Child Support Enforcement: Families Could Benefit From Stronger

Enforcement Program (Chapter Report, 12/27/94, GAO/HEHS-95-24).



Greater federal leadership coupled with equally intensive state efforts

could help the national child support enforcement program to better

serve the families that depend on it. The dramatically rising number of

children needing support--the child support enforcement caseload soared

180 percent between 1980 and 1992--has focused attention on federal and

state efforts to force parents to support their children. However, these

efforts have been stymied by management weaknesses that keep the Office

of Child Support Enforcement (OSCE) from (1) effectively leading the

program and the states, (2) judging how well the program is working, and

(3) setting effective policies. Although the federal role is

substantial--most program funding is federal--child support enforcement

is very much a state activity. Today, states face common problems, such

as increasing workloads that outpace resources, inadequate computer

systems, and fragmented authority and unstandardized procedures among

others. In response, states have developed a number of strategies,

including augmenting their staffs with volunteers and contracting with

private collection agencies, improving automation, and using innovative

enforcement techniques. Many welfare reform proposals would further

expand child support enforcement. Unless OSCE strengthens its management

of its current program, it may have difficulty implementing any new

responsibilities.



--------------------------- Indexing Terms -----------------------------



 REPORTNUM: HEHS-95-24

 TITLE: Child Support Enforcement: Families Could Benefit From

 Stronger Enforcement Program

 DATE: 12/27/94

 SUBJECT: Welfare benefits

 Aid to families with dependent children

 Public assistance programs

 Child support payments

 State-administered programs

 Federal/state relations

 Law enforcement

 Collection procedures

 Agency missions

 Strategic planning

IDENTIFIER: HHS Child Support Enforcement Program

 AFDC

 OCSE Measuring Excellence Through Statistics Program

 California

 Delaware

 Arizona

 Iowa

 Kentucky

 Massachusetts

 New York

 Oregon

 Texas

 Virginia



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Cover

================================================================ COVER



Report to the Chairman, Subcommittee on Federal Services, Post Office

and Civil Service, Committee on Governmental Affairs, U.S. Senate



December 1994



CHILD SUPPORT ENFORCEMENT -

FAMILIES COULD BENEFIT FROM

STRONGER ENFORCEMENT PROGRAM



GAO/HEHS-95-24



Child Support Enforcement



Abbreviations

=============================================================== ABBREV



 ACF - Administration for Children and Families

 AFDC - Aid to Families With Dependent Children

 CSE - child support enforcement

 GPRA - Government Performance and Results Act of 1993

 HHS - Department of Health and Human Services

 METS - Measuring Excellence Through Statistics

 OCSE - Office of Child Support Enforcement

 OBRA'93 - Omnibus Budget Reconciliation Act of 1993



Letter

=============================================================== LETTER



B-250916



December 27, 1994



The Honorable David Pryor

Chairman, Subcommittee on Federal Services,

 Post Office and Civil Service

Committee on Governmental Affairs

United States Senate



Dear Mr. Chairman:



This report, prepared at your request, examines the national child

support enforcement (CSE) program at both the federal and state

levels. It discusses federal program management issues and what some

state CSE programs are doing to overcome barriers hampering their

child support enforcement efforts. The report makes recommendations

to the Secretary of Health and Human Services to improve CSE (1)

planning, (2) performance measurement, (3) federal accountability,

(4) audits, and (5) program funding structure.



As arranged with your office, unless you publicly announce the

contents of this report earlier, we plan no further distribution

until 30 days from its issue date. At that time, we will send copies

of the report to the Secretary of Health and Human Services; the

chairmen and ranking minority members of the House Subcommittee on

Human Resources, Committee on Ways and Means and the Senate Committee

on Finance; and other interested parties. We also will make copies

available to others upon request.



This report was prepared under the direction of Jane L. Ross,

Director, Income Security Issues. Please contact David P. Bixler,

Assistant Director, at (202) 512-7201 if you have any questions.

Other GAO contacts and major contributors to this report are listed

in appendix VI.



Sincerely yours,



Janet L. Shikles

Assistant Comptroller General



EXECUTIVE SUMMARY

============================================================ Chapter 0



 PURPOSE

---------------------------------------------------------- Chapter 0:1



Nonpayment of child support contributes to childhood poverty as well

as to increases in the number of families receiving welfare.\1 Today,

more than one-fifth of America's children live in poverty, and it has

been estimated that half will live in single-parent families at some

point in their lives.



To help obtain the financial support noncustodial parents owe their

children and to help single-parent families achieve or maintain

economic self-sufficiency, the Congress established the

intergovernmental child support enforcement program in 1975. In

1992, the federal Office of Child Support Enforcement (OCSE) reported

a nationwide caseload of about 15.2 million cases, about 60 percent

of which received welfare.



The Chairman of the Subcommittee on Federal Services, Post Office and

Civil Service, Senate Committee on Governmental Affairs, asked GAO to

review the child support enforcement program to determine how the

federal government could improve services to the states and to the

families that depend on the program. GAO's review focused on (1)

whether the program has essential management tools in place at the

federal level to fulfill its mission, (2) how well OCSE has fulfilled

its role in fostering the development of state child support

enforcement programs, and (3) what the state programs are doing to

overcome barriers hampering their efforts. GAO also examined the

implications of welfare reform proposals and the impact of the

Government Performance and Results Act of 1993 (GPRA).



--------------------

\1 In this report, "welfare" refers to cash assistance provided to

families under the Aid to Families With Dependent Children (AFDC)

program.



 BACKGROUND

---------------------------------------------------------- Chapter 0:2



The federal government and the states share child support enforcement

responsibilities. OCSE, within the Department of Health and Human

Services (HHS), is responsible for providing leadership, technical

assistance, and standards to develop effective state programs, which

actually deliver child support enforcement services to families.

Services include establishing paternity and support orders; locating

noncustodial parents; updating support orders to be current with a

noncustodial parent's income; obtaining medical support, such as

medical insurance, from noncustodial parents; and collecting support

payments. To help ensure state program effectiveness, the federal

government uses a "carrot and stick" approach involving incentive

payments, audits, and penalties. The federal government matches

about two-thirds of state program administrative costs and makes

incentive payments to states based on collections.



Federal and state governments first became involved in child support

enforcement activities with the aim of recovering government welfare

costs. Child support owed by noncustodial parents of families

receiving welfare was to be collected by state and local child

support programs and then returned to the government, with a small

portion going to the families. As the number of families receiving

welfare rose in the 1970s, the Congress incorporated existing state

and local efforts into the national child support enforcement

program.



Over time, the program expanded beyond the original aim of recovering

welfare because the Congress believed that early enforcement of child

support obligations could help prevent families' need for government

support. For example, families that are not receiving welfare but

that request program services must be served equally.



 RESULTS IN BRIEF

---------------------------------------------------------- Chapter 0:3



Greater federal leadership coupled with equally intensive state

efforts could better position the national child support enforcement

program to serve the families that depend on it. Dramatically

increasing numbers of children needing support--the child support

enforcement caseload grew 180 percent between 1980 and 1992--are

focusing attention on federal and state efforts to enforce parents'

responsibilities to support their children. However, these efforts

have been hampered by management weaknesses that keep OCSE from (1)

effectively leading the program and the states, (2) judging how well

the program is working, and (3) setting effective policies.



Because of declining resources, OCSE has diminished the level of

technical assistance provided to state programs. Also, various

organization and staffing changes have created communication problems

between federal and state program officials. OCSE audits and data

collection efforts, while satisfying legal requirements for

monitoring and tracking the states' programs, do not provide either

OCSE or the states with adequate information on program results.

Now, under the impetus of GPRA, OCSE is getting started on management

improvements that could position it to better serve states and

families. OCSE has also proposed changing the incentive payment

structure to encourage improved state performance.



While the federal role is substantial--most program funding is

federal--child support enforcement is very much a state activity.

Today, states face common barriers such as increasing workloads that

outpace resources, inadequate computer systems, and fragmented

authority and unstandardized procedures among others. In response,

states have developed a number of strategies, including augmenting

their staffs with volunteers and contracting with private collection

agencies, improving automation to help staff be more productive, and

using innovative enforcement techniques. Some of the techniques

various states have adopted are (1) requiring employers to report

newly hired employees so parents who owe child support can be

located, (2) using central lien indexes and tax record matching so

parents' assets can be located, and (3) revoking driver's and

professional licenses to encourage parents to pay what they owe.



Many welfare reform proposals would further expand child support

enforcement. Unless OCSE takes steps to strengthen its leadership

and management of its current program, it may have difficulty

implementing any new responsibilities.



 PRINCIPAL FINDINGS

---------------------------------------------------------- Chapter 0:4



 THE CHILD SUPPORT

 ENFORCEMENT PROGRAM HAS

 LACKED ESSENTIAL MANAGEMENT

 TOOLS

-------------------------------------------------------- Chapter 0:4.1



The child support enforcement program has lacked certain essential

management tools to assess and improve current program performance.

A well-articulated mission, programwide planning and goal-setting,

and accurate data on program performance have not been available to

guide program management.



As the program expanded beyond welfare recovery, its mission became

increasingly less clear. Legislative amendments expanded program

efforts to include families not receiving welfare and activities,

such as medical support enforcement, that do not focus directly on

collections. In practice, this expanded mission has given the

program competing priorities--without guidance from the federal level

on how to manage those priorities.



In the face of the program's expanded mission, OCSE's planning

efforts focused on the agency and its processes, not on outcomes for

either the national program as a whole or its own operations. Nor

did these efforts seek input from key stakeholders, such as the

Congress and the states. Only one national goal exists for the

program, and this is a congressionally mandated standard for state

performance in paternity establishment. Now, in response to GPRA

requirements, OCSE is beginning a planning discipline that identifies

priorities and outcomes.



The child support enforcement program has also lacked accurate and

consistent data that could be used to set goals for, assess, and

improve program performance. Despite 20 years of required

performance reporting, OCSE has not developed universally understood

data definitions, and states collect data in ways that make

aggregation and comparison impractical. OCSE and state officials

acknowledge that needed data are not available, and OCSE has taken

some actions on this issue. However, as of December 1994, OCSE was

not in a position to know how the national program was actually

performing.



In concept, federal incentive payments reward state programs

according to performance, but this funding mechanism has yet to

achieve its potential. In practice, all states--regardless of

performance--have received some incentive payments. Moreover, the

amount of incentive payments depends on a state's collections and

does not reflect other important activities, such as paternity

establishment and medical support enforcement. The impact of the

incentives is limited because states are not required to use

incentive funds to expand their child support enforcement activities.

Some states have used incentive payments for activities other than

child support enforcement; others have used federal payments to

offset the state part of matching funds for child support

enforcement, according to a 1991 report by HHS' Office of the

Inspector General.



 OCSE HAS NOT EFFECTIVELY

 FOSTERED STATE PROGRAM

 DEVELOPMENT

-------------------------------------------------------- Chapter 0:4.2



As the Congress originally envisioned it, OCSE's role included

fostering state program development by providing technical assistance

and training, developing standards, and exercising federal oversight

through audits. As HHS experienced workforce reductions in the

1980s, however, OCSE resources diminished. Technical assistance and

training, which had formed a large part of OCSE efforts, virtually

disappeared. In several instances, regulations were finalized after

the effective dates of a law. In addition, an HHS-wide

reorganization left OCSE with no organizational control over those

HHS regional staff serving as contact points for the states on some

program matters. State program staff had to contact various offices

within HHS for different child support enforcement matters, and

miscommunications between OCSE, HHS regional staff, and state program

staff contributed to strained working relationships.



By the early 1990s, OCSE's monitoring role had come into greater

prominence, with more than half of remaining OCSE staff devoted to

compliance audits. These audits focused on state compliance with

federal requirements for administrative procedures and service

delivery rather than on outcomes of state actions, such as how many

paternities or support orders were established. State program staff

said that while some audits had helped them gain state legislative

support, the audits concentrated too much on administrative details

and were too untimely to be a useful management tool for them, with

audit reports sometimes issued 2 years after the period audited.



OCSE recognizes that while the audits have spurred state actions, the

audit approach needs to be changed to provide better insight into

state program performance. OCSE is seeking to shift the emphasis

from compliance with administrative procedures to ensuring state data

integrity. OCSE, however, believes that this shift will require a

legislative change.



 STATE CHILD SUPPORT

 ENFORCEMENT PROGRAMS FACE

 COMMON BARRIERS, USE

 MULTIPLE STRATEGIES

-------------------------------------------------------- Chapter 0:4.3



Although states have received substantial federal funding for program

development, at least five common barriers hinder state child support

enforcement efforts:



Workload continues to grow and become more time-consuming. Estimates

of worker caseload ranged from 300 to 2,500 cases per worker, and

officials believe that many cases now take more time than before.

For example, the growing number of out-of-wedlock births means that

more cases need paternity establishment--more than 40 percent of the

caseload in one state.



Child support enforcement program functions are only partially

computerized. Some states do not have statewide computer systems.

Other states have computerized some functions but others remain

manual. One state had the computer capacity to seize noncustodial

parents' bank assets but did not have caseload intake and parent

location functions computerized. Another state had extensive case

tracking capability but lacked the technology to identify assets and

levy administrative liens through automation.



State program staff lack control over local units. Some states

wanted more uniform state implementation and were frustrated by

dispersed program control. One state's audits documented that some

local districts failed to implement state regulations for case

processing. In another state, some judges did not follow state

procedures.



State legislatures do not always support state programs' proposed

initiatives. Some states have been more successful than others in

getting legislative support for new enforcement techniques, such as

in-hospital paternity establishment; revocation of driver's and

professional licenses of noncustodial parents who are delinquent in

support payments; and using administrative, rather than judicial,

processes for establishing support orders.



Referrals from welfare offices lacked information that the child

support enforcement program needed to do its work. GAO found in

earlier work that poor coordination between welfare and child support

agencies resulted in inadequate information about noncustodial

parents, including identity, location, and earnings data.\2 The

experiences of the state programs that GAO reviewed suggest that very

little has changed.



States that GAO reviewed were at different points in developing or

adopting strategies to deal with the barriers they faced. The

strategies included adding staff; refining AFDC intake procedures to

facilitate child support enforcement; contracting out some functions

to private entities; and using volunteers. States also used various

techniques to garner legislative support and were making increased

use of automation.



The actions some states have taken also show that many decisions

about adding resources, improving automation, and expanding the

program's administrative processes lie within the control of state

leadership and reflect the investments states can make in the program

without the impetus of a federal mandate.



--------------------

\2 Child Support: Need to Improve Efforts to Identify Fathers and

Obtain Support Orders (GAO/HRD-87-37, Apr. 30, 1987).



 WELFARE REFORM PRESENTS

 ADDITIONAL OPPORTUNITIES AND

 CHALLENGES

-------------------------------------------------------- Chapter 0:4.4



All the welfare reform proposals that GAO reviewed would add new

enforcement tools but could also require more of OCSE and the states.

In addition, some of the proposals would change the funding structure

and OCSE's audit approach. Some proposals require greater

centralization of state operations and give some states tools that

they have sought, such as employer reporting of new hires or the

ability to suspend professional or driver's licenses. However, new

and expanded responsibilities may also strain OCSE's ability to

effectively implement changes and increase state workloads. New

demands under welfare reform could include broadening OCSE's role in

developing and coordinating expanded automated systems at the state

or federal level. In addition, state programs may also need greater

technical assistance from OCSE and HHS to ensure effective state

implementation.



 RECOMMENDATIONS

---------------------------------------------------------- Chapter 0:5



GAO is making several recommendations to the Secretary of Health and

Human Services to strengthen OCSE's management and leadership. Among

other things, these recommendations are aimed at establishing

performance goals for OCSE; promoting greater federal accountability;

reengineering OCSE audits of state performance to be more

outcome-oriented rather than process-oriented; and revising the

program funding structure to better support program priorities.



 AGENCY COMMENTS

---------------------------------------------------------- Chapter 0:6



HHS stated that the report provides a balanced appraisal of OCSE and

the national program's accomplishments, and that GAO's

recommendations are well taken. HHS provided additional information

about actions that it has planned or has in progress that address

several of GAO's recommendations. (See app. V.) While most of HHS'

actions are appropriate, GAO has some specific concerns about HHS'

response to establishing performance goals for OCSE; promoting

greater federal accountability; and changing the audits and funding

structure. (See pp. 95-97.) HHS also provided technical comments,

as did program officials from selected states and several child

support enforcement experts; their comments have been incorporated as

appropriate.



THE CHILD SUPPORT ENFORCEMENT

PROGRAM: SIGNIFICANCE,

ORGANIZATION, PERFORMANCE, AND

REFORMS

============================================================ Chapter 1



Today, child support enforcement is an issue for more American

families than ever before. The number of out-of-wedlock births and

divorces has escalated in recent years, and it is estimated about

half of American children will spend at least some time in

single-parent families.\3 Many of these single-parent families,

particularly those headed by young mothers, are at risk of welfare

dependency. Child support is critical to these families'

self-sufficiency. In the last 5 years, more and more single-parent

families have sought government assistance from the Aid to Families

With Dependent Children (AFDC) program, which requires recipients to

cooperate with the child support enforcement (CSE) program. In

addition, an increasing number of single-parent families not

receiving AFDC have voluntarily sought CSE's help in obtaining child

support from noncustodial parents. But in 1992, according to data

reported by the federal Office of Child Support Enforcement (OCSE),

only about 19 percent of the cases in the CSE program received any

child support payments.



In 1975, in response to the growth in the numbers of families

receiving AFDC, the Congress created the national CSE program. The

federal OCSE was created to monitor and help develop existing state

and local child support enforcement programs. Child support

collected for families receiving AFDC was to be returned to the

government; child support collected for non-AFDC families would help

these families avoid a need for cash assistance from the government.

Over the years, the Congress steadily expanded CSE program

enforcement tools, program requirements, and federal funding to

states. In 1992, the federal government paid $1.7 billion to states

in matching and other funds to serve a caseload of about 15 million

families--8.7 million of whom received AFDC.\4



Because of his concerns, the Chairman of the Subcommittee on Federal

Services, Post Office and Civil Service of the Senate Committee on

Governmental Affairs asked us to review the CSE program to determine

how the federal government could improve services to the states and

the families who depend on state CSE activities. Our review focused

on (1)whether the CSE program has the essential management tools in

place at the federal level that a program needs to fulfill its

mission; (2) how well the federal office, OCSE, has fulfilled its

role in fostering the development of state CSE programs; and (3) what

state CSE programs are doing to overcome barriers hampering CSE

efforts. In addition, we examined implications of welfare reform

proposals and the Government Performance and Results Act of 1993

(GPRA) for the CSE program.



--------------------

\3 Family Impact Seminar, "Reducing Family Poverty: Tax-Based and

Child Support Strategies," background briefing report (Washington,

D.C.: Dec. 4, 1992).



\4 The caseload estimate is from the Department of Health and Human

Services' (HHS) Child Support Enforcement Seventeenth Annual Report

to Congress, which contains data for fiscal year 1992. However,

refer to pp. 44 and 45 of this report for the limitations of these

data.



 THE CONGRESS CREATED THE

 NATIONAL CHILD SUPPORT

 ENFORCEMENT PROGRAM TO MEET

 GROWING NEED

---------------------------------------------------------- Chapter 1:1



Child support is a parental responsibility. However, because of the

growing number of parents who fail to assume this responsibility, the

Congress created the national CSE program in 1975 and significantly

amended it in 1984 and 1988. The program's purpose is to strengthen

existing state and local efforts to find noncustodial parents,

establish paternity, obtain support orders, and collect support

payments. Today, the program serves two populations: families

receiving AFDC and those who do not. Although the services provided

are essentially the same, collections are handled differently for the

two groups, with a portion of the AFDC collections being returned to

the state and federal governments and non-AFDC collections going

directly to the families. Increases in both groups have caused

caseloads to climb, and the service needs of both groups have become

increasingly complex.



 ESTABLISHING CHILD SUPPORT:

 MAKING PARENTS RESPONSIBLE

-------------------------------------------------------- Chapter 1:1.1



When two people, whether married or not, have a baby, they incur an

obligation to provide for their child. When parents live apart, the

parent not living with and providing day-to-day care for the child

(the noncustodial parent) is expected to help the other parent (the

custodial parent) provide for the child.



Although children are entitled to support from parents who live

apart, a legally binding document--a separation agreement or a

support order--is needed to establish the appropriate amount of

financial support and make the payment enforceable on the

noncustodial parent. If the parents were married at the time of the

child's birth, a support order is usually established when the

parents separate or divorce. If the parents were not married when

their child was born, the legal presumption of paternity conferred by

marriage is lacking, and a permanent support order cannot be

established or enforced on either parent until there is a legal

determination of paternity.\5



Paternity is established in either of two ways: (1) through

voluntary acknowledgment by the father or (2) if contested, through

determination based on evidence such as scientific (genetic testing)

and personal testimony. In such cases, paternity establishment

confers on children the legal rights and privileges that a child born

within a marriage has. Among them are rights to inheritance, medical

and life insurance benefits, social security, and possibly veteran's

benefits.



--------------------

\5 In some cases, a temorary support order may be established before

paternity is established.



 GOVERNMENT INVOLVEMENT

 TRIGGERED BY GROWING WELFARE

 CASELOADS

-------------------------------------------------------- Chapter 1:1.2



Before the national CSE program, federal and state governments became

involved in child support enforcement primarily through the AFDC

program, which provided welfare benefits to children who had

inadequate parental financial support. In 1950, the first relevant

federal legislation required welfare agencies to notify appropriate

law enforcement officials when AFDC was furnished to a child who had

been abandoned by a parent.\6 Since 1968, federal statutes pertaining

to the AFDC program have specifically required states to have

programs for establishing paternity and obtaining support for

children who receive AFDC. By 1975, an alarming rise in welfare

costs resulting from out-of-wedlock birth rates and parental

desertion as well as a growing demand to relieve taxpayers of the

financial burden of supporting these families prompted the Congress

to create the national CSE program as title IV-D of the Social

Security Act. The Congress believed government welfare expenditures

could be reduced, and to some extent prevented, by recouping AFDC

benefits from noncustodial parents' child support payments. In

addition, the Congress believed that earlier enforcement of child

support obligations for families not receiving AFDC could help

prevent these families from needing government support. The national

CSE program incorporated the already existing state programs.



--------------------

\6 See the Social Security Act Amendments of 1950, P.L. 81-734, sec.

321(b).



