Enter key. Stamp the current date on the claim cover letter and sign or initial the claim.

Once the entire batch is completed, verify that each supplemental claim in the batch has been processed and deleted by checking the FHA case number in the J13 screen.

Place the original claim with the original cover letter attached in the Mortgagee-addressed envelope. By the HUD return address on the envelope, stamp ‘Room 6246’. Place all envelopes in the daily courier box.

3. Recommended Action – Billed/Refund Due HUD Claims

These supplemental claims must be sent to the GTM for review and approval prior to processing. These steps are to be followed once the recommendation has been approved by the GTM.

In A43C, go to the N06 Accounts Receivable screen. Enter the FHA case number from the claim form and press the Enter key. Review the information to see if the case was already billed and paid for the amount on the billing letter.

If the case has already been billed and paid, prepare a memo to the GTM stating that this billing has been settled by the mortgagee.

If the billing has not been satisfied, go to the J13 screen, enter the FHA case number and press the Enter key. Scroll down to the correct case number and type ‘S’ to select and press the Enter key. Verify that the case number on the screen matches the case number on the claim being processed.

Enter the HUD COMMENTS only, enter ‘S’ to suspend and press the Enter key.

Re-enter the same FHA case number on the J13 screen, scroll down to the correct case number, type ‘D’ and then press the Enter key. Type the word ‘delete’ and press the Enter key. Stamp the current date on the claim cover letter and sign or initial the claim.

Once the entire batch is completed, verify that each supplemental claim in the batch has been processed and deleted by checking the FHA case number in the J13 screen.

Separate Parts A and B and the original billing letter from the claim package and make a hard copy. Sign the original billing letter and the copy.

Staple together the original Parts A and B, the signed copy of the billing cover letter, and the original claim. Place this in the courier box with a cover sheet labeled “Refund Due HUD –To (insert GTM name)” with the billing letter attached. Staple the signed original billing cover letter to the hard copies of Parts A and B and place in the Mortgagee-addressed envelope. By the HUD return address on the envelope, stamp ‘Room 6246’. Place all envelopes in the daily courier box.

4. Recommended Action – Denied Claims

These supplemental claims must be sent to the GTM for review and approval prior to processing. These steps are to be followed once the recommendation has been approved by the GTM.

At the J13 screen, enter the FHA case number and press the Enter key. Scroll down to the correct case number and type ‘S’ to select and press the Enter key. Verify that the case number on the screen matches the case number on the claim being processed.

Enter the HUD COMMENTS only, enter ‘S’ to suspend and press the Enter key.

Re-enter the same FHA case number on the J13 screen, scroll down to the correct case number, type ‘D’ and then press the Enter key. Type the word ‘delete’ and press the Enter key. Stamp the current date on the claim cover letter and place your signature and name sticker on the claim as the reviewer.

Once the entire batch is completed, verify that each supplemental claim in the batch has been processed and deleted by checking the FHA case number in the J13 screen.

Separate Parts A and B and the original denial letter from the claim package and make a hard copy. Sign the original denial cover letter and the copy.

Staple the signed original denial cover letter to the hard copies of Parts A and B of the claim and place in the Mortgagee-addressed envelope. By the HUD return address on the envelope, stamp ‘Room 6246’. Place all envelopes in the daily courier box.

Staple together the original Parts A and B, the signed copy of the denial cover letter, and the original claim. Write ‘DENIED’ on the cover letter and send the package for filing.

5. Recommended Action – No Action Needed (NAN) Claims

At the J13 screen, enter the FHA case number and press the Enter key. Scroll down to the correct case number and type ‘S’ to select and press the Enter key. Verify that the case number on the screen matches the case number on the claim being processed.

Enter the HUD COMMENTS only, enter ‘S’ to suspend and press the Enter key.

Re-enter the same FHA case number on the J13 screen, scroll down to the correct case number, type ‘D’ and then press the Enter key. Type the word ‘delete’ and press the Enter key. Stamp the current date on the claim cover letter.

