Department of Health and Human Servces

OFFICE OF

INSPECTOR GENERAL

FOllOW-UP ON AFDC ABSENT

PARENTS

Richard P. Kusserow 
INSPECTOR GENERA 
-81270  EXECUTIVE  SUMMAR 

PURE 
This inspection was conducted to follow up on a series of 1987 studies related to 
child support enforcement for Aid to Families With Dependent Chidren (AFDC) 
cases. 
BACKGROUN 
Our prior studies found that AFDC chid support collections could be increased 
signifcantly if child support enforcement agencies (called IV-D agencies) would 
systematically review the earnings of absent parents. We found that while absent 
parents may have little or no earnngs when AFDC was established, their earnings 
did increase over time. In this study, we wanted to determne what changes had 
occurred in the cases previously studied, both in the child support being paid, and in 
the abilty of the absent parent to make child support payments. 
MEODOLOY 
We repeated our earlier methodology of tracing absent parent earngs through 
Social Security Admistration (SSA) records. We then followed up with the 
IV-D agencies who, based on our previous studies, had received employer 
identification and employer address inormation for 1 277 absent parents who had 
earned over $10,000 in 1985. We examied the IV-D records to determe whether 
AFDC payments were stil being made, what the current court order was, what 
present arrearages exist, and whether automatic wage withholdig of chid support 
was in place. 
FIINGS 
ea  ea 
le 
Mos AFDC absen paen  at  tht amun
over $10,
00 in  198 
1986 an  198 Als, moe AFDC absepn paa einn cer dth $10,00 theshold each 
year. 
for the absen 
Avemge  198ef   frm  $17,787  in  198 
$19,522 in 
age  th 
W-D  hae take actin on some of th  vi th 
Th  Ch  cases we refetrhed  to 
Ofe of  Suppo Enforcem  However  are
th st  (OCSE) in  1987 
of  AFDC cases whih need to be re-ope for pole actn
ceasess blihma, mo,  orc 
or enforce chi suport  RECOMMATIONS 
We recognize the substantive actions that the Administration for Children and 
Families (ACF) has taken in implementing the Family Support Act of 1988. These 
activities are particularly significant in their attempt to establish a more systematic 
approach to review both current and older child support cases. The IV-D agencies 
can obtain absent parent wage information from the Internal Revenue Servce (IRS) 
via Project 1099, and are required annually to query the Federal Parent Locator 
Servce for absent parent location information. However, these actions individually 
fall short of gatherig the data necessary to impose wage withholding, 
or establish 
health insurance for AFDC children who must otherwse rely on Medicaid. 
anl 
OCSE shoul peorm an  data match wi SSA 
RECOMMENDATION  1: Th 
or IRS record relyg on data sumied buy tnh   OCSE shoul reqe all 
State to partpate in the annl match  Satate . State Tpherform it own  id 
freq  th 
more  matck States peormg  own matchl ish oul be able to  all 
emplo 
absen paren wages and emploer frm relible soures  State'  record. 
This report, and prior work of the Offce of Inspector General in this area 
demonstrates the  earngs 
effectiveness of systematically trackig absent parent 
through matches with SSA records. Other records, such as IRS or State employment 
determg 
records, could be equally' usefu in  absent parent employers, wages, and 
location. 
We believe this annual data match is an additional, but signcant, tool for OCSE to 
use in conjunction with performance standards and periodic review of the adequacy 
of court orders. The performance standards and the periodic adequacy review of 
court orders may not identif all cases where AFDC absent parents have the abilty 
to signficantly contribute to the support of thier children 
receiving welfare. 
sho esnet th   agen 
OCSE  W-D  use 
RiEnCOMfMoENDrAmTION n in th ann2.l  Thm  atch to esblih, mo, an enforce cou ord 
apprpr 
in accorde wi th peorme  an th Fami 
Support Act. 
Information provided by the annual match may provide location information on 
unown. 
absent parents whose wherabouts were previously  Where this occurs, a 
support order should be established or enforced in accordance with the performance 
standards. The OCSE should issue gudance to IV-D agencies requig that 
inormation from the annual data match be considered when reviewig support 
orders in accordance with this provision. 
These recommendations further the Secretary s objective of having absent parents assume 
personal responsibilty for their children, especially for those absent parents whose 
children are receiving welfare.
 COMM 
DEPARTMAL 
The ACF concurs there is great potential for increasing child support collections by 
means of a systematic review of all cases for location and asset information. 
However, ACF does not endorse our recommendation for an annual data match 
since it goes beyond the requirements of the Family Support Act of 
1988. The 
Assistant Secretary for Planning and Evaluation questions whether the recommended 
data match would provide useful information. The Assistant Secretary for 
Management and Budget comments that without cost data and cost-effectiveness 
measures being provided, it is questionable that the earnings of AFDC absent 
parents are sufficient to make their pursuit worthwhile. 
COMM 
OIG REPONSE TO DEPARTMAL 
, we recommended an annual data match and estimated that AFDC 
In 1987 child 
support collections would be increased by $307 millon annually. The OCSE 
concurred with the need for an active, aggressive approach to increasing collections 
on AFDC cases. 
We believe an annual data match is vital to enforcing the Chid Support 
Enforcement Amendments of 1984, which requies mandatory wage withholding of 
child support where the support is at least 30 days in arrears. These amendments 
also requie child support orders provide health insurance for chidren where the 
absent parent has access to that coverage. 
The curent requirement that States make an annual attempt to locate absent 
parents through the Federal Parent Locator Servce falls short of 
gathering the data 
necessary to impose wage withholding, or to establish health insurance for AFDC 
chidren who must otherwse rely on Medicaid. We believe that an annual data 
match might replace the current requiement since it provides more inormation to 
agency. 
the 
State IV-D agencies also can access IRS data through Project 1099, which provides 
both location and wage inormation. However, this data can neither be disclosed to 
a thid par, nor be used to modif chid support cour orders. The recommended 
data match avoids these pitfalls since SSA data can be used for chid support 
enforcement puroses.