 AFDC AND NON-AFDC

 COLLECTIONS HANDLED

 DIFFERENTLY

-------------------------------------------------------- Chapter 1:1.3



Families who receive AFDC, and families who do not, enter the CSE

program in different ways; and the child support payments CSE

collects for them are distributed differently. A mother who requests

AFDC for her child is required as a condition of eligibility to

assign her rights to child support to the government and to cooperate

with the CSE program in locating and identifying the father of the

child.\7 If the child support that CSE collects for an AFDC family

does not, together with family income, make the family ineligible for

AFDC, then all but $50 of the monthly support payment goes to the

state and federal governments in proportion to their AFDC assistance

to the family. The family continues to receive its full monthly AFDC

grant plus the first $50 of the support payment.



If the family does not receive AFDC, all the child support collected

goes directly to the family.\8 Parents who do not receive AFDC are

under no obligation to establish paternity or to use CSE services to

collect child support. They do so, if at all, voluntarily.



--------------------

\7 There are procedures to exempt custodial parents from cooperation

for good cause.



\8 If a family has stopped receiving AFDC, not all the child support

collected may go to the family. In almost half the states, support

paid above the current obligation amount is used to reimburse any

child support owed to the state under the AFDC assignment provisions

prior to payments owed to the family.



 THE CSE CASELOAD, ESPECIALLY

 NON-AFDC FAMILIES, HAS

 GREATLY EXPANDED

-------------------------------------------------------- Chapter 1:1.4



Between 1980 and 1992, the nationwide CSE caseload\9 grew 180

percent, from 5.4 million to 15.2 million cases.\10



Part of that growth stemmed from the increase in the number of

single-parent families receiving AFDC. The average monthly number

rose more than 1 million in the past 5 years, increasing from nearly

3.6 million families in 1989 to just over 4.6 million in 1993. The

larger portion of the CSE caseload increase, however, was in non-AFDC

cases, which grew from 16 to 43 percent of the caseload during this

period. In fiscal year 1992, there were 8.7 million AFDC cases and

6.5 million non-AFDC cases. Figure 1.1 shows the increase in the CSE

caseload from fiscal year 1980 through 1992.



 Figure 1.1: Child Support

 Enforcement Caseload, Fiscal

 Years 1980-1992



 (See figure in printed

 edition.)



Source: OCSE annual reports.



--------------------

\9 Throughout this report, CSE caseload refers to all cases enforced

under title IV-D of the Social Security Act--both non-AFDC recipients

who specifically request services and AFDC recipients who are

automatically referred to and required to participate in the CSE

program.



\10 State data about 1992 caseloads and expenditures were the most

recent available about state programs.



 INCREASING NUMBER OF YOUNG,

 UNWED PARENTS MAKES CASELOAD

 INCREASINGLY DIFFICULT TO

 SERVE

-------------------------------------------------------- Chapter 1:1.5



Today, the CSE caseload is more difficult to serve than in the

earlier years because there are more young, unwed parents. Various

studies indicate that these cases usually require more services and

are more difficult to successfully serve than those involving married

or formerly married parents. For example, cases involving unwed

parents require paternity establishment, which may be contested

rather than acknowledged voluntarily. Also, unwed parents are

usually less able and less willing than married or formerly married

parents to pay child support. Such parents are generally younger and

have less education and earning capacity. They are likely to be

unemployed or unemployable and have little or no income with which to

pay support--some are still in high school. In addition, some unwed

parents are not aware of or do not fully understand the parental

responsibilities that CSE agencies try to enforce.



The growing size and complexity of the CSE caseload reflect major

changes in demographic characteristics of the American family. High

rates of divorce and out-of-wedlock birth have resulted in more

children living in single-parent households. For example, the number

of births to unmarried mothers increased 82 percent between 1980 and

1991. During the same period, the proportion of out-of-wedlock

births rose from 18.4 to 29.5 percent of all births.\11 U.S. Bureau

of the Census data indicate that there were 9.8 million custodial

mothers aged 18 years and older in 1990--39 percent more than in

1979, the first year for which this information was available.\12



The increasingly difficult-to-serve nature of the CSE caseload and

the links between nonpayment of child support, poverty, and increases

in families receiving AFDC benefits are underscored by socioeconomic

statistics. In 1989, according to U.S. Census data, 62 percent of

all custodial mothers did not receive child support payments, largely

because they lacked support orders.\13 In that same year, 32 percent

of all custodial mothers were living below the poverty threshold, and

three-quarters of them had not received child support.\14 Receiving

child support appears to be a particular problem for never-married

custodial mothers and their children--they made up 52 percent of the

AFDC caseload in 1991, up from 21 percent in 1976.\15



Census data indicate that of all never-married custodial mothers, 75

percent did not have child support orders and slightly more than half

had household incomes below the poverty level in 1989.



--------------------

\11 Child Support Enforcement Seventeenth Annual Report to Congress,

pp. 3-4.



\12 Current Population Reports, Series P-60, No. 173, Child Support

and Alimony: 1989 (Washington, D.C.: 1991), tables A-D.



\13 Of 6.2 million custodial mothers who did not receive support, 4.2

million did not have support orders. Of the others, 1.2 million had

orders but did not receive any payments, and 800,000 had orders but

payments were not due that year.



\14 Of those not receiving support, 75 percent did not have an order.



\15 Families on Welfare: Sharp Rise in Never-Married Women Reflects

Societal Trend (GAO/HEHS-94-92, May 31, 1994) and Families on

Welfare: Teenage Mothers Least Likely to Become Self-Sufficient

(GAO/HEHS-94-115, May 31, 1994).



 PROGRAM RESPONSIBILITY IS

 SHARED BY FEDERAL, STATE, AND

 LOCAL GOVERNMENTS

---------------------------------------------------------- Chapter 1:2



CSE is an intergovernmental program involving the federal, state, and

local governments. Federal responsibility for the CSE program lies

within HHS in the Administration for Children and Families (ACF).

Within ACF, OCSE manages the CSE program at the federal level. A

separate office within ACF, the Office of Information Systems

Management/CSE Information Systems, approves, monitors, and certifies

state information systems projects for all ACF programs, (funded

under the Social Security Act), including CSE, and reports on CSE

matters to the director of OCSE. In addition, ACF staff in HHS

regional offices are responsible for review and approval of states'

plans for all ACF programs, including CSE, AFDC, Job Opportunities

and Basic Skills Training, and others,\16 and for ensuring consistent

and uniform adherence to federal requirements governing all ACF

formula and entitlement programs. Figure 1.2 displays the

organization of CSE responsibilities within HHS.



OCSE is responsible for providing leadership, technical assistance,

and standards. When the Congress established the CSE program, it

envisioned an aggressive federal role in ensuring that states

actually develop strong and effective CSE programs. Title IV-D of

the Social Security Act mandates that OCSE provide technical

assistance to states to help them plan, develop, design, and

establish effective CSE programs. The act also directs OCSE to

establish standards for state program effectiveness and monitor the

operation of state programs through periodic audits. To help ensure

program effectiveness, OCSE has the authority to assess financial

penalties if an audit reveals a state has failed to meet certain

program standards. In addition, OCSE is responsible for maintaining

relationships with federal, state, and local government officials,

private organizations, and for individuals interested in the CSE

program, and for coordinating and planning CSE activities to maximize

program effectiveness.



State CSE agencies are responsible for all activities leading to

securing financial support and medical insurance coverage from

noncustodial parents for children involved in CSE cases. To meet

federal requirements and receive federal funds, state CSE programs

must have HHS-approved plans indicating compliance with federal law

and regulations and must operate programs in accordance with those

plans. HHS can withhold federal funding from states that do not have

approved plans. There are significant differences in the ways state

CSE programs are organized, where they are placed in the states'

organizational hierarchies, what relationships exist between the CSE

program and other state agencies, and the policies and procedures

that are followed. These characteristics usually vary by traditional

state-local service delivery structures, levels of court involvement

required by state family law, population distribution, and other

state variables. For example, some state child support agencies

operate their CSE programs with state funds through a network of

regional offices, while others share the funding with and supervise

county and other local jurisdictions' operations. Under both

circumstances, certain program responsibilities may be contracted out

to other entities. In addition, the state CSE agencies are not all

in human services agencies; in a few states, CSE is in the state

department of revenue or the attorney general's office.



--------------------

\16 These include foster care and adoption assistance, child welfare,

homeless youth, child care, and developmental disabilities.



 FUNDING DESIGNED TO CREATE A

 FEDERAL-STATE PARTNERSHIP

---------------------------------------------------------- Chapter 1:3



The CSE funding structure was designed to share program costs between

the federal and state governments. The federal government matches 66

percent of states' administrative costs and 90 percent of their costs

of developing management information systems\17 and certain other

services related to paternity establishment. The federal government

also pays incentives to states for collection efficiency. Incentives

are calculated separately for AFDC and non-AFDC collections by

dividing each by total program administrative costs. Incentive

payments for AFDC collection efficiency range in amounts equal to 6

to 10 percent of the AFDC collections. Incentive payments for

non-AFDC collections also range in amounts equal to 6 to 10 percent

of non-AFDC collections but cannot be greater than 115 percent of the

incentive payments paid for AFDC collection efficiency. These

incentive payments are funded from the federal portion of recovered

AFDC collections. Though federal matching funds are restricted to

CSE program costs, states may use the incentive payments to fund

programs other than CSE. They must, however, share incentives with

local governments that bear some of the administrative costs of the

CSE program.



--------------------

\17 The 90-percent federal match for systems development costs

expires at the end of fiscal year 1995.



 SERVICE DELIVERY IS DIVERSE AND

 COMPLEX ACROSS THE NATION

---------------------------------------------------------- Chapter 1:4



CSE is an administratively complex program. While the basic services

are the same in every location, different families need different

services. In addition, how services are delivered varies

geographically. The common services mandated by federal law include

client intake (including case establishment); locating noncustodial

parents; establishing paternity; establishing, reviewing, and

modifying support orders; enforcing financial and medical support

obligations; and collecting and distributing support payments.

Appendix I briefly describes these services and some of the

activities and organizations involved with each of them.



Families entering the CSE program require different combinations of

these services at different times, and thus their cases flow through

the program on different pathways. In some cases, the child's

paternity has not been established and the location of the alleged

father is unknown. In these cases, the custodial parent needs the

CSE program to help with every step: locating the alleged father,

establishing paternity and a child support order, enforcing the

order, and distributing collections received. In other cases, the

custodial parent may have a child support order and CSE agencies must

periodically review and possibly modify the order to ensure continued

conformity to state guidelines.\18 Order amounts may be increased or

decreased with changes in noncustodial parents' ability to pay, for

example, because of wage increases or job losses. Figure 1.3

illustrates various combinations and sequences of services that cases

require as they flow through the program.



 Figure 1.3: CSE Services and

 Case Flows



 (See figure in printed

 edition.)



Delivery of CSE services frequently involves the executive,

legislative, and judicial agencies of state and local governments,

such as tax collection agencies, the courts and district attorneys,

as well as private institutions, such as banks, employers, and credit

bureaus. At the local level, both enforcement and paternity

establishment may involve the courts to varying degrees. One study

of paternity establishment practices in a sample of nearly 250

counties found that the local agency responsible for child support

was the department responsible for human services in 75 percent of

the counties.\19 Only 43 percent of the counties, however, had

paternity establishment handled solely by the department of human

services. In most other counties, paternity establishment was a

joint responsibility of the human services agency and a prosecuting

or private attorney.



Paternity and support order establishment and enforcement may be

handled through a judicial or administrative process, depending on

the state in which the custodial parent lives. Under a judicial

process, authority to make paternity judgments, establish support

orders, and take enforcement actions rests with the courts;

proceedings take place in a legal setting and typically may involve

district attorneys, state's attorneys, county attorneys, judges,

legal aid societies, or private attorneys. In contrast, under an

administrative process, an agency of the executive branch of state

government has authority to administer certain aspects of state child

support law or regulation without court approval being necessary for

legally binding actions. The degree to which administrative rather

than judicial processes are used varies across all states and within

states. The functions and enforcement actions to which

administrative processes are applied differ, as well as the degree to

which the processes are used; the spectrum of processes is described

as ranging from purely administrative to quasi-judicial to purely

judicial.\20



--------------------

\18 All AFDC cases must be reviewed every 3 years, and non-AFDC cases

must be reviewed at the request of either parent.



\19 Pamela Holcomb, Kristin Seerfeldt, and Freya Sonenstein,

Paternity Establishment in 1990: Organizational Structure, Voluntary

Consent, and Administrative Practices (Washington, D.C.: The Urban

Institute, 1992).



\20 In most states, however, even those using purely administrative

processes, judges still enter support orders in divorce proceedings.



 PROGRAM RESPONSIBILITY AND

 TOOLS HAVE EXPANDED WHILE

 FEDERAL EXPENDITURES HAVE GROWN

---------------------------------------------------------- Chapter 1:5



To help meet the increasing challenge of child support enforcement,

the Congress has significantly amended CSE legislation over the

years. In addition, federal expenditures have grown considerably.

Most states continue to report net savings while federal net costs

for the CSE program have increased.



 LEGISLATIVE PROGRAM

 EXPANSION

-------------------------------------------------------- Chapter 1:5.1



Over the years, the Congress has expanded the responsibilities of the

CSE program. Under the Child Support Enforcement Amendments of 1984

(P.L. 98-378), states are to treat AFDC and non-AFDC cases the same.

The amendments also established the current funding structure. The

Family Support Act of 1988 (P.L. 100-485) and the Omnibus Budget

Reconciliation Act of 1993 (OBRA'93, P.L. 103-66) strengthened

requirements for paternity establishment, medical support, and

support order fairness and currency.



In addition to expanding program responsibilities, the Congress also

expanded program tools. The 1984 amendments, for example, required

universal wage withholding provisions in all support orders,

interception of federal tax refunds, and reporting delinquent payers

to credit bureaus. The Family Support Act encouraged states to

establish voluntary, civil paternity acknowledgment procedures and

provided for establishment of paternity standards that states must

achieve to avoid being penalized with reduced funding, among other

things. Appendix II lists the major requirements.



More recently, OBRA'93 strengthened the program by (1) requiring

increased opportunities for unwed parents to voluntarily acknowledge

or otherwise establish paternity in a less complicated and more

timely manner, including in hospitals; (2) removing impediments to

the enforcement of health insurance provisions in child support

orders; and (3) strengthening the paternity establishment performance

standards initiated by the Congress in the Family Support Act.



 INCREASED FEDERAL FINANCIAL

 EXPENDITURES FOR STATE CSE

 PROGRAMS

-------------------------------------------------------- Chapter 1:5.2



Between 1980 and 1992, annual federal expenditures for matching funds

to state CSE programs increased more than four-fold, from about $350

million to more than $1.3 billion. Figure 1.4 illustrates this

trend. Federal incentive payments to states, paid out of the federal

portion of the recovered AFDC funds, also increased, from $72 million

in fiscal year 1980 to $339 million for fiscal year 1992. (See fig.

1.5.)



 Figure 1.4: Federal

 Expenditures for Matching Funds

 to State CSE Programs, Fiscal

 Years 1980-1992



 (See figure in printed

 edition.)



Source: OCSE annual reports.



 Figure 1.5: Federal Incentive

 Payments to State CSE Programs

 From the Federal Share of AFDC

 Collections, Fiscal Years

 1980-1992



 (See figure in printed

 edition.)



Source: OCSE annual reports.



 FEDERAL NET COSTS FOR THE

 CSE PROGRAM HAVE INCREASED

 WHILE MOST STATES REPORTED

 NET SAVINGS

-------------------------------------------------------- Chapter 1:5.3



From 1980 to 1992, federal government spending on state CSE programs

increasingly outpaced what the federal government saved through AFDC

recovery. During that period, however, at least 75 percent of the

states reported a net savings due to their CSE programs. In other

words, federal payments to states for CSE--matching funds and

incentives--were not offset by federally retained AFDC collections,

but state-reported CSE costs were more than offset by the combination

of their retained AFDC collections and federal matching funds and

incentive payments. Through fiscal year 1988, there were net savings

to the public; since that time, costs have exceeded savings.\21 (See

table 1.1.)



 Table 1.1



 Net Budget Savings/Costs for States,

 Federal Government, and Taxpayers From

 the CSE Program, Fiscal Years 1980-1992



 (Dollars in thousands)



Fisc State net Federal net

al budget budget savings/ Net savings/

year savings costs costs to taxpayers

---- ------------ ------------------ ------------------

1980 $230,152 $-102,698 $127,454

1981 260,969 -128,377 132,592

1982 307,309 -147,946 159,363

1983 312,296 -138,078 174,218

1984 365,522 -105,048 260,474

1985 317,334 -230,888 86,446

 \a

1986 275,644 -263,177 12,467

1987 341,826 -337,278 4,548

1988 381,001 -355,424 25,577

1989 403,333 -480,056 -76,723

1990 338,469 -528,135 -189,666

1991 385,059 -586,454 -201,395

1992 434,317 -604,946 -170,629

----------------------------------------------------------

Note: Federal net savings/costs refer to the federal share of AFDC

collections less incentive payments and matching funds paid to the

states.



\a According to the Congressional Research Service, the sudden

decrease in taxpayer savings in 1985 was caused primarily by the

implementation of the $50 "pass through" to AFDC families, effective

in fiscal year 1985.



Source: OCSE annual reports.



--------------------

\21 Both the federal and state governments may also experience

savings in the AFDC programs by keeping or moving families off of

AFDC through successful child support enforcement efforts. Such

savings, however, are difficult to measure.



 PERCEPTION OF PROGRAM'S

 PERFORMANCE VARIES WIDELY

---------------------------------------------------------- Chapter 1:6



A widespread public perception exists that the CSE program is failing

to adequately address the nationwide problem of child support

nonpayment. Some state program directors, however, believe CSE

performance has improved over the years, citing rising collections in

recent years in the face of an increasingly large and complex

caseload often involving teenage parents and out-of-wedlock cases.

In part, disagreements about program performance stem from differing

notions of what can realistically be expected from the child support

enforcement system.



Advocates for children, policy analysts, human service and CSE

professionals, and members of the Congress have characterized CSE's

effect on the national child support enforcement problem as ranging

from "unacceptable" to "dismal." In support of this assessment, they

cite Bureau of the Census and other national survey data on the size

of the problem nationwide. These data indicate that 62 percent of

all custodial mothers in the United States did not receive child

support in 1989. One study has estimated the gap between total child

support that should be paid nationwide and total child support paid

as $34 billion in 1990.\22



Advocates and others also have made specific criticisms of CSE's

program performance on its current caseload. Using data reported by

states to OCSE, some have faulted CSE because only 19 percent of all

custodial parents served by the CSE program in 1992 actually received

support payments. These observers also point out that of the 15.2

million cases in the CSE program in fiscal year 1992, more than 6.7

million cases, or about 44 percent, were without orders to pay

support. In addition, they cite the fact that states reported

collecting only about one-fourth of the child support due for fiscal

year 1992 and prior years.



Others in the child support enforcement community, however, believe

that CSE program performance has improved greatly in recent years in

the face of growing caseloads, federal mandates, and increasingly

complicated out-of-wedlock cases. Between 1980 and 1992, states

reported that dollar collections steadily increased by over 400

percent, from about $1.5 billion to $8 billion. In addition, both

AFDC recovery and the proportion of cases for which collections were

achieved increased between 1980 and 1992 along with a rise in the

caseload. The program's recovery of AFDC payments increased

approximately 118 percent, from a national rate of 5.2 percent to

11.4 percent. Similarly, the proportion of cases for which some

collections were received increased 36 percent, from a rate of 13.7

percent to 18.7 percent.



In part, the disagreement between those who criticize the program and

those who defend its accomplishments hinges on differing notions of

what are realistic and achievable expectations for the program. Some

expect the program to achieve support for more of the families now in

the program and to reach out and help additional families. Others

have more limited expectations for various reasons, including the

ever-increasing number of out-of-wedlock births, the fact that some

custodial parents choose not to pursue child support, and

uncertainties about the ability of some noncustodial parents to pay

support.



The ever-increasing number of out-of-wedlock births requires CSE to

establish paternity on more cases--a sometimes difficult and

time-consuming task. In-hospital voluntary paternity acknowledgment

is extending CSE's reach early and has been shown to be increasing

the number of paternities established and the efficiency of

establishment. However, this initiative depends on the cooperation

of both parents and results to date suggest that much remains to be

done. Research reported in 1991 from the state of Washington, a

pioneer of this approach, showed that nearly 40 percent of unmarried

supposed fathers were signing voluntary acknowledgments. Other state

programs' report similar results. These results mean that more than

half of unwed fathers will have to be pursued through other means if

child support is to be collected.



Complicating the question of what realistic expectations are for CSE

is the fact that not all custodial parents needing child support are

served by the CSE program, and some choose not to use its services.

According to 1987 Bureau of the Census data, 162,000 teenaged mothers

were not awarded or were awarded but did not receive regular child

support payments. Nearly 45 percent said they did not receive

payments because they did not pursue the matter or did not want child

support. Similarly, results from state demonstration projects of

review and modification of orders also illustrate the reluctance of

some families to have CSE involved in their cases. Reasons that

non-AFDC custodial parents gave for refusing to have their awards

reviewed included (1) fear of jeopardizing current payments, (2)

desire to avoid court proceedings, (3) belief the noncustodial parent

is paying all he or she can afford, and (4) doubt that the review

would result in payments.



Finally, program efforts may not guarantee that cooperative

noncustodial parents will be able to pay support. Our previous work

has shown that 9 percent of noncustodial fathers aged 23 to 31 have

no income to pay support.\23



Other research has revealed that 27 percent of the noncustodial

fathers who did not pay child support in 1990 were unemployed for at

least part of that year. In addition, fathers' ability to pay has

been shown to influence their compliance with child support

awards.\24



--------------------

\22 Elaine Sorensen, Noncustodial Fathers: Can They Afford to Pay

More Child Support? (Washington, D.C.: The Urban Institute, Jan.

1994).



\23 Child Support Assurance: Effect of Applying State Guidelines to

Determine Fathers' Payments (GAO/HRD-93-26, Jan. 21, 1993).



\24 Judi Bartfield and Daniel Meyer, Are There Really Deadbeat Dads?

The Relationship Between Ability to Pay, Enforcement, and Compliance

in Nonmarital Child Support Cases, DP#994-93 (Madison, Wis.:

Institute for Research on Poverty, Mar. 1993).



 CSE AND FEDERAL REFORM

 INITIATIVES

---------------------------------------------------------- Chapter 1:7



The CSE program is at the forefront of congressional efforts to

reform government operations in general and, more specifically, to

reform welfare. In August 1993, GPRA became law and the nationwide

CSE program was subsequently selected as a pilot for the

implementation of GPRA. In addition, in late 1993 and 1994, several

welfare reform proposals emerged from the Congress and the

administration that included changes for the CSE program.