Once the entire batch is completed, verify that each supplemental claim in the batch has been processed and deleted by checking the FHA case number in the J13 screen.

Attach a cover sheet labeled ‘NAN’ to the claim package and send for filing.

NOTE: All supplemental claims ready for processing are located on the J13 screen.

If the case number from the supplemental claim does not appear on the J13 screen, attach a memo to the attention of the GTM and forward the claim package to the GTM for review. The GTM will advise when the claim is cleared to be re-entered on the J13 screen for processing. This should be adhered to for Paid, Returned and Denied claims. If a Billed or NAN claim is not on the J13 screen, the Task Manager should be notified.

Supplemental Claim Memos Below is a chart containing the error codes or situations where supplemental claims need to be returned to the GTM:

Error Code Description

CA Indemnity Agreement is active for this case

CB Non-Payment Order is active for this case

2nd Supplemental Payment Claim is marked on claims detail screen as second supplemental payment

If these errors arise, draft a memo to the GTM, attach the memo to the claim and place it in the daily courier box.

DOCUMENT CONTROL, DISTRIBUTION AND DELIVERY (ON-SITE)

The following tasks are handled on-site at the HUD Headquarters building located at 451 7th Street SW, Washington, DC 20410.

DAILY TASKS

The daily tasks to be completed are listed and prioritized below:

AX2 and HERMIT Cash Management Disbursements Daily (GHASC) Reports Box Paid Claims Mail Room/Branch Mail Distribution File Transfer/Maintenance Manual Payments Other Duties (as assigned)

Note: The on-site employee must have a C-Number issued and have access to a computer.

1. AX2 and HERMIT Cash Management Disbursements

AX2 Report

The AX2 Report is obtained by using the DEPCON system. The budget check notification arrives via email. The AX2 schedule is a time-sensitive task that must be completed before 11:00 a.m. Therefore, it is imperative that the GTM be consulted if reports are not received by 10:00 a.m.

Retrieve and complete an Automated Transmittal Form. The information needed to complete the form is located on the AX2 Report and should be transferred to the form as follows:

AX2 Report Automated Transmittal Form Schedule # Group ID Control # Reel # Amount(dollar amount always changes) Schedule Total Items Item Count

The following fields are already completed on the Automated Transmittal Form:

Funds Program Appropriation (86x4587) Default (Y) Acct Type/Area Active Type is always 10c – single family claims (SFCL)

Sign the form next to Prepared By and write the current date. The form, along with the budget check, should be given to an appropriate HUD staff member for signature. Once returned the AX2 Report, Automated Transmittal Form and the budget check should be sent to the Cash Management Branch (CMB) via email. A copy of all schedules sent to CMB must be maintained.

HERMIT Schedule

Background and Purpose: The CMB process requires that a paper disbursement transmittal form be completed by the Financial Operations and Control Section (FOCS) for all approved daily claims disbursements. All of the approved claims are sent to the Accounting Module (AM) from the Servicing Module (SM) at the end of the day (currently at 5:00 p.m. EST).

Along with the completed transmittal document, the claims extract from HERMIT – SM must be provided to CMB for payment processing. This document provides the instructions to generate the report from SM.

1. Login to HERMIT system and navigate to Accounting > Claims screen. Once at the screen enter the search criteria as shown below and click Search:

Claims Status = Submit for Payment Trans Date: Two business days prior to current date. For example: If today is 11/21 then enter the dates as 11/19 and 11/20. Please note to include weekends or Federal Holidays.

2. The search results will display the records that match the search criteria. Select the Export to Excel link on the screen. Save the excel copy on the desktop with “Hermit Payment as xxxxxx” (replace xxxxx with the date). Please note to save the file as excel. After the file is saved, open the file.

3. Select the top row in the Excel spreadsheet which contains the headers for each column.

4. Select the filter option from the menu bar.

5. Scroll to the right and view the drop down for the Changed Date column.

6. Uncheck “Select All” and check the box with prior business day. For example: If today is 11/21 then check the 11/20 date.

