Child Support Enforcement:

Better Data and More Information on Undistributed Collections Are Needed

GAO-04-377: Published: Mar 19, 2004. Publicly Released: Apr 15, 2004.

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Congress established the child support enforcement program in 1975 to ensure that parents financially supported their children. State agencies administer the program and the Office of Child Support Enforcement (OCSE) in the Department of Health and Human Services oversees it. In 2002, state agencies collected over $20 billion in child support, but $657 million in collections from 2002 and previous years were undistributed--funds that were delayed or never reached families. One method used to collect child support, intercepting federal tax refunds, involves all state agencies, OCSE, and two Department of the Treasury agencies--the Internal Revenue Service (IRS) and the Financial Management Service (FMS). GAO was asked to address (1) how the total amount of undistributed collections changed over the years, (2) the causes of undistributed collections, (3) states' efforts to reduce these funds, and (4) OCSE's efforts to assist states. GAO analyzed OCSE data, administered a survey, visited 6 state agencies and interviewed officials.

OCSE reported that the amount of undistributed collections for fiscal year 1999 was $545 million and $657 million for fiscal year 2002; however, these amounts may not be accurate. State agencies had different interpretations of what comprised undistributed collections and data reported by several state agencies were found to be unreliable throughout this time period. OCSE revised the reporting form, but data accuracy concerns remain, in part, because OCSE does not have a process to ensure the accuracy of undistributed collections data. Federal law, some state policies, and inaccurate or missing information were the underlying causes of nearly all types of undistributed collections. State agencies determined how long they held collections from joint tax refunds and if they held collections received before they were due. Federal law allows collections intercepted from joint tax refunds to be held for up to 180 days and in response to GAO's survey, 34 state agencies reported holding them for 180 days. Missing or inaccurate information, such as invalid addresses, also leads to undistributed collections. Based on state agencies' survey responses, GAO determined the median value of the undistributed collections from joint tax refunds was about $1.8 million and the median value of four other types of undistributed collections exceeded $350,000. State agencies GAO visited took steps to better understand and reduce undistributed collections. Of the 6 state agencies visited, 5 had analyzed their undistributed collections cases, 4 adopted performance goals, and officials from all 6 state agencies stressed the importance of researching collections that were missing information. In addition, officials stated that using automated processes to receive and distribute collections helped reduce the number of collections with missing or inaccurate information. OCSE has provided some assistance to help state agencies reduce their undistributed collections. However, the Department of the Treasury has not provided OCSE information that would allow state agencies to distribute collections from joint tax refunds to families sooner. Further, OCSE's efforts to obtain this information have been minimal.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To better measure the amount of and help reduce undistributed collections, the Secretary of Health and Human Services should direct the Commissioner of OCSE to review undistributed collections data from state agencies periodically in conjunction with one of the other routine reviews to help improve the accuracy of the data.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: To establish a routine monitoring function, the Office of Child Support Enforcement (OCSE) convened a workgroup composed of regional and central office staff to develop a methodology for reviewing state data on undistributed child support collections. The first conference call meeting took place on May 11, 2004. According to HHS officials, methods to review the accuracy of the data must be based on associated data reporting requirements. In September 2004, the itemized Undistributed Collections (UDC) form known as the UDC Supplement to the 34-A was approved by OMB. This form provides a breakdown of UDC into sub-categories based on the reason for that line-item being undistributed. The new form, developed in partnership with the States, will greatly assist in identifying the "reason" the funds are not distributed. OCSE also developed a uniform procedure for regional offices and central office to review State UDC data on a quarterly basis. Each State's data will be examined for any illogical fluctuations and monitored by the regional office. If the data reported raises concerns, the regional office will follow-up with the State for further clarification. In situations where a State can benefit from technical assistance, the regional office along with central office will develop a plan to assist the State to develop actions and activities to reduce undistributed collections. The quarterly monitoring for UDC began for data reported July 2005. The "Accumulate Year-End Undistributed Collections as a Percentage of Total Annual Collections" measure was added to the 2005 to 2009 Child Support Strategic Plan as a measurement under Goal 4, that is, all children in IV-D cases received financial support from parents as ordered.

    Recommendation: To better measure the amount of and help reduce undistributed collections, the Secretary of Health and Human Services should direct the Commissioner of OCSE to work closely with the Department of the Treasury to identify a costeffective approach for obtaining information on "injured spouse" claims in order to enable collections from some joint tax refunds to reach families sooner.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: The Office of Child Support Enforcement (OCSE) met with the Department of the Treasury several times and concluded that Financial Management Services (FMS), an agency within Treasury, will provide the additional information directly to OCSE. The two agencies discussed exactly what requirements and elements are needed and how to best transmit the information. This included a discussion to develop a methodology for providing the needed information that will involve identifying requirements for programming adjustments, testing, and migrating the enhancements into the Treasury Offset Program (TOP) production system. Treasury anticipated the implementation to be underway in early 2005. As of 2008, Treasury made the adjustments and migrated the changes to its TOP production system to identify whether an injured spouse claim was satisfied.

    Recommendation: The Secretary of the Treasury should direct the Commissioner of IRS and the Commissioner of FMS to work together with OCSE to identify a cost-effective approach for providing OCSE information needed to identify those collections that have had their "injured spouse" claims satisfied so that these collections can be distributed to families sooner.

    Agency Affected: Department of the Treasury

    Status: Closed - Implemented

    Comments: The Department of the Treasury's Financial Management Services (FMS) and the Internal Revenue Service have had discussions with the Office of Child Support Enforcement (OCSE) to develop a methodology for providing the needed information. This methodology will involve identifying requirements for programming adjustments, testing, and migrating the enhancements into the Treasury Offset Program (TOP) production system. Treasury anticipated the implementation to be underway in early 2005. In 2008, Treasury reported that its Debt Management Service (DMS) had worked with the IRS, states, and OCSE to identify a cost-effective approach to identify satisfied injured spouse claims. They identified the adjustment needed, tested it, then migrated the change to the TOP system to identify whether an injured spouse claim was satisfied.

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