 CSE IS AMONG PILOTS FOR

 GOVERNMENT MANAGEMENT REFORM

-------------------------------------------------------- Chapter 1:7.1



CSE is among the pilot projects for government management reform

under GPRA. Unlike most other pilots, however, the CSE pilot

encompasses the entire federal and state CSE program, not just

federal operations.



The Congress enacted GPRA to strengthen federal program management

with goal-setting, performance measurement, and results-reporting

requirements. GPRA is intended to accomplish several government

reforms, including improved (1) federal program effectiveness and

public accountability, (2) service delivery, and (3) congressional

decision-making. To that end, GPRA requires all federal agencies to

have strategic plans by September 30, 1997, and performance plans by

fiscal year 1999.



To initiate program performance reform and identify the best way to

implement this new system across the federal government, GPRA

requires a series of pilots. As a pilot, OCSE is required to have a

fiscal year 1995 performance plan by the start of that fiscal year.

An OCSE official said the plan was submitted to HHS' Assistant

Secretary for Management and Budget on September 27, 1994.



 WELFARE REFORM PROPOSALS

 CALL FOR CHANGES IN CSE

-------------------------------------------------------- Chapter 1:7.2



Major welfare reform proposals introduced in the 103rd Congress

contained changes for the CSE program. Some proposals call for more

aggressive and stringent paternity establishment procedures, central

support award registries in states, and centralized state collection

procedures, among other measures. In addition, some of the welfare

reform proposals would add to OCSE's responsibilities by requiring it

to establish and operate national databases for support orders and

other information.



 SCOPE AND METHODOLOGY

---------------------------------------------------------- Chapter 1:8



In doing our work, we reviewed the history of the CSE program,

focusing on the period from 1980 to 1992, the most recent year for

which data were available at the time of our review. We interviewed

current and former program staff in all parts of the CSE program--at

OCSE, in HHS regional offices, and in state and local CSE

programs--including caseworkers, local office managers, county

attorneys, state CSE and social service program directors, HHS and

state auditors, and others. We also talked with CSE professionals

affiliated with private companies, universities, advocacy groups, and

policy and social research organizations. We continually reviewed

published literature on child support and attended meetings of

professional associations concerned with CSE issues. We analyzed CSE

program statistics as reported by states and published by OCSE and

discussed these with officials.



To identify barriers that hinder state program CSE efforts and how

states are addressing the barriers, we performed case studies in

eight states: Arizona, Iowa, Kentucky, Massachusetts, New York,

Oregon, Texas, and Virginia. (See app. III.) We selected these

states because they represented different CSE caseload sizes, both

centralized and decentralized program structures, administrative and

judicial case processing approaches, a variety of performance

histories as reflected in data submitted for OCSE annual reports, and

different regions of the country. In addition, we reviewed

socioeconomic data, including rates of out-of-wedlock births,

divorce, and unemployment for these states and others. The scope of

our work did not include the issues surrounding interstate child

support enforcement. To assess the potential implications of welfare

reform on the CSE program, we reviewed several welfare reform

proposals containing changes to CSE. (See app. IV.)



We conducted our review from November 1992 to December 1994 in

accordance with generally accepted government auditing standards.

HHS provided written comments on a draft of this report. These

comments are discussed in chapter 5 and included in appendix V. We

also obtained comments on a draft of this report from selected

officials in each of the states we studied and several child support

enforcement experts. Their suggested revisions were incorporated, as

appropriate, into this report.



CSE PROGRAM LACKS ESSENTIAL

MANAGEMENT TOOLS

============================================================ Chapter 2



The CSE program lacks essential management tools to help fulfill its

mission. Missing are a well-articulated mission, programwide

planning and goal-setting, and accurate, consistent data that can be

used to measure progress toward goals. In addition, the program's

incentive funding structure is weakly linked to program performance.



As the need for CSE services has continued to grow because of rising

divorce rates and numbers of out-of-wedlock births, an evolving

history has given CSE a complex mission. Originally intended

primarily to recover federal and state welfare costs from the child

support payments owed to AFDC families, CSE today is required to

serve AFDC and non-AFDC families equally. In addition, some

services, such as enforcing medical support, do not result in child

support collections. As a result, the program faces competing

priorities.



In the face of this expanded mission, CSE lacks a program plan and

measurable program goals that could be used to set priorities. Only

one national goal exists--paternity establishment--and that was

mandated by the Congress. In addition, despite nearly 20 years of

state reporting, program data are inadequate for decision-making

because of unclear definitions from OCSE and inaccurate reporting by

the states. Finally, CSE's funding structure has not been effective

in achieving program improvements. The structure of incentive

payments continues to reflect CSE's original, narrower mission of

recovering welfare costs, and the link between incentive payments and

state program performance is weak.



 CSE'S MISSION HAS BECOME

 COMPLEX

---------------------------------------------------------- Chapter 2:1



The CSE program's mission has become more complex over time as the

federal government expanded program requirements but made few changes

to critical program components, such as the funding structure. As a

result, different stakeholders--federal, state, and local program

officials; custodial and noncustodial parents; advocacy groups; and

elected leaders--have differing expectations of the program.

Initially, states and the federal government focused the program's

mission on easing taxpayer burden through recovering AFDC payments.

Over time, the program's mission has been broadened from primary

concern with government economy to concern with the economic security

of children in both AFDC and non-AFDC families. In addition, some

program activities, such as establishing medical support enforcement,

focus more on noncollection outcomes and may use program resources

without generating increased child support collections in the short

term or at all. Despite these changes to the mission, important

program components, such as the performance indicators used in

federal audits of state programs and the structure of federal

incentive payments to states, continue to emphasize AFDC cost

recovery and welfare savings.



Lack of alignment among program expectations--recover AFDC but also

serve all in need and provide services that do not result in child

support collections--has left state programs in awkward positions

with their state legislatures and executive leadership. As one state

program director observed to us,



 "[M]ost states are caught in an identity crisis now . . ..

 [W]e sold our program when it [was] supposed to generate revenue

 to reduce state cost . . .. [T]he taxpayers were the clients

 who were reimbursed the welfare expense . . .. [W]e [are]

 moving now toward providing services to families, but the

 structure and the funding is [sic] not supportive. It's not

 clear . . .. I think a national agenda would be very

 desirable."



Moreover, given the competing priorities in program mission and the

differing pressures generated by program expectations and

requirements, state program directors must decide how to spread their

resources among required collection and noncollection activities.



In addition, welfare reform may further expand CSE's mission. Some

proposals broaden the program to include all child support cases in

the country.



 CSE'S ORIGINAL MISSION OF

 RECOVERING WELFARE COSTS

 COMPLICATED BY EXPANDING

 REQUIREMENTS

-------------------------------------------------------- Chapter 2:1.1



CSE's original emphasis on recovering welfare costs has diminished as

expanding requirements created a much broader and more complicated

program mission. In addition to welfare recovery, there is now more

emphasis on activities that require a long-term view of the program's

overall social as well as financial benefits for both AFDC and

non-AFDC families, such as medical support and paternity

establishment.



When the national CSE program was established in 1975, it focused on

recovering AFDC payments. The priority placed on recovering AFDC

payments was supported by state laws and the funding structure. Many

states had laws allowing courts to set current support orders equal

to a family's public assistance grant to recover all of the AFDC

payments. In addition, the incentive payment structure established

in 1975 rewarded states only for recoveries of AFDC collections.

Thus, the primary beneficiaries of the early program were taxpayers,

not families and children.



As noted previously, in 1984 and 1988, the Congress extended CSE's

authority and services, thus expanding CSE's mission. While

continuing a focus on welfare cost recovery, these amendments raised

the priority of several other aspects of CSE. The 1984 legislation

increased emphasis on welfare prevention by providing that states

serve AFDC and non-AFDC families in the same way. Providing

equivalent service to non-AFDC families, however, has significantly

increased most states' CSE caseloads as described in chapter 1 and

illustrated in figure 1.1. In some states, the non-AFDC caseload is

greater than the AFDC caseload.



In addition, 1984 amendments and subsequent legislation\25



expanded state responsibilities by mandating the inclusion of medical

support in child support orders and the provision of services to

families who only receive Medicaid. To avoid a potential reliance on

Medicaid, these mandates require state programs to ensure that

parents provide medical insurance for their children whenever they

have a reasonable opportunity to do so. However, medical support

enforcement requires an investment of staff and automated resources

that does not produce child support collections.



Amendments in 1984 further reduced the emphasis on welfare recovery

by setting a $50 limit on the amount of child support that AFDC

families could retain.\26 This change allowed AFDC families to keep

some of the child support collected, while the government retained

less. However, some state program officials in the states we visited

commented that this provision is an administrative "nightmare" and it

added greater complexity to the distribution of collections.



The 1988 amendments continued to broaden and complicate the program's

mission by requiring states to (1) meet performance standards for

paternity establishment and (2) undertake periodic review of child

support orders and states' guidelines governing them to keep orders

up-to-date. Paternity establishment is an essential first step

toward obtaining a child support award and collection. However, it

can be time-consuming and may not result in collections for some

time, if at all, depending on case complexity and collectibility.\27

Another potentially time-consuming and labor-intensive activity,

periodic review and adjustment of child support orders, has also been

shown to substantially increase collections, but for a small

percentage of cases. In addition, states now must respond to

requests for review and modification from both noncustodial and

custodial parents.



--------------------

\25 The Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203,

sec. 9141) amended program requirements to provide CSE services to

families who receive Medicaid.



\26 The 1975 legislation had set a $20 limit, but that provision

expired in 1976. No limit was in effect thereafter until the 1984

amendments.



\27 Case complexity and collectibility depend on such factors as

whether the case is contested; whether location, blood tests,

subpoenas, and other program efforts are required; and the

noncustodial parent's ability to pay.



 AUDIT PERFORMANCE INDICATORS

 AND INCENTIVE PAYMENTS ARE

 AIMED AT RECOVERING WELFARE

 COSTS

-------------------------------------------------------- Chapter 2:1.2



Despite the movement to broaden CSE's mission, important program

components--audit performance indicators and incentive payments--

remain focused on AFDC cost recovery, not the broader goal of

contributing to families' economic security. OCSE is required to

audit every state program at least once every 3 years, and the audit

performance indicators for state programs emphasize AFDC collections.

In addition to determining regulatory compliance, the audits assess

the performance of state CSE programs by three indicators, two of

which focus on AFDC collections: (1) AFDC collections divided by

AFDC payments (less payments to unemployed parents),\28 (2) non-AFDC

collections divided by administrative costs,\29 and (3) AFDC

collections divided by administrative costs.



The incentive payment structure continues to give priority to AFDC

collections despite the changes in 1984. While expanding program

emphasis beyond recovery of welfare costs, the 1984 amendments

changed the incentive structure to reward state efforts to make

non-AFDC collections as well as AFDC collections. However, in this

scheme, AFDC collection efficiency still has priority because

non-AFDC collection incentive payments are capped at 115 percent of

AFDC collections. That is, no matter how well a state program does

in collecting non-AFDC support, its efforts may not be fully

rewarded. In addition, the lack of incentive payments for medical

support efforts have given these efforts a low priority. AFDC

collection efforts, therefore, drive state performance. Furthermore,

HHS' Office of the Inspector General found that some state and local

officials are concerned that using collection efficiency for

determining incentives tends to penalize states for incurring

additional significant costs that are not expected to yield increased

total collections, both AFDC and non-AFDC, during the same year, such

as costs for in-hospital voluntary paternity establishment programs

aimed at new unwed parents.



--------------------

\28 States make AFDC payments to children in single-parent families

and two parent-families, who are needy because of the unemployment of

one of their parents. In the calculation for the first indicator,

AFDC payments to two-parent families are subtracted from the total

amount of AFDC benefits paid.



\29 The administrative costs used in these calculations may not

include laboratory costs incurred in determining paternity if a state

chooses to exclude them.



 SOME STATE LEADERS STILL

 EMPHASIZE CSE'S RECOVERY OF

 WELFARE COSTS AND GENERATION

 OF ADDITIONAL STATE REVENUE

-------------------------------------------------------- Chapter 2:1.3



Despite the program's shifting emphasis away from recovery of welfare

costs, some state leadership--legislative and executive

decisionmakers--still expect CSE to generate revenue, according to

state CSE officials. In the eight states we visited, many program

officials said that state leadership tended to focus more on the

program's revenue potential than on the social goals of promoting

families' economic security.



Some state program directors told us that their states' interest in

CSE as a revenue generator makes it difficult for them to achieve a

balanced program. For example, a senior Oregon program official said

that it is difficult to go to the legislature with a message

balancing both social and fiscal goals. He explained that the only

way to get more money from the legislature is to emphasize the

program's money-making potential. If the program's management went

to the legislature and talked about economic self-sufficiency for

custodial families, he believed they would lose the budget battle.

Overall, he concluded, dollar goals are this program's clearest

mission and the easiest to defend.



New York Office of Child Support Enforcement officials expressed

similar sentiments about their state legislature's goals. These

officials believed the legislature's primary focus is on collections.

As a result, state CSE officials made a deliberate decision to link

child support enforcement to revenue generation, rather than

presenting it as a programmatic expenditure along with other social

programs to obtain more resources for the program.



To meet the fiscal expectations of their legislatures and executive

leaders, some state programs set priorities and risk audit findings

of deficiencies that could result in financial penalties. For

example, OCSE's 1988 audit of Iowa's CSE program revealed medical

support enforcement deficiencies, and program officials were not

surprised. The CSE director acknowledged that, in response to

legislative expectations that the program generate revenue, they had

focused their limited staff and automated resources on

revenue-generating program activities. As a result, they did not

give medical support enforcement priority attention before the audit

because of the staff time and automated resources it would have

required.



 WELFARE REFORM MAY FURTHER

 EXPAND CSE'S MISSION

-------------------------------------------------------- Chapter 2:1.4



Among other changes, some welfare reform proposals would expand the

responsibilities of CSE to create a central registry containing all

child support orders, even those not now enforced under the program.

The states, through a central public agency, would be responsible for

collection and distribution of the payments. All but one of the

proposals for including all orders in the program have criteria that

allow parents not to participate in the order registry and all would

allow parents not to participate with the central state collection

agency. These proposals, however, might further move the focus of

the program's mission away from welfare recovery because a larger

portion of previously unserved non-AFDC families would be included.



 PLANNING AND GOAL-SETTING

 EFFORTS FALL SHORT

---------------------------------------------------------- Chapter 2:2



In the face of multiple and sometimes competing expectations among

stakeholders, OCSE's past planning and goal-setting efforts have

failed to set program priorities or outcomes; they have focused on

OCSE's activities rather than on the CSE program as a whole. OCSE

has not had a planning process that focused on outcomes for (1) the

program as a whole or (2) its role in leading the program.

Furthermore, except for paternity establishment, national and annual

program goals that states are expected to achieve have not been

defined for the program. The paternity establishment goals were

defined by the Congress when it legislated paternity establishment

standards in 1988. While results-oriented planning has not been

legislatively required of OCSE in the past, it is recognized as an

important tool for effective program management, and GPRA now

requires it.\30



In response to the GPRA mandate for all federal agencies to develop

strategic plans by September 1997, OCSE has taken the initiative to

develop a strategic plan early. In addition, OCSE is a GPRA

implementation pilot agency and, as such, is also preparing an annual

performance plan before one is required. While this new planning

effort appears to be avoiding some past weaknesses by including

stakeholders and establishing long-term goals for the national CSE

program, several issues remain to be addressed as OCSE continues to

build its planning discipline.



--------------------

\30 Our previous work (and that of others) has identified the

importance of strategic planning and outcome measurement to effective

program management. See "Management Vision Needed" in Department of

Education: Long-Standing Management Problems Hamper Reforms

(GAO/HRD-93-47, May 28, 1993) and explanation of strategic management

in Management of VA: Implementing Strategic Management Process Would

Improve Service to Veterans (GAO/HRD-90-109, Aug. 31, 1990); Program

Performance Measures: Federal Agency Collection and Use of

Performance Data (GAO/GGD-92-65, May 4, 1992); U.S. Department of

Agriculture: Revitalizing Structure, Systems, and Strategies

(GAO/RCED-91-168, Sept. 3, 1991); and Social Security: Sustained

Effort Needed to Improve Management and Prepare for the Future

(GAO/HRD-94-22, Oct. 27, 1993).



 PLANNING EFFORTS HAVE NOT

 FOCUSED ON OUTCOMES

-------------------------------------------------------- Chapter 2:2.1



Although expanding responsibilities established multiple priorities

for the CSE program over the years, OCSE had not engaged in a

planning approach that solicited stakeholders' ideas, identified

long-term goals for implementing the program's mission, or focused on

program outcomes. Instead, previous planning efforts have

principally focused on OCSE, not the national program, with an

emphasis on process tasks and activities instead of on the desired

outcomes of these activities. Past OCSE planning efforts were

abandoned or were focused primarily on implementing 1984 and 1988

amendments. An early effort in 1980, entitled "Strategic Plan for

the 1980's," was developed by OCSE staff with input only from HHS

regional staff, not other stakeholders, but this plan was dropped a

year after it was produced.



OCSE's more recent planning efforts, before its GPRA pilot status,

focused on its own activities rather than on what it planned to

accomplish with these activities. For example, OCSE's plan listed

activities such as "award and monitor new technology transfer

contract" and "conduct judicial training conference using judicial

curriculum guide." However, the plan did not identify what outcomes

were expected or desired from these activities. In addition, OCSE

did not develop or identify the indicators for measuring the

effectiveness of these activities in the plan, the tracking document,

or the periodic progress reports.



 EXCEPT FOR PATERNITY

 ESTABLISHMENT, NATIONAL AND

 ANNUAL PROGRAM GOALS ARE

 MISSING

-------------------------------------------------------- Chapter 2:2.2



Although OCSE has advised state programs to develop goals, it has not

done so for the national program. In the face of OCSE failure to set

national or annual goals, the Congress mandated performance standards

for state paternity efforts\31 in 1988 and amended them in 1993.\32

These paternity establishment standards effectively set a national

goal for all states to eventually attain and differing annual goals

for states, depending on their past paternity establishment

performance. The standards hold all states accountable for improving

performance until they reach a maximum, rather than a minimum, level

of performance. As shown in table 2.1, the paternity establishment

standard requires state programs to continuously improve on their

individual performance until at least 75 percent of the cases that

need paternity established have it established. In addition, greater

proportionate improvement is required from low performers.



 Table 2.1



 Required State Paternity Establishment

 Percentages Based on Past Year's

 Performance



 (For CSE cases requiring paternity

 establishment)



Percentage established Required annual increase

----------------------------- -----------------------------

Less than 40 6 percentage points



40 or greater but less than 5 percentage points

45



45 or greater but less than 4 percentage points

50



50 or greater but less than 3 percentage points

75



75 None

------------------------------------------------------------

Source: 42 U.S.C. 652(g).



In the absence of federally established goals in other areas, some

states have developed their own goals. The Texas legislature, for

example, holds the CSE program accountable for meeting a series of

annual output and outcome goals. Output goals are established for

such things as the number of (1) paternity actions filed, (2) notices

of delinquencies filed, and (3) income tax refund offsets submitted

to the Internal Revenue Service.\33 In addition, the Texas CSE

program has an efficiency goal for its collections-to-cost ratio.

Outcome goals include the number of (1) paternities established, (2)

orders established or modified, and (3) collections obtained.



--------------------

\31 The Senate Finance Committee stated in its report on the 1984 CSE

amendments that OCSE "has not fully implemented the requirements for

the establishment of standards of effectiveness." Child Support

Amendments, Report No. 98-387 (Apr. 9, 1984).



\32 Because of technical problems with the modification, regulations

have not yet been issued implementing the revised standards.



\33 Since our visit to Texas in 1993, the CSE program has changed its

output goals. It no longer measures paternity actions filed.



 OCSE IS BEGINNING TO BUILD

 RESULTS-ORIENTED PLANNING

 DISCIPLINE

-------------------------------------------------------- Chapter 2:2.3



In response to GPRA's mandate, OCSE is beginning to build a planning

discipline that includes stakeholders and defines expected results

and the means of measuring achievement, not just processes and

activities or the quantity of output. OCSE is developing a strategic

plan intended to articulate the fundamental mission of the program

and establish long-range performance goals to implement its mission.

Furthermore, unlike past planning efforts that did not include

program stakeholders, OCSE has assembled a core planning team of OCSE

and HHS regional office officials and state program representatives.

In addition, OCSE has engaged state CSE program directors in the

planning process and held focus groups at a national CSE conference

to obtain comments and suggestions on its draft strategic plan from

advocates and CSE professionals.



OCSE's August 10, 1994, draft strategic plan goes beyond what GPRA

requires of a strategic plan. In addition to a program mission and

two general goals focusing on paternity and order establishment, OCSE

has defined numerous objectives and many quantitative performance

indicators for each goal. In contrast to past planning efforts, the

objectives and performance indicators address such key areas as

paternity and order establishment and medical support enforcement as

well as collections. Also, in terms of collections, an objective is

"to increase the collection rate" and various performance indicators

are listed that can be used to measure the accomplishment of this

objective. Such an objective will help the program identify what

progress can be made in getting support payments for a larger

proportion of families rather than simply increasing the absolute

dollars collected.



As a GPRA pilot project, OCSE has also developed an annual

performance plan for fiscal year 1995 before such a plan is required

from all federal agencies. The annual performance plan is intended

to provide a direct link between the program's longer-term goals and

what state programs and OCSE's managers and staff will need to

accomplish each year. According to GPRA and the Office of Management

and Budget guidance, such plans should include several elements such

as (1) one or more performance goals, (2) performance indicators that

will be used in measuring the goals, and (3) a description of the

means to be used to verify and validate measured values. According

to an OCSE official, the performance plan was submitted to the Office

of Management and Budget by September 30, 1994, but it was not

available for our review. However, another OCSE official said that

the performance plan is not so detailed as to contain outcome goals

for OCSE itself. The same OCSE official said these matters may be

addressed in an in-house OCSE operating plan.



 SOME ISSUES REMAIN TO BE

 ADDRESSED IN OCSE'S PLANNING

 EFFORTS

-------------------------------------------------------- Chapter 2:2.4



As of September 1994, OCSE's new planning efforts under GPRA had

avoided repeating some past planning weaknesses and omissions, but

OCSE had yet to address several important issues including outcomes

and effectiveness measures for its own activities. However, OCSE

officials said they recognize that the planning process is ongoing

and that the strategic plan is a "living document" to which they

expect to make continuous revisions.