7. Select OK. The search results will now filter to show any claims that have been approved after previous day’s batch cut off time (after 5:00 p.m. EST on 11/19) to the current batch cut off time (5:00 p.m. EST on 11/20).

8. Auto sum the Claim Amount column and save the file. The extract is ready to be sent to the CMB point of contact for this task.

Cash Control Accounting Report (CCARS)

CMB will return the Automated Transmittal Form with the addition of a cover sheet that has been created. Verify that the schedule number and the amounts on CMB’s new cover sheet matches the copy of the Automated Transmittal Form. After verification place the new cover sheet and the Automated Transmittal Form in the white binder marked “AX2 Report”.

2. Daily (GHASC) Reports

The reports have to be printed from the DEPCON system daily. There are two reports that need to be printed and placed in the paid claims box. The report names are Disbursement Report and Supplemental Disbursement report.

Reports for CCSO need to be printed from DEPCON and placed in the courier box.

3. Box PAID Claims

The Review and Compliance Section (RCS) paid claims must be picked up from that office daily.

All paid claims are set up and located on the front table of the FOCS office. All boxes are dated and numbered with current and previous dates to be picked up.

In setting up boxes, make sure that the A43BLC1A and a43BLC5A reports are with the completed boxes along with the PAID CLAIMS, NAN(s) or REFILES (if any) for that date. Reports must match the date in the completed box of claims.

The logbook for the boxes of paid claims must be maintained. Record the boxes in the logbook when ready for pick-up. When the contractor takes the boxes, make sure to get a signature or initials in the logbook as certification that the boxes have been taken.

4. Mail Room/Branch Mail Distribution

Mail is to be picked-up and/or dropped off in the mailroom daily. Mail usually arrives around 9:00 a.m.

Sealed envelopes for mailing will be brought to the onsite contractor daily to take to the mailroom and place in the outgoing mail cart.

Pick up all mail from the upper bin marked “Single Family Claims”.

Deliver all mail to the designated areas. Unless addressed to a particular recipient, legal documents should be delivered to Room 6242. Mail for the Single Family Claims Branch Chief and Review and Compliance Section Chief should be placed in the brown tray labeled “Incoming” in Room 6248. If there are any problems, consult the designated HUD employee.

Express Mail (UPS, FedEx, etc.) is brought in by the appropriate carrier and placed on a table in FOCS.

PAID claims, NANs and Refiles are to be picked up from RCS and placed in the boxed paid claims for filing.

5. File Transfer/Maintenance

Manual payment records and daily disbursements must be held and maintained for one year at HUD Headquarters. Upon request, previous manual vouchers shall be retrieved to copy and/or review. After one year, files ready for transfer to the Federal Records Center shall be prepared in boxes provided by HUD and according to Federal archiving requirements. When preparing files for transfer:

A list of manual claim payments and daily disbursements transferred to Federal Records Center must be maintained in Excel and shall be provided to the GTM.

The transfer shall occur twice a year, with a date agreed upon and approved by the GTM. The GTM shall be notified when files are ready for transport.

6. Manual Payments

Manual payments are received from RCS staff, who must sign them into a logbook. All manual payments received shall include the following:

SF-1034 Voucher Form, signed by the Preparer and Authorized Certifying Officer SFC Disbursement Form, signed by Approving Official All supporting documentation

All payments must be verified by a Certifier. Once verified, the Certifier will provide the payments to be keyed into the Disbursement Master File. After completion, give all payments to an authorized HUD employee for verification and signature.

Once verified, the HUD employee will sign the SFC Disbursement Form and return the entire package. Once this is accomplished, the Budget Check Notification Report must be completed via the PeopleSoft system. The completed form must be emailed to CMB.

PeopleSoft

Below are the procedures to complete the Budget Check Notification Report. The procedures must be followed in order.

A. Establish Control Group

Once in PeopleSoft, go to Accounts Payable>Control Groups>Group Information. Click on the “Add a New Value” tab. In the Business Unit block enter “CCFC3” for manual payments. In the Control Group ID box enter the Treasury Schedule Number assigned followed by the two-digit year (“-YY”). Once this is done click Add.