OCSE's August 1994 draft strategic plan described some important

activities OCSE will undertake to achieve some of the plan's

objectives, but the plan does not define how OCSE will measure the

results of these activities or the outcomes expected from services

they currently provide to the states. Failing to associate outcomes

with activities is a past weakness that OCSE has the opportunity to

correct through its current planning efforts, although it is not

required of the GPRA strategic plan. For example, the plan states

OCSE will "conduct an in-depth assessment of OCSE regulations,

services, standards, and programs to identify contradictory and

confusing regulations, unnecessary or ineffective services, and

standards that do not contribute to customer service." However, OCSE

does not indicate how it will measure the accomplishments from this

activity. In addition, OCSE has not defined outcomes for itself

regarding the services it provides to the states such as operating

the Federal Parent Locator Service and processing state requests for

federal tax refund interception by the Internal Revenue Service.\34

OCSE has also not provided outcomes for future timeliness of

regulations, responsiveness to states about audits and policy

questions, and regional HHS office commitment and feedback. These

are the types of issues that OCSE will need to address if it is to

build a meaningful planning discipline. An OCSE official told us

that OCSE's services and results will be addressed in subsequent OCSE

operating plans.



Other issues that have not yet been addressed by the planning process

are the actions needed by OCSE or the Congress to align the existing

funding structure and audit approach with the CSE program's broad

mission. However, an OCSE official told us that changes to the

funding structure and audit were contained in the Clinton

administration's welfare reform proposal submitted to the 103rd

Congress.



--------------------

\34 Federal tax refunds may be intercepted by the Internal Revenue

Service and sent to state CSE programs to satisfy unpaid child

support obligations.



 BETTER DATA ARE NEEDED FOR

 ACCURATE PERFORMANCE

 MEASUREMENT

---------------------------------------------------------- Chapter 2:3



Despite nearly 20 years of annual performance reporting, program data

remain seriously flawed because of inadequate reporting standards and

limited state reporting capabilities. As we have reported in the

past, the resulting lack of accurate and consistent data hinders

meaningful planning, analysis, performance measurement, and

management improvement.\35 OCSE is attempting to improve program data

reporting, but its main effort has been on hold because of the

transition between administrations in 1993 and pending welfare

reforms that could alter reporting requirements. Given these

circumstances, current data collection will not adequately support

the performance reporting GPRA requires.



--------------------

\35 See Child Support: Need to Improve Efforts to Identify Fathers

and Obtain Support Orders (GAO/HRD-87-37, Apr. 30, 1987).



 STATES ARE REQUIRED TO

 REPORT PROGRAM DATA TO OCSE

 ANNUALLY

-------------------------------------------------------- Chapter 2:3.1



OCSE is mandated to prepare an annual report to the Congress no later

than 3 months after the end of each fiscal year using data reported

by the states. This report is supposed to include, among other

information, program costs and collections, OCSE costs and staffing,

caseload size, and service data from the states. Since 1977, there

have been 17 such annual reports with increasing amounts of

information about the CSE program.



 OCSE HAS NOT DEVELOPED

 UNIVERSALLY UNDERSTOOD DATA

 REPORTING STANDARDS

-------------------------------------------------------- Chapter 2:3.2



OCSE has not developed universally understood or applied definitions

and procedures by which the individual state CSE programs can collect

and report data. An unduplicated caseload count, essential for

accurate national program performance measurement, for example, is

difficult to obtain because of the lack of universally applied

definitions and procedures. Within OCSE's definition of a "case,"

for example, differences occur in reporting because of different

state interpretations. OCSE defines a CSE case as "every absent

[noncustodial] parent who is now or may eventually be obligated under

law for the support of one or more dependent children." Some

jurisdictions establish separate child support cases for each child

with a custodial mother for whom the father is not identified because

their fathers may be different; however, not all jurisdictions do

this. Duplicate case counting can also occur when an AFDC case

becomes a non-AFDC case as the result of successful collection

efforts. The family may be counted both as an AFDC case and as an

AFDC "arrears-only" case because delinquent child support is still

owed for the time the family was receiving AFDC.



In addition, OCSE's description of when a case may be closed is open

to interpretation. As a result, collection rate statistics as well

as total caseload figures can be misleading since all states are not

equally aggressive in closing cases. OCSE has defined the criteria

for case closure, but it has not set a time frame within which a case

must be closed. Consequently, states that keep cases open longer

than others may report higher caseloads and lower collection rates

than those that close cases as soon as they meet OCSE's case closure

criteria.



 STATE DATA ARE NOT

 AVAILABLE, RELIABLE, OR

 CONSISTENT

-------------------------------------------------------- Chapter 2:3.3



Data basic to meaningful assessment of CSE program performance at the

state and local levels are not available from all states, reliable,

or consistent. Information that is available in one of the states we

visited but not reported to OCSE, for example, includes the

proportion of cases needing different services, such as location of

the noncustodial parent, enforcement, wage withholding, and

collection monitoring. Without this information, OCSE and state

programs cannot develop an accurate picture of caseload needs for

resource planning or measure progress in serving families. For

example, simply knowing the absolute number of paternities

established in a given year does not give program managers or policy

analysts a way to measure the need for such a service.



Both OCSE and state program officials told us that statistical

analyses using the state-reported data to determine effective

practices among states would be highly flawed because of poor data

quality and inconsistent reporting. The percentage of collections

from wage withholding, for example, is significantly underreported by

one state program we visited because of limitations in its payment

processing system, according to program officials. While this

information is reported to the Congress, the state program does not

find it a key piece of information for managing its operations.

OCSE's annual reports contain numerous footnotes submitted by states

to explain year-to-year variances in their reported data; these

footnotes reveal the nature and range of problems casting doubt on

the reliability of program data. Explanations for data variances

provided in state notes include such problems as the following:



contamination of information,



lax data entry by the local office,



local failure to report data,



previous counting methodology resulting in inflated statistics, and



adjustments in reporting methods.



Cost data are also questionable because of varied state practices.

States use different methods to collect and compute expenditure data,

including caseload distribution, cost allocation, time studies, and

educated guesses. Accounts receivable reported by states differ

according to their procedures for writing off debts, including

statutes of limitations, judgment-setting practices, and public

assistance debts laws. Furthermore, states cannot accurately break

down administrative costs by service, such as establishing paternity,

locating noncustodial parents, and distributing support collections.



 OCSE HAS TRIED TO IMPROVE

 DATA AND ESTABLISH

 PERFORMANCE INDICATORS

-------------------------------------------------------- Chapter 2:3.4



Recognizing that data quality is crucial to better program

management, OCSE has made efforts to improve data quality and

establish outcome-based performance indicators; but its main effort

was suspended in late 1993 until changes to CSE as part of welfare

reform are known. OCSE's main effort in this area, Measuring

Excellence Through Statistics (METS), was implemented specifically to

improve the quality of state statistical and financial data

submissions. It involved meetings with state CSE directors and ACF

regional staff and soliciting comments from all state CSE directors.

Active from February 1992 through late 1993, METS encompassed efforts

to revise the forms and instructions states are required to use to

report program data, develop ideas for focusing the audit process on

outcomes, and develop results-oriented performance measures. As of

April 1993, most reporting definitions and procedures had been

completed, except for a definition for accounts receivable and a

procedure for counting interstate cases that would protect against

double counting. More recently, in September 1994, an OCSE official

told us that the audit staff is trying to build on the METS effort by

looking into how states interpret OCSE's data definitions as well as

evaluating state data collection systems and the quality of state

data.



 CURRENT DATA COLLECTION WILL

 NOT ADEQUATELY SUPPORT GPRA

 PERFORMANCE REPORTING

-------------------------------------------------------- Chapter 2:3.5



OCSE's current data collection from the states will not be adequate

to support GPRA's performance reporting requirements. In addition to

strategic and annual performance planning, GPRA requires annual

performance reporting starting in March 2000 on what was actually

accomplished and what goals were not met. This is a critical element

for measuring the success of the planning efforts because reporting

provides essential feedback to managers, policymakers, and the

public. Therefore, it is important that data collected regarding CSE

results be accurate. Annual planning will be more difficult if the

inaccuracies and inconsistencies of past reporting are allowed to

continue.



 FUNDING STRUCTURE NEEDS

 REEXAMINATION

---------------------------------------------------------- Chapter 2:4



Although performance-based incentive payments and funding flexibility

are consistent with GPRA's focus on encouraging results-oriented

government,\36 several problems with CSE's funding structure,

including the incentive system, warrant reexamination. In addition

to not having good data, a major problem is the weak link between

performance and incentives. Since states may use incentive payments

to fund other programs, not all states reinvest incentive payments in

the program; instead they deposit the payments in the states' general

revenue funds to be used to fund other programs. Also, states that

do reinvest the funds in CSE frequently use the payments to cover a

variety of CSE operational costs, thus reducing state investment in

CSE, rather than supplementing state investment. Welfare reform may

change this practice because some proposals include new funding

structures.



--------------------

\36 The National Performance Review led by Vice President Gore also

emphasized results-oriented government.



 INCENTIVE STRUCTURE WEAKLY

 LINKED TO PERFORMANCE

-------------------------------------------------------- Chapter 2:4.1



Despite congressional expectations, the present incentive structure

is weakly linked to performance. Since 1984, the incentive payments

have been expected to "encourage states to develop and improve

efficient, cost-effective child support programs which balance

services for AFDC and non-AFDC cases, both interstate and

intrastate."\37 But all states, regardless of their performance as

defined by collection-to-cost ratio, receive some incentive payments.

In addition, continued minimal performance will still earn a state

incentive payments. In contrast to the paternity establishment

standards, goals are not set for improvement in ratios either year to

year or over the long term. In effect, the potential of this

structure as a management tool to change state performance is

limited. OCSE has recognized the shortcomings in the existing

structure, but proposed changes have not yet been enacted.



Under the present incentives structure, all states receive incentives

of at least 6 percent of their AFDC and non-AFDC collections,

regardless of their collections-to-cost ratio. States achieving

ratios of between 1.4 and 2.8 can earn up to 10 percent of their

collections depending on their achieved ratio. As the Congressional

Research Service has observed, "under the current financing

arrangement, states can run inefficient programs and still make a

profit from the CSE program."\38



In practice, few states earn the maximum incentive payments. An

analysis of the collection-to-cost ratios for AFDC collections for

fiscal years 1986 through 1992 showed most states earned 6 to 7

percent incentive payments on AFDC collections. In addition, fewer

than five states earned the maximum of 10 percent each year. See

figure 2.1 for this distribution.



 Figure 2.1: Distribution of

 Child Support Enforcement

 Incentive Payments Based on

 AFDC Collection-to-Cost Ratio,

 Fiscal Years 1986-1992



 (See figure in printed

 edition.)



Source: OCSE annual reports.



During the same period, fiscal years 1986 through 1992, several

states earned non-AFDC incentives from 7.5 to 8.5 percent, and 6 to

18 states earned the maximum non-AFDC incentive. However, few of

these states were able to take advantage of the full incentive earned

because the dollar amount of the incentive payments is capped at an

amount equal to 115 percent of the AFDC incentive payments. See

figure 2.2 for this distribution.



 Figure 2.2: Distribution of

 Child Support Enforcement

 Incentive Payments Based on

 Non-AFDC Collection-to-Cost

 Ratio, Fiscal Years 1986-1992



 (See figure in printed

 edition.)



Source: OCSE annual reports.



Note: States may not receive the full dollar amount reflected in the

percentages because the dollar amounts are capped at 115 percent of

the AFDC incentive payments.



OCSE has recognized the limitations of the incentive payment

structure and has made two separate legislative proposals to make the

structure more performance-based. In 1991, OCSE proposed rewards for

performance in such activities as paternity establishment, order

establishment, and AFDC terminations resulting from child support

collections. It also suggested reducing incentives for

cost-effectiveness. In addition, the proposal would have required

states to reinvest the incentives in CSE. Officials at OCSE,

however, said that the proposal was not pushed because of the change

in administrations. Currently, OCSE is proposing to eliminate

incentive payments and replace the entire funding structure with a

graduated matching formula that would recognize different levels of

state program performance. Under this proposal, certain levels of

performance in at least five key areas would be rewarded with a

larger federal match: (1) paternity establishment, (2) support order

establishment, (3) the portion of child support cases in which

payments are received, (4) the amount of collections compared to

support owed, and (5) cost-effectiveness. Proposed legislative

language for this type of funding structure was incorporated in the

administration's 1994 welfare reform bill.\39



--------------------

\37 Child Support Enforcement Amendments of 1983, Committee on Ways

and Means, U.S. House of Representatives, H.R. Rep. No. 98-527,

(Nov. 10, 1983), p. 41.



\38 The Child Support Enforcement Program: Policy and Practice, U.S.

Congress, House Committee on Ways and Means, Subcommittee on Human

Resources (report prepared by the Congressional Research Service),

101st Cong., 1st sess., 1989, Committee Print WMCP 101-19.



\39 The administration's proposal is contained in H.R. 4605 and S.

2224 introduced in the 103rd Congress.



 INCENTIVE FUNDS ARE

 SOMETIMES USED TO SUPPLANT

 RATHER THAN SUPPLEMENT OTHER

 STATE CSE FUNDING

-------------------------------------------------------- Chapter 2:4.2



Although many states do use at least some portion of the incentive

payments to fund their CSE programs, the funds are sometimes used as

part of the state match for federal funds rather than supplementing

the state CSE budget and further expanding the program. In 1991,

HHS' Office of Inspector General reported that nine states had laws

or regulations that specifically mandated how incentives must be

used.\40 In those nine states, incentive payments were passed along

to local CSE operations or credited directly to the CSE program. Of

the remaining states, 36 said they directed all or some portion of

incentive payments to CSE. Those states indicated that they used

incentive payments for CSE activities, including ongoing CSE

operations, improving CSE automated systems, piloting CSE

demonstration projects, and funding additional CSE agency employees.

Ten states had used incentive payments to fund special CSE projects

such as (1) a support order review and modification demonstration,

(2) contracting with a private collection agency to pursue very

difficult cases, and (3) automation development and preparation of

cases for data entry or conversion to new systems.



Further work by the Office of Inspector General and a survey of

states conducted by Delaware found that incentive monies were used to

make up the states' share of the CSE programs' operating or

administrative costs. In a follow-up audit of nine selected states

in 1991, the Office of Inspector General found, "Federal CSE

incentives generally were used for the CSE program, reducing or

eliminating the need for state/local general funds to fulfill

matching requirements."\41 In Arizona, for example, the audit

revealed that 70 percent of the incentive payments was used to reduce

state or local program costs. The Inspector General concluded,

"[T]he primary impact of incentive payments is that state CSE

programs are funded, sometimes exclusively, by the federal government

through the federal cost share and incentives." In fiscal year 1992,

approximately 84 percent of states' total CSE administrative costs

were reimbursed by the federal government through matching funds and

incentive payments.



--------------------

\40 See Child Support Incentive Payments, HHS, Office of Inspector

General, Report #OEI-05-91-00750 (June 1991). "States" refers to the

50 states, the District of Columbia, the Commonwealth of Puerto Rico,

and the territories of Guam and the Virgin Islands.



\41 See The Use and Equity of Child Support Enforcement Incentive

Payments at Selected States, HHS, Office of Inspector General, Report

#A-09-91-00034 (Apr. 22, 1992). The nine states were Alabama,

Arizona, California, Kentucky, Michigan, New Mexico, New York,

Pennsylvania, and Washington.



 WELFARE REFORM PROPOSALS

 INCLUDE DIFFERENT FUNDING

 STRUCTURES

-------------------------------------------------------- Chapter 2:4.3



Three of the eight welfare reform proposals we reviewed would

eliminate the existing incentive payment system and allow increasing

federal match rates for different levels of performance. Under one,

for example, states could earn a 5-percent increase in the match rate

for improved performance establishing paternities and a 10-percent

increase for improved overall performance. All three proposals would

reward paternity establishment performance. In addition, one of the

three proposals would reward state compliance with program and

staffing standards. The other two propose aligning the funding

structure with overall performance in a number of key areas, not just

cost-effectiveness. Overall performance would include performance in

(1) the areas of support order establishment, (2) child support cases

in which payments are collected, (3) amount of collections compared

with support owed, and (4) cost-effectiveness, as defined by the

Secretary of HHS. By changing the funding structure to one that uses

a matching formula exclusively, these proposals may eliminate some of

the complexity in the current arrangement. The only expenditures

that would be matched with federal funds would be CSE program

expenditures. States would no longer receive incentive funds that

(1) may be reinvested in the CSE program or spent elsewhere, (2) must

be shared with local jurisdictions, and (3) are complicated to

forecast because of the effect of the cap on non-AFDC incentives.



Under all three proposals, the maximum federal matching rate a state

could achieve would be equivalent to 90 percent of the state's

costs--if that state achieved the highest level of performance.

However, it is difficult to predict if any of the three proposals

would actually increase total federal costs. We do not know how many

states, if any, will achieve maximum performance under two of the

proposals because the performance goals are not yet defined. Under

the third proposal, a state would have to establish paternity in at

least 80 percent of the cases needing paternity establishment, meet

the program standards in at least 80 percent of the cases, and comply

with staffing requirements set by the Secretary of HHS. To date,

very few states have been able to establish paternity in 80 percent

of the cases needing it, according to data reported by the states.



OCSE HAS NOT EFFECTIVELY FULFILLED

ITS ROLE OF FOSTERING STATE CSE

PROGRAM DEVELOPMENT

============================================================ Chapter 3



Although the Congress envisioned that OCSE would take an aggressive

role in ensuring that states develop strong and effective CSE

programs, OCSE has not done so. Specifically, the Congress tasked

OCSE with providing leadership, technical assistance, and standards

for the CSE program as well as monitoring state programs. But as the

program evolved, OCSE's ability to direct, assist, and communicate

with state CSE programs did not keep pace with growing requirements.

An HHS-wide reorganization left OCSE with little or no control over

HHS regional staff who deal with state CSE program staff. In

addition, its financial resources were reduced, nearly eliminating

funding for training and technical assistance contracts to the

states. Subsequently, communications between OCSE, HHS regional

staff, and state program officials deteriorated, and working

relationships became strained. On several occasions, OCSE has

finalized regulations after the statutory effective dates of the

legislated provisions, creating uncertainties for state programs.

Also, while OCSE audits--its principal tool for monitoring state

programs--have spurred state action in some cases, these audits have

focused more on compliance with administrative procedures than on

program outcomes. The audits have provided limited insight into how

state programs could achieve better program results, and have come

too late to be useful to some states. OCSE recognizes it needs to

revise its audit approach and is taking steps to do so. Program

personnel in many of the states we visited wanted more training and

technical assistance from OCSE; some of these officials also

expressed a desire to be more involved as OCSE drafts regulations.



 OCSE STAFF, FINANCIAL, AND

 TECHNICAL ASSISTANCE RESOURCES

 REDUCED

---------------------------------------------------------- Chapter 3:1



Since the mid-1980s, OCSE's ability to fulfill its mission has been

affected by an HHS-wide reorganization and workforce reductions. The

number of staff directly accountable to OCSE and OCSE's financial

resources decreased. OCSE's capacity to provide on-site technical

assistance to states, through both contracts and OCSE and regional

staff, has nearly been eliminated. All areas in OCSE, such as policy

development, program operations, and audits, experienced staff

reductions; but today, more OCSE staff remain devoted to audits than

technical assistance.



 HHS REORGANIZATION AND

 RESOURCE REDUCTIONS

-------------------------------------------------------- Chapter 3:1.1



As the result of a fiscal year 1986 HHS-wide reorganization, regional

staff devoted to CSE activities are no longer directly accountable to

OCSE but instead report to HHS regional administrators. In 1986,

OCSE was combined with five other major HHS programs, including AFDC,

into the Family Support Administration to emphasize the family. (In

1991, the Family Support Administration became the Administration for

Children and Families [ACF].) In addition to regional staff, OCSE's

budgetary and administrative functions and automated systems unit

were transferred to other Family Support Administration units. This

reorganization changed the composition of OCSE staff and the amount

of resources OCSE had at its disposal. To illustrate, in fiscal year

1986, before the reorganization, OCSE controlled 342 full-time

positions--95 in regional offices and 247 in OCSE's Washington, D.C.,

office and area audit offices located around the country. In fiscal

year 1987, however, after losing control of CSE regional office

staff, OCSE's authorized positions dropped to 151.



In addition to the loss of direct accountability from regional,

financial, and information systems staff, OCSE's staff devoted to

technical assistance, training, policy, planning, evaluation, audit,

and research and regulations\42



was also reduced. From fiscal year 1980 to 1992, OCSE staff assigned

to these activities decreased from 181 to 151. See figure 3.1. From

fiscal year 1987 to 1992, staffing of the OCSE division responsible

for training and technical assistance declined 37 percent, from 43 to

27.



 Figure 3.1: Staff Directly

 Accountable to OCSE, Fiscal

 Years 1980-1992



 (See figure in printed

 edition.)



Note: Fiscal year 1982 numbers not available.



Source: OCSE annual reports.



OCSE financial resources were also reduced beginning in the

mid-1980s. Along with the staff resources that were removed from

OCSE's control after the 1986 reorganization, OCSE's financial

resources were reduced by over 50 percent. Part of this reduction

included about $2 million in contracts for technical assistance,

publications development, data processing, and other services. From

fiscal year 1986 to 1987, these contracts declined from $5.3 million

to $3.2 million. Total financial resources under OCSE's direct

control in fiscal year 1992 were $10.4 million compared with $21.3

million in fiscal year 1986 when the regions were under OCSE's

control. See

figure 3.2.



 Figure 3.2: OCSE Financial

 Resources, Fiscal Years

 1980-1992



 (See figure in printed

 edition.)



Note: The drop in OCSE's resources from $21.3 million in FY 1986 to

$9.8 million in FY 1987 reflects an HHS reorganization during FY 1986

in which OCSE lost direct control of regional CSE staff and

headquarters financial and information systems staff.



Source: OCSE annual reports.



--------------------

\42 That is, excluding financial and information systems management,

and regional office staff transferred to other parts of ACF during

1986.



 TECHNICAL ASSISTANCE AND

 TRAINING TO STATES GREATLY

 REDUCED

-------------------------------------------------------- Chapter 3:1.2



Despite its mission to provide technical assistance to state CSE

programs, OCSE's resources for both direct and contracted work of

this kind have been reduced. Throughout the 1980s, OCSE funded

several contracts for training and technical assistance, but today

has none. Also during the 1980s, particularly the early 1980s, both

OCSE headquarters and regional staff provided extensive, direct,

on-site technical assistance to the states and conducted formal

management studies of local and state programs. Joint management

studies are no longer done and on-site technical assistance is

minimal in most regions. In fiscal year 1992, fewer than a quarter

of OCSE's staff were devoted to providing training and technical

assistance. Of OCSE's fiscal year 1992 staff of 151, 86 people, or

57 percent, were devoted to conducting compliance audits. OCSE funds

for contracted training and technical assistance have been

eliminated. OCSE officials said that in the early 1980s the office

had contracting authority for $3 million in training and technical

assistance. By fiscal year 1990, however, this had been reduced to

$1 million and by fiscal year 1993 to $300,000. OCSE officials said

they had no funds for contracted training and technical assistance in

fiscal year 1994. OCSE's total contracts for publications

development, printing, data processing, and other services, as well

as training and technical assistance, were reduced from $7.1 million

in fiscal year 1985 to $2.1 million in fiscal year 1992. At least

six technical assistance efforts funded through contracts in the

1980s are no longer funded: (1) transferring best practices; (2)

training state, local, and federal personnel; (3) assisting states in

drafting legislation; (4) providing orientation and training to state

judges and judicial and quasi-judicial staff; (5) providing links

with the legal community of court clerks, the private bar, and

prosecutors; and (6) publishing educational articles.



In addition, in the first half of the 1980s, when HHS regional

offices were still directly in the chain of command to OCSE, they

provided extensive on-site technical assistance to state programs;

they no longer do. They conducted formal management studies of local

and state programs, sponsored conferences for judges, and met with

and testified before state legislative committees. Regional staff

also made presentations before public interest groups; state and

local officials, including legislators, court personnel, judges,

attorneys, and child support administrators; and others; and

participated in educational panels. They also helped write

television and radio public service announcements, assisted in

drafting state legislation, and appeared on television and radio talk

shows. At the time of our review, most HHS regions were providing

minimal on-site technical assistance to states.



OCSE and regional office staff jointly conducted comprehensive

management reviews of state programs and provided on-site technical

assistance during the early 1980s. Today, OCSE staff's technical

assistance efforts are limited primarily to participating in national

conferences, distributing pamphlets and self-help guides, writing

letters, making telephone calls, and posting information on

electronic bulletin boards. In fiscal year 1981, OCSE's program

operations division performed 14 management reviews; whereas in

fiscal year 1993, OCSE officials said they no longer do management

reviews.



The OCSE division director responsible for technical assistance told

us the small staff and travel budget devoted to technical assistance

severely limits their ability to compile and disseminate best

practices and provide direct on-site training and assistance to state

programs. In February 1993, 25 OCSE staff were devoted to training

and technical assistance. At the same time, the travel budget for

these staff was limited to $10,000. The OCSE official said that

staff responsible for technical assistance are able to meet with

regional offices only once a year; they have monthly telephone

conference calls in lieu of more frequent personal contact.



 HHS CURRENT ORGANIZATION FOR

 CSE HAS NOT BEEN THE MOST

 EFFECTIVE

---------------------------------------------------------- Chapter 3:2



The current organization of CSE responsibilities within HHS has not

been the most effective for providing program leadership. OCSE's

ability to communicate, direct, and assist state programs is limited.

For example, OCSE has no direct control over HHS regional resources

for CSE, has no process for feedback from the regions on CSE work,

and receives no definite up-front commitment of regional office

resources to CSE. Furthermore, state CSE programs must deal with

several points of contact at the federal level. Under this

organization, misunderstandings and miscommunications of program

policy and requirements have occurred between states, HHS regional

offices, and OCSE.



 REGIONAL OFFICE CSE

 RESOURCES NOT ACCOUNTABLE TO

 OCSE

-------------------------------------------------------- Chapter 3:2.1



OCSE has no direct control over CSE regional resources and no formal

process for feedback from the regions. Before the 1986

reorganization that created the Family Support Administration (which

later became ACF), regional CSE staff were directly accountable to

OCSE.\43 Under the current organization structure, all regional staff

report to regional administrators for ACF. These administrators must

balance resources among all ACF programs, including CSE, to meet

mandated ACF program requirements. However, there is no process for

getting firm, up-front regional office commitment of resources to the

CSE program--OCSE can only set priorities for areas of state programs

to be examined by regions.



In addition, there is no formal process for regional office feedback

to OCSE on the results of their expenditure of resources on CSE.

ACF's director of regional operations staff officials told us that it

was impossible to determine the dollars and staff time spent by the

HHS regional offices for CSE state technical assistance, training, or

program reviews because of the intermingling of funds that occurred

after the 1986 reorganization. Also, OCSE officials did not know if

certain regional efforts cited in ACF's strategic plan for

performance by regions were accomplished; they said the regions had

not reported on them. For example, the plan stated that regions were

going to develop joint plans with states to increase AFDC recovery

and the number of paying cases, but OCSE did not know what had been

done.



--------------------

\43 The April 1991 reorganization combined the Family Support

Adminstration, HHS' Office of Human Development Services and the

Maternal and Child Health block grant programs administered by the

Public Health Service into ACF, where OCSE remains today.



 SEVERAL POINTS OF CONTACT

 FOR STATES

-------------------------------------------------------- Chapter 3:2.2



HHS' organization of CSE responsibilities affects communication with

state programs. Currently, states must deal with at least five

different HHS units for their CSE programs as illustrated in figure

3.3. An HHS regional official said it is confusing for the states to

be dealing sometimes directly with OCSE for some things and other

times with the regions. The nature of these contacts is summarized

in table 3.1.



 Figure 3.3: HHS Points of

 Contact for State CSE Programs



 (See figure in printed

 edition.)



Note: Highlighted boxes show states' points of contact within HHS.



 Table 3.1



 HHS Points of Contact for State CSE

 Programs



HHS organizational

unit Nature of contact

-------------------- ------------------------------------

OCSE, Washington, Federal tax refund intercepts;

D.C. checks of Internal Revenue Service

 information; federal parent locator

 service; requests for waivers of

 program requirements; and

 verification of social security

 numbers with the Social Security

 Administration



HHS regional offices State plan submission and approval;

 exemption requests; required data-

 reporting reviews; and financial

 systems reviews



ACF Office of Matters concerning certification of

Information Systems child support computer management

and Management, information systems

Washington, D.C.



OCSE area audit Compliance audit scheduling and

offices and issues

Washington, D.C.



HHS Office of Independent investigations of the

Inspector General CSE program

----------------------------------------------------------



 POOR COMMUNICATION BETWEEN

 OCSE, STATES, AND REGIONS

-------------------------------------------------------- Chapter 3:2.3



The HHS reorganization placing CSE regional office staff in a

different chain of command rather than having them report to OCSE

impaired CSE communications between OCSE, the regions, and the

states. An HHS regional CSE official said the added layers of

bureaucracy impeded communication with states and their communication

with OCSE. Similarly, OCSE officials confirmed there have been

communication breakdowns with the regions. They said that regional

staff have misconstrued information and communicated inaccurate

information to the states.



States have complained of vague and inconsistent policy

interpretations from OCSE and HHS regions. One state CSE director

described communication channels as "convoluted layers," similar to a

"black hole" where things just "disappear." In addition, state

representatives testified in 1991 before the congressionally

established Commission on Interstate Child Support that CSE policy

was often interpreted differently by HHS regional offices and OCSE

auditors.\44



During our visits to eight states in summer 1993, program officials

in one state cited OCSE guidance about the requirement to review and

adjust support orders every 3 years as an example of unclear and

untimely communication. Though the required implementation deadline

was October 1993, these state officials were not clear what date

should be used as the base date for the 3-year review cycle in

situations in which families go off AFDC and later go back on. They

could not discern from the regulations which of at least three

possible dates could start the review cycle: (1) the date the family

first went on AFDC, (2) the date the family went off AFDC, or (3) the

date the family went back on AFDC.



--------------------

\44 Supporting Our Children: A Blueprint for Reform, U.S.

Commission on Interstate Child Support (Washington, D.C.: Government

Printing Office, 1992), p. 249. The Commission was charged by

statute to make recommendations on improvements to the interstate

establishment and enforcement of child support awards.



 WORKING RELATIONSHIPS STRAINED

---------------------------------------------------------- Chapter 3:3



Working relationships between state programs and OCSE and HHS regions

have been more adversarial than cooperative. State officials cite

the need for more technical assistance and timely regulations from

OCSE rather than policing of processes. According to state

officials, the untimeliness of regulations has made it more difficult

for them to comply with the law. In some cases, the late issuance of

regulations caused them to go back to their legislature to request

additional legislative changes. State officials also want more input

into regulations development.



 STATES WANT MORE TECHNICAL

 ASSISTANCE

-------------------------------------------------------- Chapter 3:3.1



Many state officials we talked with want more technical and training

assistance from OCSE and HHS regions, like that done in the past.

State officials want more nationwide training from OCSE and help in

developing their own training capabilities. They believe the HHS

regional offices need to be more proactive in sharing information

with the states and helping states provide additional support to one

another.



 SOME STATES AND HHS REGIONAL

 STAFF TRYING NEW MODEL FOR

 COOPERATIVE TECHNICAL

 ASSISTANCE

-------------------------------------------------------- Chapter 3:3.2



In the face of diminished OCSE resources for technical assistance,

states in two federal regions are developing model approaches to

providing technical assistance and training.\45 States in one region

have established a steering committee composed of the chief executive

officers of states' human service agencies and the ACF regional

administrator. The ultimate goal is better coordination of human

services. Under the steering committee, four work groups address (1)

child support enforcement, (2) welfare reform, (3) child welfare

services, and (4) administration and organizational issues. The

child support enforcement work group is focusing on common training

needs and federal-state communication.



In another region, state child support training coordinators are

forming a regional training network. The idea originated during a

national training conference in 1991. The group plans to share

materials, attend each others' training sessions, develop training

packages for line workers, and serve as consultants to each other and

to their CSE directors.



--------------------

\45 The regions are Region VII and X. Region VII is Iowa, Kansas,

Missouri, and Nebraska. Region X is Washington, Oregon, Idaho, and

Alaska.



 UNTIMELY REGULATIONS MAKE

 STATES' IMPLEMENTATION MORE

 DIFFICULT

-------------------------------------------------------- Chapter 3:3.3



Some officials from the states we visited complained that OCSE's late

issuance of federal regulations made it difficult for them to pass

required state legislation and comply with the law in time and

damaged the program's credibility with state legislatures. As shown

in table 3.2, for example, final regulations implementing

requirements in the 1988 amendments for wage withholding on

delinquent non-AFDC cases and all new or modified CSE cases were

issued in July 1992, almost 1-1/2 years after the November 1990

statutory effective date.



 Table 3.2



 Statutory Effective Dates and Dates of

 Final Regulations for Selected CSE

 Program Requirements



 Statutory Dates of

 effective final

Program requirement dates regulations

---------------------------- -------------- ------------

Wage withholding on November 1990 July 1992

delinquent non-AFDC cases

and all new or modified IV-

D cases\a



Presumptive state October 1989 May 1991

guidelines\b



Medical support in all August 1984 September

orders\c 1988

----------------------------------------------------------

\a Wage withholding is a procedure by which automatic deductions are

made from wages or income to pay a debt such as child support. It

may be voluntary or involuntary.



\b Presumptive guidelines are a standard method for setting child

support orders based on the income of the parent(s) and other

factors. Child support orders set according to the guidelines are

presumed to be correct. Judges and others must use the state

guidelines or demonstrate that the application of the guidelines

would be unjust or inappropriate in a particular case.



\c Medical support includes (1) legal provision for payment of

medical and dental bills or (2) access to the noncustodial parent's

medical insurance or (3) both.



In the absence of federal regulations, states are left to interpret

laws on their own. When regulations are issued later, they may have

provisions in them that make state law incorrect or otherwise require

state CSE program officials to go back to their legislatures for

changes. In 1989, at the time of proposed regulations governing use

of presumptive state guidelines, OCSE proposed additional

requirements only 1 month before the statutory effective date--long

after such requirements should have been known. State officials

complained that some requirements would cause undue burden on those

who had taken steps in good faith to achieve compliance but now would

be out of compliance.



Even when OCSE has responded to legislation by issuing regulations

promptly, state officials often find themselves having to address

later revisions. For example, regulations establishing time frames

for distribution of support in interstate cases were required by

statute to be issued by August 1989 and were, but OCSE made

significant modifications--in essence finalized the

regulations--almost 2 years later in May 1991.



 SOME STATES WANT A MORE

 COLLABORATIVE APPROACH TO

 DEVELOPING REGULATIONS

-------------------------------------------------------- Chapter 3:3.4



Some program officials in the states we visited suggested a new

approach to developing regulations in which OCSE would solicit more

involvement from states earlier in the process. Some believed that

OCSE does not get enough state input before proposing regulations or

does not adequately respond to state comments on the impact of

implementing new policies and proposed regulations. These officials

believed the approach currently used for developing federal

regulations provides for state comments too late and does not

encourage a federal-state dialogue. They would like to see states

involved before proposed regulations are drafted, when OCSE is

wrestling with the issues. One program official suggested an

alternative approach in which OCSE would identify issue areas and use

HHS regional CSE specialists to discuss the issues with the states

and collect ideas from the states for OCSE. Program officials in

other states believed this approach would allow states to participate

in the process well before the regulations are drafted and public

comments are solicited. They also believed this approach would save

time by reducing state comments later, after the draft regulations

are published.\46



--------------------

\46 What the states suggested is essentially similar to "regulatory

negotiation" recommended by the Administrative Conference of the U.S.

in 1982 and 1985. The conference noted that "bringing interested

parties together in a cooperative setting at the front end of the

rulemaking process . . . has the capacity to reduce the likelihood

of litigation, to produce faster and less costly rulemaking--and to

create objectively better rules." David M. Pritzker and Deborah S.

Dalton, Negotiated Rulemaking Sourcebook, Office of the Chairman,

Administrative Conference of the United States (Washington, D.C.:

Jan. 1990).



 AUDITS PROVIDE LIMITED INSIGHT

 INTO PROGRAM OUTCOMES, BUT

 STILL SPUR STATE ACTIONS

---------------------------------------------------------- Chapter 3:4



OCSE compliance audits as presently structured provide only a partial

picture of state performance. The audits provide little insight into

ultimate case outcomes and the extent to which the actions taken have

been productive. The audits focus on compliance with federal

requirements for written procedures and service delivery and thus

highlight what state programs have not done, rather than what state

programs have accomplished and what methods have been particularly

successful. In addition, audits are untimely with final formal audit

reports sometimes issued a full 2 years after the period of

performance audited. Although state officials complained that audits

are too late to be a useful management tool for them, they

acknowledged that the audits and the threat of penalties have helped

their programs get state legislative attention and resources. To

ensure compliance with OCSE regulations for program standards in

anticipation of audits and to improve program management, some states

are developing internal auditing and monitoring capabilities. OCSE

is attempting to make the audits more outcome-focused and timely.



 AUDITS ASSESS COMPLIANCE

 WITH ADMINISTRATIVE

 PROCEDURES MORE THAN

 OUTCOMES

-------------------------------------------------------- Chapter 3:4.1



Despite congressional pressure to measure states' program

effectiveness, OCSE has continued to rely on an audit approach that

has over 50 compliance criteria and three performance indicators to

judge program effectiveness. The performance indicators are limited

to measuring three outcomes: AFDC and non-AFDC collections-to-cost

ratios and AFDC recovery rates; they do not address other CSE

functions such as paternity and order establishment. The compliance

criteria include 29 criteria with numerous subcriteria for auditing

state compliance with federal requirements for certain procedures,

such as written procedures for publicizing the availability of

support enforcement services. In addition, there are 23 criteria

with numerous subcriteria for ensuring that states are providing

child support services in accordance with their approved state plans.



In the past, OCSE has considered an effective state program one that

is in substantial compliance with both aspects of the audit:

performance indicators and compliance criteria. To determine

substantial compliance with the performance indicators, the level of

state performance reached in each of the three performance indicators

is assigned a numerical score. A state's combined score must equal

or exceed 70 for substantial compliance. To determine substantial

compliance with the criteria, OCSE auditors examine state written

procedures to determine whether they (1) comply with federal laws and

regulations and (2) are used in 75 percent of the cases sampled. In

addition, each sampled case may be audited for more than one

criterion. For example, a case may be reviewed for its compliance

with both location and paternity establishment criteria.

Furthermore, a case may fail one criterion but pass another, and thus

be counted as deficient in one instance and acceptable in

another--regardless of the case's ultimate outcome.



OCSE believes that this audit approach is performance-based. In

addition, OCSE believes the audits provide clear indicators of state

program performance because they highlight what services were not

provided by states during the audited period. However, determining

compliance--the extent to which procedures are in place and actions

are taken on cases--does not include an assessment of the

effectiveness of the states' procedures in achieving the desired

outcomes such as paternity and support order establishment. In

addition, while many states have failed the compliance criteria, only

3 states have also failed to achieve a score of at least 70 on the

performance indicators since fiscal year 1986. Therefore, audit

results present a limited view of state performance.



 AUDITS TOO LATE TO BE USEFUL

-------------------------------------------------------- Chapter 3:4.2



The usefulness of compliance audits for judging state performance is

also limited because they are not done in a timely fashion. In some

instances, final formal audit reports were issued 2 years after the

period of performance audited. In addition, OCSE has yet to audit

state implementation of the Family Support Act of 1988 because the

audit regulations are not yet final.



State officials, HHS regional staff, and advocates shared the view

that the audits' usefulness is limited. State officials expressed

confusion over the timing and purpose of the audits and believed that

penalties were often applicable to past conditions that no longer

exist. In addition, some HHS regional CSE specialists told us the

audit reports are too late to be useful to the states.



 STATES SAY AUDITS PROVIDE

 SOME IMPETUS FOR CHANGE

-------------------------------------------------------- Chapter 3:4.3



Although state officials complained about the utility and timing of

compliance audits, some acknowledged positive effects from audits.

Program officials acknowledged that audits and penalties or the

threat of penalties\47 have helped their programs get state

legislative attention and resources. With the attention of their

legislatures, states were able to make a number of legislative,

procedural, and system changes to correct deficiencies and hire

additional staff. In addition, some states said the audits were

useful in getting offices to use the administrative process.



--------------------

\47 Approximately $21 million in audit penalties have been assessed

Ohio, New Mexico, Arizona, Mississippi, the District of Columbia,

Guam, the Virgin Islands, and Puerto Rico as a result of OCSE

compliance audits since 1975.



 SOME STATES HAVE DEVELOPED

 THEIR OWN PROGRAM MONITORING

 STRATEGIES

-------------------------------------------------------- Chapter 3:4.4



Some states have developed their own internal audit procedures and

monitoring systems to ensure compliance with federal standards and

provide more timely performance evaluation for program management.

Although OCSE is not yet auditing state programs for requirements of

the 1988 amendments, some states are auditing themselves against

these requirements. OCSE considers a number of state efforts

exemplary and highlighted seven states' internal monitoring programs

in an information memorandum to all states in early 1993. In

addition, our review of eight states identified some additional

efforts.



In California, for example, county performance is reviewed annually,

feedback from state evaluators is described as immediate, and

follow-up on corrective action plans for noncompliance is quarterly.

California formed a separate unit that does the reviews in 21 small

counties. That unit also validates reviews done in 37 larger

counties by local staff who are trained by the state in the review

methodology and funded by the state. Several counties have

incorporated software in their case management systems for tracking

time frames, which has helped the state prepare for statewide

automation by increasing the uniformity of case management throughout

the state. An analysis of the review efforts showed marked

improvement in county compliance with federal program operation

standards.



In another state, Delaware, the quality control system that has been

developed evaluates not only the performance of the CSE agency but

also that of the Delaware Family Court. An automated sampling

process ensures that cases selected had activity in the specified

program area being examined during the specified time period.



 OCSE IS TRYING TO CHANGE ITS

 AUDIT PROCESS

-------------------------------------------------------- Chapter 3:4.5



Over the last few years, OCSE has been trying to change the audit

process, and its officials are on record that the audits need to be

more outcome-oriented. Working with state CSE program directors and

the National Governors' Association, OCSE has been exploring ways to

make the audits more outcome-oriented and has taken both a regulatory

and legislative approach to effect a change.



In September 1993, OCSE published proposed revisions to existing

audit regulations that officials did not believe required any

statutory changes. In the proposed approach, achievement of desired

case outcomes in sampled cases would take priority over compliance

with process and time frames in determining substantial compliance.

If a desired outcome, such as paternity establishment, was achieved

in a case during the time period audited, the case would be

considered compliant; deviations from the process or time frames

leading to that outcome would not be counted as noncompliant. If a

desired outcome was not achieved, then the case would have to meet

process and time frame criteria.



The proposed regulations, however, would not add new performance

indicators or revise the current indicators that are limited to

cost-effectiveness and AFDC recovery. OCSE has chosen to delay

revisions to the performance indicators until more refined indicators

can be devised and states have had sufficient time to implement the

new standards.



While the proposed audit regulations would reduce some requirements,

they would add others, making their net effects on audit timeliness

difficult to predict. Although the proposed audit regulations

combine and consolidate current criteria, they would add many

significant criteria to allow the auditing of compliance with

provisions of the 1988 amendments. The proposed regulations narrow

the focus of audits to 14 of 52 existing criteria. These 14 criteria

reflect service areas that at least 10 percent of the states have

failed in the past. However, all of at least 17 additional criteria

(with numerous subcriteria) would be audited for compliance with the

1988 amendments. Moreover, the substantial compliance standards for

maintenance of records and case closure would be raised from 75

percent to 90 percent of cases sampled.



While the revised audit regulations have not been finalized, OCSE

officials have decided that further changes need to be made to the

audit process to focus more on outcomes and less on detailed process

requirements. To do this, however, OCSE officials believe that the

statutory mandate for comprehensive audits must be changed. Proposed

legislative language effecting this change was incorporated in the

administration's welfare reform proposal. Pending further

legislative action, OCSE has suspended its scheduled compliance

audits for 1994. Instead, audit staff are evaluating state data

collection and reporting systems as noted earlier in chapter 2.



 PROPOSED WELFARE REFORMS WOULD

 PLACE GREATER DEMANDS ON OCSE

---------------------------------------------------------- Chapter 3:5



While the federal CSE role varied among the eight welfare reform

proposals we reviewed, all would give some new responsibilities to

OCSE,\48 but few would add resources for technical assistance or

change the audit process. Under some of the proposals, OCSE would be

required to develop and coordinate new or expanded national automated

information systems. Others would require OCSE to work with the

states in such areas as training development and establishing

staffing standards. New responsibilities placed directly on the

states may also require greater technical assistance efforts and

communication by OCSE and within HHS to ensure effective state

implementation.