Enter the total amount in the Gross Amount block. In the Nbr of Vouchers block enter “1” (this will always be the value). In the Status dropdown box, change the status to Assigned. In the Assigned to box, enter/select your HUD ID number. Click on the Save button. More groups can be created by clicking on Add, if necessary.

B. Enter Vouchers

To enter vouchers, go to Accounts Payable>Vouchers>Entry>Regular Entry. Click on the “Add a New Value” tab and do the following:

Select your Control Group ID Select Default Vendor (there is only one) Enter the Invoice Number Enter the Invoice Date Enter the Invoice Amount

Once complete, click on the Add button. The Invoice Information Page will appear. Use the vertical and horizontal scroll bars to access Invoice Lines at the bottom of the page.

At the ChartFields tab, enter the following information:

Merchandise Amt Quantity Acct Number Accounting Area Fund Program Budget Year Activity Type Vendor Category Entry Event

After all information has been entered, click on the “+” button to add any additional entries. A second line will open up. Enter the next set of ChartFields values. Ensure that all amounts entered are correct. When all entries have been made, click the Save button.

Scroll back to the top of the page to go to the Action box. Click on the Action box and select Budget Check. Click on the Run button and a green line will appear. Continue to click on the Run button until the green line disappears. This means that the entry is balanced and there are no errors.

C. Run Budget Check Notification Report

Go to Main Menu>Cash Contract Funds Control>Reports>Budget Check Notification.

From the Find an Existing Value tab, click the Search button.

Insert the current date in the From Date and To Date boxes and the Control Group ID in the Group ID From and Group ID To boxes. Click Process Monitor to access the Process List. Once completed, make the following selections:

Select PSNT from the Server Name drop down box.

Select Web from the Type drop down box.

Select PDF from the Format drop down box.

Once all selections have been made, click OK. The Review Page will reappear with a Processing Instance.

Click the Refresh button to update the Run Status. When the Run Status changes to Success, click on Details to access the Report.

Click on View Log/Trace to access the Report. View Log/Trace screen appears for review or click the link to view Message Log or PDF.

Verification of Payment

After CMB issues the manual payments, a confirmation of all payment information entered will be returned to verify that all payments were sent correctly and to the appropriate institution requested. The following information needs to be verified on the Single Family Claims Disbursements Sheet as follows:

1. Schedule number

2. Account Type (usually always “C” for checking)

3. Payee Name

4. Payee TIN

5. Appropriation

6. Amount

7. Routing Number

8. Account Number

9. Case Number

After all information is verified, if there is a discrepancy a copy is made and given to the appropriate FOCS employee. If there are no discrepancies the paperwork is filed.

After processing AX2, HERMIT and manual claims that are paid outside of A43C:

E-mail a detailed list of paid HECM claims to designated entities.

Monitor and maintain paid claim source documents for filing for the Branch.

Distribute copies of the claim package and payment voucher to holders and the RCS.

As instructed by the GTM, use Microsoft Excel or HUD-provided automated system to perform these duties. This task must be performed on-site.

7. Other Duties

Assistance with writing requirements for development of and taking an active part in development and testing of processes for the automated system will be required.

A Weekly Status Report containing a summary of all tasks performed for the prior week, and Monthly Status Report containing a summary of all tasks performed for the reporting month shall be provided to the off-site Contractor for inclusion in the Comprehensive Weekly and Monthly Reports.

FILE MAINTENANCE OF SUPPORTING DOCUMENTS FOR PAID CLAIMS (OFF-

SITE)

Pick up the supporting documents for paid claims when available from the designated rooms at HUD and transport the documents daily.

Correctly match A43C paid claim source documents to the payment schedules (A43BLC1A Report/1166 Disbursement Report provided by HUD for other claim types and the A43LC5% Report for supplemental claim) and store the claim files in numerical order according to schedule number, paid date, and FHA case number.