--------------------

\48 The proposals generally assigned the responsibilites to the

Secretary of HHS, but presumably implementation responsibility would

be delegated to OCSE.



 SOME WELFARE REFORMS PROPOSE

 LARGER COORDINATING ROLE AND

 MORE RESPONSIBILITIES FOR

 OCSE

-------------------------------------------------------- Chapter 3:5.1



A number of the proposals we reviewed would require OCSE to develop

and coordinate new or expanded automated information systems, develop

a comprehensive training program for federal and state program staff,

and conduct staffing studies of each state's program. Four of the

proposals, for example, would direct OCSE to develop a national

database of all child support orders issued or enforced by state CSE

programs. Six proposals would require reporting of newly hired

employees to state or federal agencies, and one of these would also

require OCSE to maintain a database of the newly hired employees

through a modified W-4 tax withholding reporting procedure.



Also, additional responsibilities for OCSE for training and staffing

standards for state programs were included in some of the welfare

reform proposals. Two proposals specifically called for OCSE to

provide training as well as technical assistance to states. One of

these proposals would require OCSE to develop (1) a core curriculum

and training standards for state programs to follow and (2) national

training for state CSE program directors. In addition, these two

proposals would direct OCSE to conduct staffing studies in each

state, and a third would set a deadline for HHS to set staffing

requirements as already required under section 452(a)(2) of the

Social Security Act.



 NEW STATE RESPONSIBILITIES

 COULD REQUIRE MORE TECHNICAL

 ASSISTANCE AND EFFECTIVE

 COMMUNICATION FROM OCSE

-------------------------------------------------------- Chapter 3:5.2



Under many of the welfare reform proposals we reviewed, states would

also have new mandates and requirements that may require more

technical assistance and effective communication from OCSE for

implementation. For example, seven proposals would impose new

requirements affecting states' paternity establishment programs. One

called for OCSE to develop regulations for voluntary paternity

acknowledgment in nonhospital settings. Another would give state CSE

programs authority to determine if an AFDC applicant is cooperating

in the paternity establishment effort. However, OCSE is responsible

for developing the standards state programs must use if they believe

the custodial parent should be exempt from cooperation. In addition,

there are proposed mandates for states to establish such measures as

employee reporting, professional license suspension if child support

is delinquent, less judicial case processing, central collections and

distribution, cost-of-living adjustments in new or modified child

support orders, and inclusion of delinquent child support payers in

their job search and training programs for welfare recipients. While

some states are implementing some of these now, others may need

assistance from OCSE to enact and implement these requirements.



In addition, under many of the proposals, states would be required to

enhance their current systems and establish new databases. These

state efforts would require technical assistance and monitoring

activities by OCSE program staff and ACF management information

systems personnel to ensure efficient development and capacity for

linking state systems to a national system where necessary. Seven of

the proposals we reviewed, for example, would require states to

establish central or automatically linked local registries that would

have a record of all child support orders being enforced by the CSE

program. Some of these proposals would require all child support

orders issued in the state to be included.



 SPECIFIC FUNDING SCHEME

 PROPOSED FOR TECHNICAL

 ASSISTANCE

-------------------------------------------------------- Chapter 3:5.3



One proposal included a provision for a specific funding scheme for

federal activities assisting state programs. Under this proposal,

funds from the federal portion of recovered AFDC payments would be

used to fund a wide range of activities. Among these activities

would be information dissemination, technical assistance, training of

state and federal staff, and operation of the federal databases

containing child support orders and employee information.



 AUDITS TARGETED FOR CHANGE

 UNDER SOME WELFARE REFORM

 PROPOSALS

-------------------------------------------------------- Chapter 3:5.4



OCSE would be required under three of the welfare reform proposals to

change the audit process to different degrees. One proposal

specified the process be streamlined to (1) be less burdensome on

states in substantial compliance, (2) produce more timely analysis of

states not in substantial compliance, and (3) possibly shift

resources to providing technical assistance. Another proposal

required OCSE to create, after a year of study, a new process--with

new criteria, standards, and reporting--that emphasizes outcomes.



Finally, a third proposal would make the most specific and immediate

changes. This proposal would require (1) all states to have an

annual monitoring and reporting capability that meets OCSE standards

and (2) OCSE to change the focus of its audits to verifying state

data, data systems, and financial management. Since this proposal

would also change the incentive structure to reward states for

achieving certain levels of performance in key areas, such as

paternity and order establishment, data verification performed by the

audits would be critical to the accuracy of performance assessment

and incentive adjustments. This proposal incorporates the statutory

change desired by OCSE.



STATE CSE PROGRAMS USE MULTIPLE

STRATEGIES TO ADDRESS COMMON

BARRIERS TO STATE CSE EFFORTS

============================================================ Chapter 4



Despite substantial federal funding, mandates, and oversight, CSE is

still very much a state program in which state and local leadership,

operating in unique political and fiscal environments, is primarily

responsible for program performance. Our work in eight states\49 and

our past studies--and the research of others-- suggest that state

programs face common barriers hindering their CSE efforts and are at

different points in developing the specific management and

enforcement tools they need to overcome or reduce the barriers.

State programs must deal with increased caseloads; limits in their

computer systems' capacity to serve those caseloads; limited control

over local program activities; a need to garner legislative support

for new state CSE initiatives; and poor communication between CSE and

AFDC staff that impedes CSE's ability to provide services to AFDC

clients.



The states we visited had developed multiple strategies to deal with

these barriers. Over the years, all had added some staff, increased

their use of administrative rather than judicial case processing, and

developed innovative enforcement tools such as requiring employers to

report newly hired employees to a central state registry and using

state tax data to locate noncustodial parents. In addition, these

states all recognized automation as a critical tool for dealing with

a variety of barriers and were expanding their computer capacity.

State programs used a variety of techniques, such as having a

legislative liaison office, to convince state legislatures to enact

laws needed to authorize new enforcement tools. States also have

made changes to improve CSE-AFDC coordination, such as locating both

programs in the same state agency.



Table 4.1 provides an overview of the various barriers identified in

our review and the strategies state CSE programs initiated to

overcome them. As shown in the table, multiple strategies are often

used to address different barriers. Appendix III presents selected

information about the state CSE programs we visited.



 Table 4.1



 Barriers States Face and Some Strategies

 to Overcome Them



Barriers Strategies

------------------ --------------------------------------

Increasing More staff

workloads and

resource Administrative rather than judicial

constraints processes for establishment and

 enforcement of paternity and support

 orders



 Innovative practices such as new-hire

 reporting to reach difficult

 populations



 Increased use of automation



 Contracts with private collection

 firms



 Volunteers



Limited computer Enhancing existing and acquiring new

system capacity computer software and technology



Dispersed program Automation used to

control and lack

of procedural --centralize program data and

uniformity functions



 --standardize case processing

 procedures



 --monitor compliance with processing

 standards



Lack of Legislative activism and consensus-

legislative building through

support for

initiatives and --assigned staff to promote program

resources mission to legislature



 --public awareness campaigns and

 lobbying efforts emphasizing goals and

 achievements



 --communication with advocacy groups

 and others



 --improved program management and

 services



Inadequate Communication initiatives and program

communication liaisons

between AFDC and

CSE programs Mutual education and training programs

 for staff



 Staff co-location



 Revisions to intake and referral

 process

----------------------------------------------------------



--------------------

\49 Arizona, Iowa, Kentucky, Massachusetts, New York, Oregon, Texas,

and Virginia.



 EXPERIENCES OF EIGHT STATES

 ILLUSTRATE COMMON BARRIERS

 IMPEDING STATE CSE EFFORTS

---------------------------------------------------------- Chapter 4:1



To varying degrees, the eight state CSE programs we reviewed have

experienced and continue to experience common barriers. These

barriers include (1) increasingly complex and growing workloads

coupled with resource constraints, (2) limited computer system

capacity, (3) dispersed program control and lack of uniform

procedures, (4) lack of legislative support, and (5) inadequate

communication between the AFDC and CSE programs.



 STATE AND LOCAL PROGRAMS

 MUST DEAL WITH MORE

 DEMANDING WORKLOADS AND

 RESOURCE CONSTRAINTS

-------------------------------------------------------- Chapter 4:1.1



State and local CSE programs must deal with more demanding workloads

despite constrained resources. State programs are confronting (1) a

growing number of cases that more frequently need paternity

establishment, (2) increasing time-consuming interaction with

custodial parents, (3) limited ability to reach some noncustodial

parents, and (4) federal requirements for medical support enforcement

and case review and modification. At the same time, state budgets

have been seriously cut back and some states are seeking ways to

"downsize" their governments.



As a result of rising out-of-wedlock birth rates, paternity

establishment is becoming an increasingly large aspect of CSE. In

Texas, for example, as of June 1993, more than 40 percent of Texas'

total caseload needed paternity established, according to state

figures (see figure 4.1). As described in chapter 1, paternity

establishment is the first step in obtaining child support. It can

be time-consuming and involve genetic testing and judicial hearings

as well as CSE efforts to interview custodial parents and locate the

alleged fathers.



 Figure 4.1: Texas CSE Caseload

 Profile, June 1993



 (See figure in printed

 edition.)



In addition, AFDC custodial parents' reluctance to cooperate with CSE

staff has been cited by program staff across the country as

contributing to the workload difficulty. Staff in the eight states

we visited also cited contacts from increasing numbers of non-AFDC

custodial parents as part of their growing workload.



Program officials in all eight states also expressed frustration with

the difficulty of pursuing noncustodial parents who are self-employed

or change jobs frequently. CSE officials explained that the

inability to reach such parents with existing resources and

enforcement tools impeded collections and overall program

performance.



The expanding CSE program mission also increased CSE case complexity.

In addition to the traditional establishment and enforcement

services, program resources are being devoted to medical support

enforcement and review and modification of support orders. The

additional case complexity and the resources required are reflected

in the longer time it takes to train new caseworkers and bring them

up to a full-performance level. In Kentucky, officials said it takes

15 months to bring a new caseworker up to the full-performance level;

whereas, it used to take 9 months.



At the time of our visits, states were beginning to wrestle with

review and modification requirements that became effective October

13, 1993. Based on the results of state demonstrations of the review

and modification process, some state program officials anticipated

further resource shortfalls. The demonstrations revealed that the

process is very labor intensive, with two states estimating the need

for 11 to 13 percent more staff to meet the requirements. One

researcher noted that review and modification "can require

considerable persistence to obtain accurate income information from

parents, perform one or more guideline calculations, try to obtain an

order agreeable to both parties, and prepare the case for court if

necessary. In addition, part of the workload burden derives from the

specifications of the Family Support Act, which imposes a complex

scheme of notices and timeframes."\50



Although staffing levels have increased over time for all the states

we reviewed, program personnel told us that the programs were still

understaffed relative to caseload size and the amount of work

required for a typical child support case. Program officials'

estimates of worker caseload ranged from 300 to 2,500 cases per

worker.\51 In commenting on workload difficulties, a New York local

CSE official estimated that his office was 40 percent understaffed.

In addition, a 1992 Arizona Auditor General report noted that

staffing levels were inadequate to address rapidly growing caseloads.

Telephone inquiries alone can consume staff time. State officials in

Iowa and Texas, for example, reported that centrally located

operators handle an average of 7,000 and 31,000 calls a month,

respectively. These calls are in addition to the calls made to those

states' automated inquiry systems and do not include the number of

calls handled directly by field staff.



Although CSE programs have received substantial federal funding and

state funding increases over the years, they have not always escaped

budget cuts. The Iowa program, for example, experienced a reduced

legislative appropriation in 1991 along with all other state

agencies. A number of CSE officials in the states we visited

expressed concern that state funding for the program remains

insufficient and resources are thinly spread.



--------------------

\50 Robert G. Williams, Ph.D., President, Policy Studies, Inc., in

testimony before the Subcommittee on Human Resources, Committee on

Ways and Means, U.S. House of Representatives (Mar. 15, 1994).



\51 See Interstate Child Support: Wage Withholding Not Fulfilling

Expectations (GAO/HRD-92-65BR, Feb. 25, 1992). In a survey of 136

local CSE offices, the median estimate was 1,000 cases per worker.



 LIMITED COMPUTER SYSTEMS

 CAPACITY A BARRIER TO STATES

-------------------------------------------------------- Chapter 4:1.2



Despite nearly 15 years of 90-percent federal funding and a

requirement that CSE have statewide computer systems by October 1995,

some state CSE programs lack the systems capacity to serve growing

caseloads and address additional federal case processing

requirements. In extreme cases, such as Virginia and Kentucky in

1993, states still do not have single statewide computer systems.

Instead, they rely on multiple stand-alone systems or manual

processing to manage and track caseload actions. In Kentucky, for

example, the largest portion of the state's caseload was being

tracked by both a largely manual system in the state area office and

a local computer system in a corresponding county attorney's office.

Kentucky officials noted this arrangement caused duplication of

casework between state and county offices. In both Virginia and

Kentucky, multiple systems and the absence of integrated databases

make case processing and tracking more difficult and require more

manual intervention.



Oregon's CSE program was among the first to implement automated CSE

systems but now suffers from aging technology and strained capability

to carry out federally required CSE functions such as case initiation

and enforcement.\52



Oregon, although it implemented a system between 1975 and 1978, is

now in virtually the same situation as some other states developing

systems for the first time. Over the years, Oregon made incremental

enhancements to its system to handle increased caseload complexity

and federal case processing requirements. Unfortunately, these

incremental enhancements have strained the system's functional and

data storage capacities. A 1991 OCSE review noted major deficiencies

and recommended Oregon replace its current system.



Automated systems in Massachusetts and Iowa also continue to have

limitations. Massachusetts, a leader in using automation to seize

noncustodial parents' bank assets, still has a limited system for

case management. The current system provides little support for case

initiation, management, and automated tracking of efforts to locate

parents, paternity establishment, and court proceedings. Caseload

intake and noncustodial parent location functions are primarily

handled manually by CSE personnel. In contrast, Iowa's automated CSE

system has extensive case tracking and reporting capabilities, but

its ability to seize bank assets is hindered by its current

automation capacity. As of June 1993, Iowa lacked the technology to

identify assets and levy administrative liens automatically. One

program official said that the ability to do a tape-to-tape match of

CSE records with self-employment tax and asset records would be an

"invaluable" enforcement tool.



--------------------

\52 Other functional requirements under federal law include case

management, financial management, security, and reporting.



 PROGRAM CONTROL IS DISPERSED

 AND UNIFORMITY IS LACKING

-------------------------------------------------------- Chapter 4:1.3



Personnel in most of the state programs we visited were frustrated

with the dispersed and variable nature of their program structure,

but not all to the same degree. Program personnel in New York,

Kentucky, and Oregon complained that multiple and autonomous

particpants (for example, judges, county attorneys, local

governments) with competing priorities prohibited centralized control

and posed a barrier to state CSE program performance. These programs

lacked uniform statewide procedures and as a result had difficulty

implementing statewide CSE initiatives. Our previous work and the

research of others have identified dispersed program control as a

barrier to improving CSE.\53



According to one study, involvement by the courts, prosecutors,

advocacy groups, local human services agencies, and the CSE agency

itself creates a complex interplay of competing traditions and values

likely to have a limiting effect on the local implementation of any

reform effort.\54



In a state where county governments exercise significant control of

program operations, the New York CSE program has experienced

difficulties providing program direction and implementing statewide

practices. Clients obtain CSE services through 58 Department of

Social Services district offices. In the districts, local

commissioners control program operations and have considerable

autonomy in determining local management philosophies, organizational

structure, and case processing procedures and priorities that often

conflict with the state CSE program's initiatives. State reviews of

district offices from 1982 to 1992 also documented that local

districts have failed to implement state procedures and staffing

recommendations and fully utilize the automated information system,

among other issues.



Kentucky has experienced similar difficulties managing the program as

a result of fragmented authority and court and county attorney

involvement. In certain places, judges use their own individualized

procedures rather than following uniform state procedures. As a

result, the state procedures manual is replete with different

procedures required in different counties. Some judges, for example,

will not honor support orders from other counties within the state

when the custodial parent lives in their jurisdiction; they establish

new orders and will not collect arrears under orders from other

counties within the state.



Even states with greater centralized program control, such as

Massachusetts, Virginia, Iowa, and Texas, have had some difficulty

implementing uniform procedures despite having direct control over

caseworkers and legal staff in local offices. While lines of

authority are more clearly defined and initiatives are more easily

coordinated from the program's headquarters, control and uniformity

issues do arise primarily in relation to the courts.



--------------------

\53 GAO/HRD-87-37, Apr. 30, 1987.



\54 Charles F. Adams, Jr., David Landsbergen, and Larry Cobler,

"Welfare Reform and Paternity Establishment: A Social Experiment,"

Journal of Policy Analysis and Management, Vol. 11, No. 4, (1992),

p. 667.



 LACK OF LEGISLATIVE SUPPORT

 AFFECTS STATE PROGRAMS'

 ABILITY TO IMPLEMENT

 INITIATIVES

-------------------------------------------------------- Chapter 4:1.4



Despite successful efforts in some states, many CSE programs have

experienced legislative opposition to proposed initiatives over the

last decade. Some state programs we visited tried but were unable to

obtain legislative support to implement new processes and tools. In

at least two cases, however, legislative support was withheld because

of historically poor program management.



Examples from the eight state programs we visited illustrate the

importance of legislative support to adopting practices considered

innovative by program officials. In 1993, the Massachusetts

legislature failed to support the CSE program's proposal for certain

administrative enforcement techniques opposed by the courts and

interest groups. The proposal called for implementing in-hospital

paternity establishment, administrative order establishment, and

administrative review and modification of orders. While in-hospital

paternity establishment passed, other elements did not. The CSE

director explained that the legislature was not convinced that

administrative processes would be more efficient than judicial

processes. In addition, the legislature was concerned that due

process rights would not be protected if the courts were not involved

in all child support matters.



CSE officials in other states we visited told us legislatures had

been reluctant to approve additional enforcement tools. In New York,

past proposals for new-hire reporting and driver and professional

license revocation authority failed because of the legislature's

concern that the measures would hurt business. Iowa's CSE program

has also been unable to obtain legislative support for a central lien

index that would allow the program to quickly identify property held

by noncustodial parents and place liens on it. Real estate

professionals strongly opposed the measure.



 INADEQUATE COMMUNICATION

 BETWEEN AFDC AND CSE RESULTS

 IN BACKLOGS AND DELAYS

-------------------------------------------------------- Chapter 4:1.5



Inadequate communication has resulted in incomplete AFDC referrals to

CSE programs and contributed to caseload backlogs and processing

delays. Communication between AFDC and CSE is important because CSE

relies on AFDC staff to conduct initial intake interviews and obtain

noncustodial parent information. Over the years, ineffective

communication between the two programs has been cited by OCSE and

other studies as a barrier to performance. In addition, in our 1987

report we found that poor coordination between welfare and CSE

agencies resulted in inadequate information about noncustodial

parents, including identity, location, and earnings data.\55 The

experiences of the state programs we reviewed suggest that very

little has changed.



CSE personnel in the states we visited cited problems with the

interaction between AFDC and CSE. Referrals from the AFDC program

frequently lacked information CSE staff needed to do their work,

either because the AFDC staff did not collect the information or the

parent did not provide it. AFDC personnel appeared to be reluctant

to penalize AFDC recipients who did not cooperate in providing needed

information. As a result of incomplete referrals, CSE workers spent

time and resources tracking down additional information,

reinterviewing clients, and providing services to clients unwilling

to identify the absent parent.



--------------------

\55 GAO/HRD-87-37, Apr. 30, 1987.



 SOME STATES HAVE DEVELOPED

 SUCCESSFUL STRATEGIES TO

 ADDRESS PROGRAM BARRIERS

---------------------------------------------------------- Chapter 4:2



The eight state CSE programs we visited have implemented or are in

the process of implementing many strategies to reduce or eliminate

program barriers. The design, implementation, and success of some of

the common strategies reflect the political and fiscal environment

and CSE program history in each of the states.



Multiple strategies are directed at growing workload size and

complexity. These strategies include hiring more staff and

increasing the use of (1) administrative rather than judicial

processes, (2) innovative enforcement techniques, (3) automation, and

(4) contracts with the private sector. In addition, one state is

making extensive use of volunteers to extend staff resources. Some

of these strategies, such as increased automation and private

contracting, are also helping to improve program control and

uniformity within state programs. Because automation is recognized

as a critical tool for dealing with a variety of problems, all the

states we visited are enhancing their automated capabilities. In

addition, some state programs are actively working with their state

legislatures and others, such as judges and county officials, to

build consensus for initiatives and legislative support. Some state

programs have also found ways to improve communication with the AFDC

program.



Although opportunities exist for all states to implement these

approaches, we found that some state programs demonstrated more

initiative than others in such areas as legislative activism.

However, we also saw instances where legislative activism was not

completely successful. In addition, most of the barriers have not

been completely eliminated and will continue to require extensive

state effort.



 MULTIPLE STRATEGIES HELP

 STATES ADDRESS WORKLOADS AND

 SUPPLEMENT LIMITED RESOURCES

-------------------------------------------------------- Chapter 4:2.1



No single strategy is used to meet the demands of a growing workload.

Despite limited resources, all CSE programs we reviewed have added

some staff over the years. They have also increased their reliance

on administrative processes, innovative enforcement tools, and

automation to address growing and more complex caseloads. In

addition, some of the programs have engaged the private sector to

extend staff resources through contracts with collection agencies and

volunteer recruitment.



 SOME STATE PROGRAMS HAVE

 HIRED MORE STAFF

------------------------------------------------------ Chapter 4:2.1.1



Most state programs we visited have been moderately successful in

adding staff over the years, although some have experienced staff

cuts and hiring freezes as well. In Texas, for example, as its CSE

caseload tripled between 1984 and 1992, program personnel more than

tripled. Massachusetts' CSE program recently raised its staffing

level approximately 25 percent. The Kentucky program also

experienced two large increases of 30 percent and more in 1979 and

1989, but more recently, staffing was cut in 1992 and 1993 by 6 and 7

percent, respectively.



 ADMINISTRATIVE PROCESSES

 ALLOW GREATER EFFICIENCY

------------------------------------------------------ Chapter 4:2.1.2



In most of the states we visited that have implemented administrative

alternatives to court processing for such actions as paternity

establishment, order establishment, and review and modification, CSE

personnel believe the administrative process has added or will add to

their programs' efficiency. However, the type and extent of

administrative processes used in these states vary.



State program personnel in some of the states we visited believed

that administrative processes have reduced court involvement, created

greater procedural uniformity, and allowed CSE programs to serve

increasing workloads more efficiently. Iowa, for example, has had

extensive administrative procedures for years and continues to add to

them. The Iowa CSE program expanded its administrative means for

paternity establishment because program officials believed it would

make the process faster and cheaper by reducing the amount of

attorney and court time. In addition, Iowa is implementing an

administrative process for the review and modification of support

awards to more efficiently meet federal time frames for review and

modification of support orders.



In contrast, the Texas program has traditionally relied on the

judicial process for order establishment and enforcement. In the

past few years, however, as court backlogs have grown, it has added

administrative alternatives. Texas is now implementing an

administrative process for order establishment that relies on a

mediation conference with the parents instead of a court hearing to

set the award amount. In promoting this approach to the Texas state

legislature, program personnel estimated that more than 50 percent of

the caseload could be resolved using the administrative process.



 INNOVATIVE ENFORCEMENT

 TOOLS AND APPROACHES

 EXTEND PROGRAM'S REACH

------------------------------------------------------ Chapter 4:2.1.3



The eight states we visited are using innovative enforcement tools to

extend their CSE programs' reach in locating noncustodial parents or

their assets or to create greater incentives to pay support. These

tools include requiring employer reporting of newly hired employees,

using state tax data to locate noncustodial parents, and requiring

noncustodial parents who do not pay child support to perform

community service or revoking their professionl, trade, or driver's

licenses.



Like several other states around the country, Massachusetts, Iowa,

Oregon, and Virginia have implemented mandatory employer reporting of

newly hired employees for a number of industries and professions.

The Texas legislature also recently approved new-hire reporting.

Texas employers, however, are not required to participate but are

encouraged to volunteer.



To reach self-employed noncustodial parents and nonwage income,

Iowa's legislature authorized its CSE program and Department of

Revenue and Finance in 1993 to implement a tax record matching

procedure to identify self-employed individuals with child support

obligations. Self-employed noncustodial parents with delinquent

child support obligations are sent a notice on Department of Revenue

and Finance letterhead requiring the payment of child support and the

quarterly submission of a state estimated tax form. For individuals

who do not comply, CSE tries to identify interest- bearing assets

from the tax return and attempt garnishment.



Iowa's CSE program has also obtained legislative authority to order

noncustodial parents who claim they are unemployed to seek

employment. Failure to seek employment can serve as evidence to the

court in determining a willful failure to pay. Iowa has also given

the courts the power to impose community service as an alternative

sentence for contempt of court or failure to pay child support.



Other practices that program officials believe will enhance

collections include revocation or suspension of professional

licenses. Arizona and Oregon are among at least 18 states that have

obtained authority to revoke or block renewal of professional

licenses.



 AUTOMATION INCREASES

 EFFICIENCY

------------------------------------------------------ Chapter 4:2.1.4



CSE officials in the states we visited commonly noted that a greater

reliance on automated enforcement and parent-locating tools has

allowed their programs to do more work with fewer staff and

resources. In general, all eight states have expanded their use of

automation for case processing and asset attachment and are making a

considerable number of collections through automated wage withholding

and interception of other income such as unemployment benefits and

tax refunds. In New York, for example, automated enforcement

techniques produce an estimated 75 percent of total collections.



Since 1992, Massachusetts has begun to automate a number of

innovative enforcement tools. Accordingly, the CSE program

implemented a "Mass Enforcement" initiative that focuses on cases

with the greatest potential for collections and uses computerized

file matches to identify employment and asset information.



Increased automation has helped to free up line staff from

administrative duties and allow them to do more casework. For

example, staff from some states said that innovations such as

computerized voice-activated response systems using "800" numbers

have allowed them to spend more time working cases and less time

responding to simple telephone inquiries about payments. Iowa

program officials said they were able to reduce their central payment

inquiry staff from 14 to 8 as the result of a voice-activated

response system that informs callers when a payment has been received

by the state.



 CONTRACTING WITH THE

 PRIVATE SECTOR EXTENDS

 LIMITED STAFF RESOURCES

------------------------------------------------------ Chapter 4:2.1.5



Contracting with private sector companies extends limited state

program staff in a variety of ways, although not all the states we

reviewed are using contractors. New York, for example, is

contracting with a vendor for centralized collections and payment

processing. Previously, payments were made and processed at 58

district offices throughout the state. The state estimates that a

privately operated centralized collections process will save the

program between $5 million and $6 million a year.



Increased workloads and resource considerations have also caused

Massachusetts, Texas, and Virginia to contract for collection

services. Massachusetts contracts with two private companies to make

collections on a small number of difficult cases. Texas started

using a private contractor in 1993 to supplement staff resources.

The contractor is expected to pursue collections on cases that are at

least 6 months delinquent and have arrears of $150 or more. Virginia

also relies on a contractor to make collections, but only in AFDC

cases in arrears, which represent about 5 percent of the program's

total caseload. Virginia recently created two additional district

offices, expanding from 19 to 21, by using a private firm to run all

operations of the new offices. This contract has allowed the

Virginia program to expand services geographically while staying

within its state-mandated staffing levels.



 VOLUNTEERS AND WELFARE

 TRAINEES ENHANCE STAFF

 RESOURCES

------------------------------------------------------ Chapter 4:2.1.6



One state--Texas--supplements staff resources with volunteers,

including student interns and trainees referred by the AFDC program.

These unpaid staff answer telephones, file, and perform other office

duties. In Texas' fiscal year 1993, volunteer staff put in 130,000

hours in field operations and on special projects. The volunteers'

field office hours represented approximately one full-time equivalent

in each of the 58 field offices. The volunteer program director

estimated that in addition to the office hours, field office

volunteers made 225 community presentations about CSE, including the

responsibilities of parenthood and paternity, that reached

approximately 175,000 people. HHS' Regional Office VI is very

supportive of the volunteer program and has approved federal matching

funds for computer equipment used by volunteers.



 STATES ARE IMPROVING

 AUTOMATION CAPACITY

-------------------------------------------------------- Chapter 4:2.2



All state CSE programs are planning and developing statewide systems

to meet federal certification requirements by October 1995. For some

states, like Oregon and Texas, this has meant abandoning old,

patched-together systems in favor of entirely new systems. As a

result of a 1991 OCSE review that noted deficiencies in Oregon's

current system, state officials decided to identify, transfer, adapt,

and implement an automated system that was already implemented in

another state.



In addition, some states, like Arizona, are implementing statewide

computer systems for the first time. In December 1992, Arizona

implemented a new computer system that has increased capacity.

According to Arizona officials, more than 300,000 cases are now in a

centralized database. The new system has allowed the program to

implement automated tax intercepts, credit bureau reporting, and

lottery intercepts. The system also has an improved location

capacity because of additional connections with other computer data

systems. Arizona CSE personnel said the computer system helped them

monitor the stages of each case better and had improved automated

interfaces.



 AUTOMATION AIDS CENTRALIZING

 PROGRAM CONTROL AND

 UNIFORMITY

-------------------------------------------------------- Chapter 4:2.3



Automation has helped some states centralize program control, ensure

uniformity in procedures, and centralize a number of CSE functions.

In general, the strategy has been to automate more processes and

transfer control from local offices to the central CSE administration

in the state.



At the time of our review, New York was beginning to use automation

and a private contractor to transfer collection processing from the

58 district offices to the state office. With centralized

collections, payments from noncustodial parents are received at one

central location, posted by the system, and distributed automatically

to the custodial parents. Before this initiative, the collection

process was primarily manual and controlled by local Department of

Social Services offices throughout the state. New York has also used

automation to centralize many other functions, including lottery

intercepts, tax intercepts, administrative penalties for nonpayment,

and document generation.



Iowa provides another example of standardization through automation.

The Iowa CSE director said automation has given the program a single

process for handling cases and that staff no longer have a choice of

how to proceed with actions such as order establishment. In

addition, the program's case tracking system allows the CSE program

to centrally monitor and document case actions in terms of federal

case processing time frames. Reports showing case actions that are

not in compliance with the time frames are shared with staff at all

levels.



 LEGISLATIVE ACTIVISM USED TO

 GARNER SUPPORT FOR PROGRAMS

-------------------------------------------------------- Chapter 4:2.4



The CSE programs we visited have used a variety of techniques to

increase legislative support. These techniques include legislative

liaisons, public awareness campaigns, lobbying efforts, consensus

building among stakeholders, and other initiatives to improve

internal management and case processes. In many instances, such

efforts have resulted in additional program resources, authority to

implement innovative practices, and greater program control. These

efforts, however, have not always been successful. Some state

programs continue to have difficulties obtaining necessary

legislative support.



In Texas during the 1993 legislative session, senior program

officials, in addition to the program's legislative liaison, lobbied

the state legislature and made compromises in wording and procedures

to institute an administrative process. This lobbying effort

included an orientation session for all legislators and staff at the

start of the session. During the orientation, CSE staff explained

the CSE program and what kind of assistance the program can give

legislators responding to constituent inquiries. CSE convinced the

legislature that the judicial process took longer than necessary and

kept the program from achieving its potential.



The Texas CSE program also uses other measures to reach legislators,

judges, and county officials to build program credibility and a

consensus for action. The program is required by law to report back

to the legislature on program outputs and outcomes. This requirement

has helped keep the legislature informed about the effectiveness of

CSE initiatives. In addition, units of the CSE litigation division

work with judges on standardizing court procedures and processes to

improve CSE and establishing case law with carefully selected cases.

The CSE director and staff also work with county law enforcement and

judicial officials to identify program improvements.



The Massachusetts CSE program has taken several actions to obtain

legislative support for its initiatives, and program officials

believe this support has allowed the program to become one of the

most aggressive in the country. The program has a legislative

liaison who meets regularly with each member of the legislature and a

cadre of key supporters to discuss upcoming legislation. In

addition, the liaison generates statistical packages highlighting

program impacts for the legislature. To improve program credibility,

the Massachusetts CSE program also sponsors public service

announcements and holds press conferences to publicize collections

figures. The program also publishes a "10 Most Wanted List" of

nonpaying noncustodial parents and other pamphlets.



As a result of its efforts to gain the legislature's support, the

Massachusetts CSE program has had more successes than failures.

Successful legislative initiatives have included (1) a statute that

requires all employers to report new hires within 14 days of starting

employment; (2) an administrative lien provision that creates a child

support lien when a child support order is due and unpaid; (3)

voluntary paternity acknowledgment; (4) authority to enforce

court-ordered health insurance provisions by directly contacting the

employer or insurance providers; and (5) access to employment,

utility, and licensing records to locate noncustodial parents.

However, the CSE program has been unable to get its entire package of

legislative initiatives, which include administrative processes for

new and modified orders, passed in the legislature.



 ACTIONS TAKEN TO IMPROVE

 COMMUNICATION BETWEEN CSE

 AND AFDC

-------------------------------------------------------- Chapter 4:2.5



Although problems remain, the state CSE programs we visited have

implemented initiatives to improve communication with AFDC. Some

approaches are aimed at improving the referral process, while others

have focused on improving cooperation through procedural revisions,

education programs for welfare and child support personnel, and other

more innovative techniques.



Oregon appears to have been more successful than the other states in

confronting and reducing this particular barrier to performance.

Oregon CSE officials voiced a positive view about the program's

relationship with the AFDC program and staff and attributed this view

to several factors. The CSE director believed that good

communication was due, in part, to both CSE and AFDC having the same

oversight agency and a single computer system. In addition, past

problems with referral data had been corrected through education and

refinement of AFDC intake documentation. The CSE program developed a

training program for AFDC staff on how to enter information necessary

and useful to CSE efforts directly onto the computer system. The CSE

and AFDC programs also refined the AFDC intake document to obtain

child support information. These efforts reduced the amount of

information AFDC staff were required to get from clients for CSE

purposes and improved cooperation between the programs.



Some of the other states we visited are looking at ways to improve

the quality of data from the AFDC intake process and to better

communication at senior management levels in each program. For

example, Arizona recently conducted a study of the intake interview

and referral process and was planning to establish a pilot office in

which CSE personnel would be co-located with AFDC staff. CSE

personnel will conduct intake interviews to ensure that the necessary

information is obtained and will educate their AFDC counterparts

about appropriate information gathering approaches.



The Texas CSE program is examining the intake process in coordination

with AFDC staff and is focusing on mutual education, training

programs, and discussions with AFDC management. AFDC and CSE

management staff meet quarterly to discuss common issues and to

ensure cooperation. Program officials believe cooperation has

improved as a result of these regular meetings. In addition,

liaisons have been established for both agencies to assist personnel

throughout the state with case processing problems.



 WELFARE REFORM COULD INCREASE

 STATES' WORKLOAD BUT COULD HELP

 SOME MAKE CHANGES

---------------------------------------------------------- Chapter 4:3



All eight welfare reform proposals we reviewed contained new mandates

for state CSE programs. In some instances, these mandates would add

to the workload states are already struggling to address as well as

add more automation requirements. However, the mandates would give

some state programs the enforcement tools, such as new-hire reporting

and driver's license suspension, that they have been unable to obtain

from state legislatures. In addition, these mandates would help some

state programs achieve greater centralization and control of their

operations.



 WELFARE REFORM COULD

 INTENSIFY SOME BARRIERS

 STATES ARE FACING

-------------------------------------------------------- Chapter 4:3.1



All the welfare reform proposals we reviewed would expand state

program responsibilities to different degrees and potentially

intensify some of the barriers states are now facing. For example,

under at least one proposal, the CSE caseload would be expanded to

include all child support orders, even those not now enforced under

the Social Security Act. While a portion of these new cases may

never need enforcement services, they would still be subject to the

requirement that all cases be automatically reviewed and considered

for modification every 3 years. In addition, three of the proposals

require state programs to make greater paternity establishment

efforts through outreach and voluntary paternity acknowledgment. Two

proposals would require state parent locator services to be used to

handle requests from noncustodial parents to locate custodial parents

for enforcement of visitation issues.



Welfare reform proposals may further strain state automated

information systems. As indicated in chapter 3, most of the

proposals would require state programs to have automated central

child support order registries or the capability to integrate local

registries. In addition, one of the proposals would require state

programs to match employer reports of new employees with the state

order registry. Another would require state programs to have

automated on-line access to information in any database maintained by

the state.



 WELFARE REFORM PROPOSALS

 PROVIDE NEW ENFORCEMENT

 TOOLS FOR SOME STATE

 PROGRAMS AND REQUIRE GREATER

 CENTRALIZATION

-------------------------------------------------------- Chapter 4:3.2



The welfare reform proposals we reviewed would provide new

enforcement tools to some states and require greater centralization

of operations for some as well. For example, seven proposals would

require employers to report new hires either to a state or federal

unit that then makes the information available to all states. In

addition, two proposals require states to set up central collection

and disbursement agencies to handle all child support payments

throughout the state. Furthermore, one proposal offers additional

federal funding as an incentive to centralize all of CSE under one

state-controlled organization. Also, two proposals provide for

driver's license suspensions.



CONCLUSIONS AND RECOMMENDATIONS

============================================================ Chapter 5



The history of the CSE program is one of progressively expanded

responsibilities. Despite annual federal and state funding of nearly

$2 billion, the CSE program is struggling to keep up with the needs

of an ever-expanding constituency of welfare, working poor, and

middle income families. Given nationwide trends toward increasing

numbers of out-of-wedlock births, federal and state governments are

likely to continue to face many challenges in managing their

programs. In addition, welfare reform proposals we reviewed suggest

that OCSE and the states may be tasked with greater responsibilities

in the near future.



To date, OCSE has been less than effective in the leadership role the

Congress envisioned when it established the national CSE program. As

program mission and caseload have expanded over time, OCSE has

continued to lack some important management tools, including a

clearly articulated program mission, programwide planning and

goal-setting, and a means to measure progress toward goals. At

present, OCSE does not have accurate and consistent data on state

program performance. OCSE needs such data if it is to assess program

performance and take action to improve it. OCSE will also need these

data if it is to successfully implement the management reforms

required under GPRA. OCSE's ability to lead effectively would also

be helped by a funding structure that is better aligned with the

current realities of CSE's mission and that could help promote

service improvement at the state and local levels. In addition,

OCSE's working relationships with state programs in recent years have

been characterized as more adversarial than cooperative.

Miscommunications between OCSE, HHS regional staff, and state program

staff over CSE policy interpretation and other matters have fueled

states' dissatisfaction. HHS' current organizational structure,

which divides CSE responsibilities between OCSE staff and HHS

regional staff not accountable to OCSE management, bears some

responsibility for these ongoing difficulties in the federal-state

partnership that is at the core of the CSE program.



OCSE's audits of state programs are perhaps its most important

management tool, and some state program staff said that OCSE audits

had spurred state action. But the audits have focused on monitoring

state compliance with federally prescribed administrative procedures.

As a result, the audits give OCSE and state program directors limited

insight into the ultimate outcomes of program activities, such as

whether paternities were established, noncustodial parents located,

and collections achieved. OCSE is aware of the audits' limitations

and has taken some actions to change the audits. Our work confirms

and reinforces a need to reengineer OCSE audits. Such a

reengineering could not only help federal-state program relations but

also serve as a means for OCSE and state program staff to obtain

accurate and consistent performance data--key management data that

could help OCSE and states as they seek to better serve the families

that depend on CSE efforts.



In this chapter, we make some specific recommendations. We believe

implementing GPRA's management reforms may help OCSE improve its own

program management as well as serve states better. But whether

through GPRA implementation or through other means, some rethinking

of federal management tools, processes, and relations with state CSE

programs is needed if the issues we have identified are to be

addressed. We recognize that the CSE program faces many difficult

tasks and that even given optimum CSE program management, some

noncustodial parents may never be located and others may never be

able to pay support. But continued and strengthened efforts by OCSE

and states would seem virtually certain to help some families. Such

efforts are all the more important if OCSE is to be given new

authorities and responsibilities under welfare reform.



 GPRA CAN HELP OCSE DEVELOP

 NEEDED MANAGEMENT TOOLS

---------------------------------------------------------- Chapter 5:1



As a result of the GPRA mandate and OCSE's pilot project status, OCSE

is beginning to build a planning and measurement discipline that

focuses on outcomes. Such a process should enable OCSE to better (1)

communicate program expectations, (2) identify the tasks needed to

accomplish the outcomes, (3) identify the data needed to assess

accomplishments, and (4) use the information from performance

assessment for policy decisions and plan revisions. OCSE's actions

to date show promise, but we believe some of the issues we have

identified remain to be addressed.



As of September 1994, OCSE had developed a draft strategic plan that

exceeds what GPRA requires and had avoided repeating some past

planning weaknesses. To develop the plan, OCSE has sought comments

and involvement from key stakeholders such as the regional HHS CSE

personnel and state program representatives. In addition, OCSE had

defined a program mission, vision, and two general goals with

objectives and many quantitative performance indicators for each

goal. The draft mission statement affirms the broad scope and

expanded mission the program has assumed over the years. The goals

focus on paternity and order establishment in support of this broad

mission, and the objectives and performance indicators specifically

address outcomes not only for collections but for noncollection

activities such as medical support enforcement as well.



Articulating the broadness of the mission and establishing outcomes

should help to clarify the program's mission among the stakeholders.

In addition, through a welfare reform proposal, OCSE is attempting to

align the existing funding structure and audit approach with the

broad mission OCSE has defined. Such an alignment is important for

stakeholders to clearly understand program priorities. In addition

to the strategic plan, OCSE has also developed an annual performance

plan as required by GPRA. According to GPRA, the annual plan is

intended to provide a direct link between the program's longer-term

goals and what state programs and OCSE's managers and staff will need

to accomplish each year.



Setting demanding but realistic long-term and annual measurable

outcomes for the national program and for state programs will be

challenging. The variation among states in adopting innovative

practices, such as voluntary paternity acknowledgment and early

employer reporting of newly hired employees, suggests a need for OCSE

to work with each state program individually to set goals that

require continuous improvement from year to year. One way to do this

would be for OCSE and states to set goals that reflect and build on

past state performance, similar to the approach used for the

paternity establishment standards. We believe that an

individualized, cooperative, goal-setting effort would encourage

greater state responsibility and accountability for achieving the

goals and the data used to measure performance. A cooperative

process would seem more likely to promote such accountability than

having OCSE or the Congress imposing annual goals on state programs.



OCSE's planning efforts, however, will need to address some of the

issues we have raised in this report, including data quality and

OCSE's own outcome goals. Improving data quality is essential if

OCSE and the states are to achieve effective annual performance

reporting and OCSE has taken some preliminary steps toward this end.

However, OCSE needs to define data definitions and set standards to

promote consistent data reporting. Building on initial efforts to

clarify definitions and obtain consistent state reporting, OCSE

officials said OCSE audit staff are currently investigating (1) data

definitions used by states, (2) state data collection systems, and

(3) state data quality. However, these officials did not have a plan

or timetable for the completion of this effort. Furthermore, once

measurable outcome goals have been established for the program, OCSE

and the state programs will need to identify the key data needed for

annual performance reporting and develop the necessary definitions.

Data quality, however, relies heavily on state program efforts.

States will thus need to assume greater accountability for the

quality of data they submit.



Another important issue for OCSE to consider is its own performance

as both a partner with and manager of state program efforts. While

OCSE has expressed an intention to assess its processes for serving

the states, it has yet to set goals for itself regarding the future

timeliness of regulations, responsiveness to states about audits and

policy questions, and regional HHS office commitment and feedback.

Given the failure of OCSE's past planning efforts to focus on

outcomes, measurement, and continuous improvement, we believe OCSE

will need to address these issues in future planning.



 FUNDING STRUCTURE SHOULD BE

 REDESIGNED

---------------------------------------------------------- Chapter 5:2



Our work identified several problems with the current program funding

structure that, taken together, suggest that the funding structure

should be redesigned. The current incentive payment structure has

not been aligned with the expanding CSE mission. Furthermore, it

does not meaningfully encourage continuous improvement, nor does it

provide for the cost sharing between state and federal governments

originally envisioned for the program. Instead, the incentive

payments make it possible for states to shift most, if not all,

program costs to the federal government.



If incentive payments are to promote better state performance, we

believe they need to be aligned with performance expectations as

defined in the mission priorities and goals established in the

strategic plan. For example, if such a plan recognizes a broader CSE

mission and includes measurable outcome goals for collection and

noncollection results, such as paternity and order establishment and

medical support enforcement, then the incentive payment structure

should be used to reward state improvements and maintenance of the

highest level of performance in these areas. We endorse the concept

of performance-based funding embodied in the incentive payments and

believe this concept should be retained in the redesigned structure.