In instances when the case number or the claim file is missing:

a) Notify the GTM within 24 hours in writing via email if an FHA case number is listed on the A43LC5% but the supplemental claim package is missing.

b) Notify the GTM within 24 hours in writing via email if the contractor receives a claim package with a specified date but the case number does not appear on the A43BLC1A Report/1166 for that date.

c) Return the claim files that are not included on the A43BLC1A Report/1166 Disbursement Report or the A43LC5% report to HUD within 24 hours.

Correctly match paid HECM claim source documents to the payment schedules (HUD will provide a HECM Monthly Report of paid claims for reconciliation) and store the files by numerical order according to paid date and HECM case number.

In instances when the case number or the claim file is missing:

a) the contractor must to notify the GTM within 24 hours in writing if an FHA case number is listed on the HECM Monthly Report of Paid Claims but the supplemental claim package is missing.

b) Return the claim files that are not included in the HECM Monthly Report of paid claims to the GTM within 24 hours.

Maintain original source documents by paid date and FHA case number order for the previous fiscal year and the current fiscal year to date.

Retrieve and deliver a copy of paid claims within 24 hours upon GTM request.

Prepare files for transfer to the Federal Records Center in boxes provided by HUD and according to Federal archiving requirements. When preparing files for transfer, the Contractor shall:

(1) Contact the GTM to pick up the boxes from HUD in preparation for file transfer. HUD will provide archive instructions and transfer the boxes to the Federal Records Center.

(2) Prepare all paperwork and box-by-box inventory listing, including labels, inventory and accession numbering. Specific instructions will be provided during training by HUD staff.

(3) Maintain a list of claims transferred to Federal Records Center in Excel format that identifies accession number, box number, schedule number, schedule date, first and last FHA Case Number in each box for each fiscal year. Also, within each box, include a list of all cases that are enclosed in each box. Provide lists to the GTM concurrent with deliveries to the Federal Records Center.

Storage to hold, at a minimum, 5,000 standard government storage box files in a clean, dry, locked storage facility must be maintained.

BUSINESS PROCESS IMPROVEMENT (OFF-SITE)

HUD will transition to a paperless risk-based process for supplemental claims, which will improve processes, manage operations and avoid backlogs. The process will provide adequate security to sensitive information by using a secure network or program that prevents paper claims from being submitted. Below is the general process for the receipt, review and processing of supplemental claims under the Business Process Improvement.

1. Servicers would submit a supplemental claim to HUD’s supplemental claim payment system (electronic filing records system), which would interface with A43C.

2. After the servicer files the claim, the system would record a received date electronically and would serve as an accountability tool as these dates cannot be altered and eliminates any speculation involving received date.

3. After the claim is submitted and has passed through A43C with no administrative errors and meets predetermined tolerant levels, the claim would auto pay in A43C. This would require the electronic filing system to interface with A43C as well as input the claimed amount. Once the claim is paid, servicers can retrieve the Advice of Payment from FHA Connection. This process would use the initial/final forward claim model of auto paying up to 80% of incoming claims.

4. A43C would have predetermined tolerant levels based off a risk analysis to auto pay claims. If a claim exceeds the tolerant level or has an administrative error the claim documents would have to be uploaded into the electronic filing system including all the required documentation. The claims would be routed and batched for review. If the claim is determined payable the Contractor would approve the claim and it would be received by HUD’s GTM who would conduct a random review/audit and then release the payments in A43C.

5. If it is determined that there is not sufficient supporting documentation to support the supplemental claim, the claim should be routed back to the servicer for additional action.

6. If a claim is denied, the denial letter should be sent through the electronic filing system notifying the servicer the claim was denied and the reason why. The supplemental claim must be deleted from A43C once the letter is sent.

7. If it is determined that the servicer should be billed, the billing letter should be prepared and sent to the servicer through the electronic filing system. The supplemental claim must be deleted from A43C once the letter is sent.

8. The records in the electronic records filing system shall be stored securely.