 THE FEDERAL-STATE PARTNERSHIP

 NEEDS TO BE REINVENTED

---------------------------------------------------------- Chapter 5:3



OCSE should continue to work with states to find new ways to

strengthen the federal-state partnership that is at the core of the

CSE program. New ways to deliver technical assistance and training,

as well as new ways to develop regulations, would be important steps

to this end. In addition, long-standing communication problems

between state officials, HHS regional staff, and OCSE staff, problems

due in part to the current organizational structure, will need to be

addressed.



We encourage OCSE to explore more cooperative approaches to

developing regulations and delivering technical assistance and

training. In chapter 3, we described some initiatives states would

like to see or are trying for developing regulations and delivering

technical assistance. These may be potential models for OCSE to

consider or develop further in working with the states.



As part of reinvigorating the state-federal partnership, we believe

HHS and OCSE officials should consider alternatives to the current

federal organizational structure for the CSE program, since this

structure has produced ineffective communication and accountability.

To this end, OCSE's strategic planning can help clarify OCSE's role

by establishing performance goals for the agency. As with the CSE

program, these goals should be focused, as much as possible, on

results such as more timely issuance of regulations and

responsiveness to states. The needed organizational changes,

therefore, should support not only CSE program mission priorities,

but OCSE's agency performance goals as well. In developing a better

functioning organization, we believe HHS should consider (1) what the

role of regional HHS personnel is, (2) how regional resources should

be spent on CSE, (3) what mechanisms are necessary to ensure

accountability to OCSE by regional and ACF staff outside of OCSE who

are working on CSE priorities, and (4) where federal resources should

be devoted to foster state goal achievement.



 THE AUDIT IS A CANDIDATE FOR

 REENGINEERING

---------------------------------------------------------- Chapter 5:4



Whatever changes may be made to the CSE program, we believe it is

essential that the federal government maintain a program monitoring

function to ensure that children who need financial support are being

effectively served. However, in view of the problems we and others

have identified with the program's audits, we believe, and OCSE

agrees, that the scope and approach of this monitoring function need

to be reconsidered. While the audits have spurred state action in

some cases, we believe it is time for the program audit role to be

reexamined and reengineered to provide a monitoring capability that

is not only more outcome-oriented, but supports accurate state

performance reporting as well.



Two existing conditions make this an opportune time to change the

audit approach. First, GPRA implementation demands accurate,

consistent data and assessment of progress toward stated

goals--elements the current program lacks. GPRA annual performance

reporting, therefore, should provide insights about program outcomes

that the current audit approach has been unable to provide. To

ensure these insights are based on sound data, however, the data, not

the administrative procedures, should be subject to audit. The OCSE

audit role, when placed within the GPRA framework, can be shifted

from ensuring compliance to ensuring data integrity and investigating

performance problems identified in annual performance reporting, thus

achieving a more outcome-oriented approach.



A second condition that enables serious reconsideration of the

existing audit approach is the growth of state-initiated

self-monitoring. As we noted in chapter 3, a number of states are

conducting their own program audits or evaluations using

OCSE-promulgated program standards or their own evaluation criteria.

These state program monitoring efforts can have a more timely effect

on state operations than OCSE audits and reduce the need for OCSE to

conduct the type of detailed audits of state administrative

procedures it has in the past. OCSE is currently considering ways to

use state monitoring efforts, including replacing the existing

federal audit approach with required annual state monitoring and OCSE

review of the results.



OCSE agrees that the audit needs to be reengineered but believes its

ability to make significant changes to the audit process is

constrained under current law. Existing legislation requires OCSE to

conduct periodic comprehensive audits of state programs to ensure

substantial compliance with all federal requirements.



 WELFARE REFORM PRESENTS

 OPPORTUNITIES AND ADDITIONAL

 CHALLENGES FOR CSE

---------------------------------------------------------- Chapter 5:5



Welfare reform proposals could have various effects on the CSE

program. Adding federal mandates, as reflected in the welfare reform

proposals we reviewed, may result in a more standard national CSE

program. In addition, welfare reform holds some promise for a

redesigned funding structure and audit approach. However, under

welfare reform, OCSE would likely need to assume more

responsibilities despite its limited capacity and organizational

accountability. Any reform is likely to require greater federal

leadership than has been exhibited in the past to achieve reform

goals.



While increasing requirements would challenge OCSE's leadership

capacity, some of the welfare reform proposals provide opportunities

for better alignment among stated priorities and incentive funding.

In addition, some target the audit process for change. By focusing

financial rewards on performance in critical areas in addition to

cost-effectiveness, the proposed funding structures emphasize the

importance of activities such as paternity establishment that may not

bring immediate collections. Furthermore, by focusing the audits

more on program outcomes and the quality of the data used to measure

the outcomes rather than on compliance with certain requirements,

welfare reform provides the opportunity to improve information for

future decision-making.



Many of the current proposals for welfare reform would add to OCSE's

responsibilities for providing technical assistance and training and

for monitoring state programs. As demonstrated by our findings in

this report and our earlier testimony,\56 OCSE is already struggling

with existing requirements in these critical support areas. Absent

the reengineering of some OCSE processes, such as the audit, and an

organizational structure with clear lines of authority and OCSE

accountability, welfare reform seems likely to present OCSE with

serious difficulties in achieving desired results.



In addition, new requirements in the various welfare reform proposals

would force legislative action in some states where the CSE programs

have been unable to obtain the authority to pursue certain measures.

However, the new requirements would also expand the authority and

responsibilities of state CSE programs, requiring more stringent

paternity establishment procedures, central registries, centralized

collections, and work requirements for noncustodial parents, among

others. Some of the new requirements could also add to the confusion

about CSE's mission, goals, and priorities described in chapter 2.

Given all these likely impacts of welfare reform on OCSE, it is all

the more important that changes be made to address the current lack

of alignment among stated priorities, expectations, performance

measurement, and incentive funding.



--------------------

\56 Child Support Enforcement: Federal Efforts Have Not Kept Pace

With Expanding Program (GAO/T-HEHS-94-209, July 20, 1994).



 RECOMMENDATIONS TO HHS

---------------------------------------------------------- Chapter 5:6



We recommend that the Secretary of HHS take three actions. First,

direct OCSE to address the following issues in its future planning

efforts, in conjunction with major program stakeholders such as the

Congress, state program managers, regional CSE specialists, and

appropriate advocacy groups:



individualized state performance goals based on such factors as past

state performance, demographics, and degree of automation;



data quality improvement;



funding-structure changes that will retain the current

performance-based approach but make it supportive of mission

priorities; and



methods for improving federal-state communication and working

relationships.



Second, the Secretary should direct OCSE to establish performance

goals that are linked to the fulfillment of OCSE's mission. In this

process, we believe OCSE should consider setting outcome goals, in

addition to output goals, in the areas of timely regulatory

development, clear policy direction and responsiveness to state

programs, cooperative planning, and technical assistance.



Third, the Secretary should establish an organizational structure and

reporting mechanisms for OCSE that support program priorities, set

OCSE performance goals, and provide greater federal CSE program

accountability among the regional staff and activities.



We recognize that during the 103rd Congress the Secretary sought

statutory changes to reform OCSE's audit approach and to change the

program funding structure within the context of welfare reform.

Because we believe changes to the audit approach and funding

structure are essential for the program, we recommend that the

Secretary continue to pursue the statutory initiatives to these ends,

as appropriate.



 AGENCY COMMENTS

---------------------------------------------------------- Chapter 5:7



HHS provided written comments on a draft of this report (see app.

V). HHS stated that our report was comprehensive and presented a

balanced appraisal of the CSE program's accomplishments over the past

decade. It commented, however, that the funding levels for OCSE

training and technical assistance activities in the last decade

should be depicted in the context of increasing stringency in the

federal budget for nearly all discretionary spending.



In addition, HHS stated that our recommendations were well taken.

For most of the recommendations, HHS provided additional information

about actions it has already taken or is planning that we believe are

responsive to our recommendations. However, we remain concerned that

HHS' comments do not (1) indicate that OCSE is establishing

performance goals for itself, (2) address the organizational

accountability weaknesses we have identified, and (3) specify a plan

for obtaining statutory changes for the funding structure and audit

approach.



With respect to our first recommendation regarding issues important

to OCSE's planning efforts, HHS commented that OCSE has taken or is

planning several actions that we consider responsive. It is planning

to develop individual annual performance plans with state CSE

agencies that will contain specific performance goals taking into

consideration factors we mentioned and others. In terms of improving

data quality, OCSE has recently started refining standard definitions

for data elements and plans to meet with regional and state staff to

achieve consensus on common terminology. In addition, OCSE is

seeking to improve federal-state communication and working

relationships through state visits by OCSE's deputy director and

through developing various forums for more interaction with the

states.



In response to our second recommendation regarding the establishment

of OCSE performance outcome goals that are linked to its mission,

OCSE intends to develop an internal performance plan. While HHS

provided additional information about the steps OCSE is taking to

enhance training and establish staffing standards, it did not

indicate that the performance plan will contain goals, either outcome

or output, for OCSE. We believe that such outcome goals are

essential for OCSE to (1) clarify its role and relationship to state

programs, (2) focus on results, and (3) better hold regional

resources accountable. We have clarified our recommendation to

emphasize that OCSE should establish what outcomes it wants to

accomplish with its actions.



With respect to our third recommendation on organizational structure

and reporting mechanisms, HHS described a recent reorganization, but

its comments do not indicate how this reorganization will ensure

regional office accountability for federal CSE activities. HHS

states that ACF has reorganized so that the 10 regional

administrators report directly to a new ACF Director of Regional

Operations rather than the Assistant Secretary for ACF. In addition,

an Assistant Director for Child Support Regional Operations has been

established to assist in the direction and coordination of child

support activities by the regions. HHS comments do not indicate,

however, what reporting mechanisms it will use to obtain an up-front

commitment of regional staff and travel resources to CSE and

accountability for results of CSE activities. We continue to believe

that such commitment is necessary to ensure that OCSE knows what

regional resources are devoted to CSE and how regional actions will

support OCSE's performance goals and foster state goal achievement.



Finally, HHS' comments do not specify plans for changing the audit to

make it more outcome-oriented or for reintroducing legislation to

change the program funding structure. We continue to believe that

the Secretary should pursue statutory initiatives as appropriate to

bring about needed changes. We have clarified the language of our

recommendation to this effect.



DESCRIPTIONS OF BASIC CSE SERVICES

=========================================================== Appendix I



Client intake involves opening a case record and compiling data on

the custodial family and noncustodial parent. The custodial parent

is interviewed and referral (from AFDC or other states' agencies) and

application forms are screened to determine if the information

provided is complete and accurate. Outside contacts may be necessary

to secure all needed information.



Noncustodial parent locator services include efforts at local, state,

and federal levels to identify a noncustodial parent's address,

social security number, place of employment, or the like. This might

include efforts to directly contact individuals; contacts with public

and private institutions, such as credit bureaus, state and federal

income tax agencies; and computer tape matches.



Paternity establishment is the identification of the legal father of

a child, usually through the courts or expedited through hearings in

a quasi-judicial or administrative body. Paternities are established

in either of two ways: (1) through voluntary acknowledgment by the

father or (2) if contested, through a determination based on

scientific and testimonial evidence. Initiation of the paternity

process varies depending on whether the mother is an AFDC recipient.

Mothers who receive AFDC assistance are required by law to cooperate

in locating and identifying the father of the child for whom aid is

requested. Mothers who do not receive AFDC, however, are under no

legal obligation to establish paternity and may voluntarily seek CSE

services.



Support order establishment and review and modification involves the

development of a support order that legally obliges the noncustodial

parent to pay child support and provide medical insurance coverage

when available at reasonable cost. It also involves the periodic

review and adjustment of the order at least every 3 years in AFDC

cases and upon parental request in non-AFDC cases. The CSE agency

must assist custodial parents in initiating an action in court or

through an administrative or expedited legal process that will

produce such an order. The CSE agency helps in the determination of

a child's financial needs and the extent to which the noncustodial

parent can provide financial support and medical insurance coverage.



Enforcement refers to a wide array of techniques at the disposal of

CSE agencies to enforce payment on delinquent cases or to ensure

regularity and completeness of current accounts. These techniques

include bonds and security deposits, federal and state tax

intercepts, garnishments, liens, and wage withholding, among others.



Collections processing refers to the processing, recording, and

distributing of child support collections from noncustodial parents.

On AFDC cases, if the monthly collection is insufficient to

disqualify the family from AFDC, the family receives its full monthly

AFDC grant plus the first $50 of the support payment. The remainder

of the support payment is distributed to reimburse the state and

federal governments in proportion to their assistance to the family.

On non-AFDC cases, and in AFDC cases where the family's income

including the support payment is sufficient to make it ineligible for

AFDC, support payments are paid directly to the family.



MAJOR REQUIREMENTS OF THE 1984 AND

1988 CSE AMENDMENTS

========================================================== Appendix II



 CHILD SUPPORT ENFORCEMENT

 AMENDMENTS OF 1984

-------------------------------------------------------- Appendix II:1



In the event of arrearages, automatic wage withholding for IV-D cases

and based on application in non-IV-D cases\57



"Expedited processes" to establish and enforce support

orders--defined as faster, more efficient and under which presiding

officers are not judges



Withholding of state tax refunds if parents are delinquent in support

payments



Imposition of liens against real and personal property for amounts of

overdue support



Permit establishment of paternity up to a child's 18th birthday



Security bonds required of noncustodial parents to secure overdue

support payments



Consumer credit bureaus receive upon request data on overdue support

of any noncustodial parent



Nonbinding state guidelines for child support available to judges and

other officials



Non-AFDC families charged service fees



Annual notices of support collections to AFDC recipients



Noncustodial parents may be charged late payment fees



Federal incentives to local offices



Continuation of CSE services after AFDC termination



CSE services for children in foster care cases



Enforcement of spousal support\58



CSE services publicized



Equal provision of CSE services to AFDC and non-AFDC families



Inclusion of provision for medical support in orders



Withholding federal tax refunds of non-AFDC families



Extension of Medicaid eligibility when support collections result in

termination of AFDC



--------------------

\57 IV-D cases are those enforced under Title IV-D of the Social

Security Act. Non-IV-D cases are not enforced under Title IV-D but

may apply for services other than enforcement.



\58 Enforcement of legal obligations for support of a spouse or

former spouse who is living with a child or children to whom an

individual owes child support.



 FAMILY SUPPORT ACT OF 1988

-------------------------------------------------------- Appendix II:2



Immediate wage withholding on orders: new and modified IV-D;

delinquent non-IV-D (November 1990); and all new non-IV-D (January

1994)



Recording of parents' social security numbers at children's births



Paternity establishment performance standards



State guidelines for child support as a rebuttable presumption



Periodic review of state child support guidelines



Time standards for response to requests for services



States give information to the Federal Parent Locator Service



Civil and voluntary paternity acknowlegment procedures encouraged



Extend the paternity statute of limitations up to a child's 18th

birthday



Genetic testing in contested cases



Periodic review and modification of support orders



Monthly notices of collections



Statewide automated systems



Time standards for distribution of collections



SELECTED CHARACTERISTICS OF EIGHT

STATE CSE PROGRAMS, 1992-1993

========================================================= Appendix III



 Massachusett

Characteristic Arizona Iowa Kentucky s New York Oregon Texas Virginia

------------------ ------------ ---------- ------------ ------------ ------------------ ----------------- ---------------- ------------------

Caseload 195,189 126,321 242,768 210,594 1,007,058 195,347 696,761 294,148

AFDC 100,197 60,351 141,372 140,748 510,494 105,087 353,056 150,026

Non-AFDC 94,992 65,970 101,396 69,846 496,564 90,260 343,705 144,122



Administrative expenditures (in millions)

-----------------------------------------------------------------------------------------------------------------------------------------------------

Federal share $20.9 $11.1 $21.8 $29.4 $101.1 $14.1 $66.5 $34.1

State share 8.7 5.5 9.9 14.9 50.5 7.0 32.6 15.9

Total $29.6 $16.6 $31.6 $44.3 $151.6 $21.1 $99.1 $50.0

Incentive payments $ 1.5 $ 6.6 $ 4.4 $10.2 $ 19.0 $ 4.2 $ 8.9 $ 4.7

 to states

 (estimated)

Full-time 900 346 831 831 2,979 410 2,057 935

 equivalent

 staff\a



Administration

-----------------------------------------------------------------------------------------------------------------------------------------------------

State administered X X X X X X X

County \b \c X \d

 administered



Operational organization

-----------------------------------------------------------------------------------------------------------------------------------------------------

Centralized X X AFDC X X

Decentralized X X X non-AFDC \e

Placement of CSE social social social social services social services attorney general social services

 office in state services services services revenue

 government



Predominant case process

-----------------------------------------------------------------------------------------------------------------------------------------------------

Judicial X X X non-AFDC X

Administrative X\f AFDC X

Mixed or quasi- X X

 judicial

HHS region number 9 7 4 1 2 10 6 3



Selected enforcement tools

-----------------------------------------------------------------------------------------------------------------------------------------------------

New-hire reporting no yes\g no yes no yes\h voluntary\i yes\j

License revocation yes\k no no yes\l no yes\m no no

-----------------------------------------------------------------------------------------------------------------------------------------------------

Notes: Caseload, expenditure, and staffing data reported by the

states for fiscal year 1992; other information in this table as of

June 1993 unless otherwise indicated.



Some numbers may not add to totals shown because of rounding.



\a Total number of full-time equivalent staff employed by the state

agency and any local agencies as well as the number of full-time

equivalent staff employed by an agency (public or private) working

under cooperative agreement or a purchase-of-service agreement with

the CSE agency.



\b Five of 15 programs are operated by local county attorneys under

contract with the state.



\c In all counties, many services, such as paternity and order

establishment and enforcement on cases needing paternity

establishment, are provided through county attorneys under contract.



\d Under contracts with the state CSE office, AFDC cases are handled

by branch offices of the state department of justice and non-AFDC

cases are handled by county district attorneys.



\e Payment processing is not centralized.



\f Iowa adopted administrative paternity establishment effective July

1, 1993.



\g Effective January 1, 1994.



\h Legislation passed November 1993 for a pilot project limited to

eight employment classifications through June 1995.



\i Effective September 1, 1993.



\j Effective July 1, 1993.



\k Trade, professional, sport, and business licenses.



\l Trade, professional, and driver's licenses as of August 1994.



\m Trade and business licenses.



SELECTED CSE PROGRAM REQUIREMENTS

IN EIGHT WELFARE REFORM PROPOSALS

========================================================== Appendix IV



Provision H.R. 4318 H.R. 4414 H.R. 4126 H.R. 4566 S. 2224 S. 1795 H.R. 3500 H.R. 4476

---------------------------------- ---------- ---------- -------------- ------------- ------------- ------------- ------------- -------------

Program requirement

-----------------------------------------------------------------------------------------------------------------------------------------------------

Revised audits X X X



Strengthened paternity X X X X X X X

establishment provisions



National support order registry X X X X X



National directory of newly hired X X

employees



Nationwide reporting of newly X X X X X X X

hired employees and employee

support obligations



Expanded role of Federal Parent X X X X X X X

Locator Service



Training programs X X



State program databases X X X X X X X



Expanded service population X X X X



Revised collection distribution X X X

priority



Revised funding structure X X X



State staffing studies or X X X

standards



New state authority/mandates

-----------------------------------------------------------------------------------------------------------------------------------------------------

Driver's license restrictions X X



Periodic review and modification X X

of orders



Professional license suspension X X



Support order registry X X X X X X X



Centralized collection and X X

distribution



Administrative process X X



Work by noncustodial parents X X X

-----------------------------------------------------------------------------------------------------------------------------------------------------



(See figure in printed edition.)Appendix V

COMMENTS FROM THE DEPARTMENT OF

HEALTH AND HUMAN SERVICES

========================================================== Appendix IV



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



GAO CONTACTS AND STAFF

ACKNOWLEDGMENTS

========================================================== Appendix VI



GAO CONTACTS



David P. Bixler, Assistant Director, (202) 512-7201

Sarah A. Morrison, Project Director

Cathy Pardee, Deputy Project Director, (202) 512-7237



ACKNOWLEDGMENTS



In addition to those named above, the following individuals made

important contributions to this report: Linda Baker co-authored the

report; Daniel Bertoni and Dylan Jones led the data collection in

four states and co-authored portions of the draft; Barbara Bordelon

provided guidance about GPRA implementation; Leslie Albin edited the

report; Kevin Kumanga provided guidance from past GAO work; Craig

Winslow provided legal assistance; and Dan Brier, Alice Spargo,

Gerard Grant, Harry Johnson, and George Scott provided



RELATED GAO PRODUCTS

============================================================ Chapter 1



Child Support Enforcement: Federal Efforts Have Not Kept Pace With

Expanding Program (GAO/T-HEHS-94-209, July 20, 1994).



Child Support Enforcement: Credit Bureau Reporting Shows Promise

(GAO/HEHS-94-175, June 3, 1994).



Child Support Enforcement: States Proceed With Immediate Wage

Withholding; More HHS Action Needed (GAO/HRD-93-99, June 15, 1993).



Child Support Assurance: Effect of Applying State Guidelines to

Determine Fathers' Payments (GAO/HRD-93-26, Jan. 23, 1993).



Child Support Enforcement: Timely Actions Needed to Correct System

Development Problems (GAO/IMTEC-92-46, Aug. 13, 1992).



Child Support Enforcement: Opportunity to Defray Burgeoning Federal

and State Non-AFDC Costs (GAO/HRD-92-91, June 5, 1992).



Medicaid: Ensuring That Noncustodial Parents Provide Health

Insurance Can Save Costs (GAO/HRD-92-80, June 17, 1992).



Interstate Child Support: Wage Withholding Not Fulfilling

Expectations (GAO/HRD-92-65BR, Feb. 25, 1992).



Interstate Child Support: Mothers Report Less Support From

Out-of-State Fathers (GAO/HRD-92-39-FS, Jan. 9, 1992).



Interstate Child Support: Better Information Needed on Absent

Parents for Case Pursuit (GAO/HRD-90-41, May 24, 1990).



Child Support: State Progress in Developing Automated Enforcement

Systems (GAO/HRD-89-10FS, Feb. 10, 1989).



Interstate Child Support: Case Data Limitations, Enforcement

Problems, Views on Improvements Needed (GAO/HRD-89-25, Jan. 27,

1989).



Child Support: Need to Improve Efforts to Identify Fathers and

Obtain Support Orders (GAO/HRD-87-37, Apr. 30, 1987).



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