The longitudial nature of this inspection shows the value of the SSA data over time. 
dish 
The age of the data does not appear to  its use as an indicator of which 
absent parents have earned, and continue to earn at signcant levels. Further work 
can then be pursued on individual cases to obtai up to date earngs inormation. 
However, if more curren  data can be obtained instead of SSA data, we support its 
use. What is important is the tapping of all earngs data for absent parents, and
performg this fuction on a regular, routine basis.  ........................................ 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 
. ..  ..  ..  ...   ...   ...   ...   ...   ...   ...   ...   ...   ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    .....     .....     ....    ...   ...   ...   ..  ..  ..  ..  .. .  ..  ..  ..  . .. 
TABLE OF CONTENTS

PAGE 
SUMY 
EXECUTIV 
INTODUCfION . . . . . . . . 
. . . 1

Purpose 
. . . . . . . . . . . . . . . 1

Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
. . . . . . . . . . . . . . 1 
Methodology  . . . . . . . . . . . . 2 
FINDINGS  . . . . . . . . . . . . . . . . 4 
Most AFDC absent parents earng over $10 00 in 1985 earned at least 
that amount in 1986 and 1987. Also, more AFC absent parents cross 
that $10 000 threshold each year. Average earnings for these absent parents 
increased from $17 787 in 1985 to $19 522 in 1987 .................... 4

The IV-D agencies have taken action on some of the cases we referred to 
them via OCSE in 1987. However, there are numerous cases, many of them 
stil AFDC cases, which need to be re-opened for possible action to establish 
modif, or enforce child support orders  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 
RECOMMNDATIONS 
DEPARTMNTAL COMMNTS 
OIG RESPONSE TO DEPARTMNTAL COMMNTS 
APPENDICES 
Appendi A: Agency Comments on Draf Report  . . . . . . . . . . . . . . . . .. A-
Admstration for Chidren and Famiies  . . . . . . . . . . . . . . . . . . . . A-
Assistant Secretary for Plannng and Evaluation  . . . . . . . . . . . . . .. A-
Assistant Secretary for Management and Budget  . . . . . . . . . . . . . . . A-
Appendi B: Offce of Inspector General Response to 
Agency Comments

-B .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INTRODUCTION

PUROSE 
This inspection was conducted to follow up on a series of 1987 studies related to child 
support enforcement for Aid to Familes With Dependent Children (AFDC) cases. These 
studies showed that many absent parents had the financial abilty to significantly contribute 
to the support of their AFDC children. In this inspection, we wanted to determine what 
changes had occurred in the cases previously studied, both in the child support being paid 
and in the abilty of the absent parent to make child support payments. 
BACKGROUN 
Our 1987 studies found that AFDC child support collections could be increased signficantly 
if child support enforcement agencies (called IV-D agencies) would systematically review 
the earnings of absent parents. We found that while absent parents may have little or no 
earnngs when AFDC was established, their earnings did increase over time. 
60 
, we examined over 4  cases where (1) there was no support order 
In our 1987 studies
in place; or, (2) the monthly support order in place was $50 or less per child; or, (3) 
arrears existed. The IV- agency had a Social Security Number (SSN) 
for the absent 
parent in each case we reviewed.

Welfare payments had been made for at least 2 years in all of the sample 
cases. These 
were perceived to be the "hard-core" AFC cases, dicult to work, and unliely to result 
mial 
in a paying child support order, other than a  one. 
We obtained 1985 earngs data on the sample cases from the Social Security 
this to the Offce of Chid 
Admiistration (SSA), and furnshed  Support Enforcement 
(OCSE) in the Adminstration for Chdren and Familes (ACF). They in turn passed on 
this information to the IV -D agencies. Specifc employer identifcation and address were 
furnshed on all cases where the absent parent earned at least $10 00 in 1985. 
In response to these inspections, OCSE arranged for chid support agencies to access 
Internal Revenue Servce (IRS) records. The IRS data would not only 
provide earnings 
and employer data, but also furnsh a recent home address for the absent parent.  The Family Support Act of 1988 also deals with the problems raised in these 
reports by 
setting standards for paternity establishment, requiring periodic review of court orders for 
adequacy, and mandating that the withholding of child support from absent parents' wages 
be included in all new and modified court orders. States must incrementally increase their 
paternity establishments if not establishing paternities at the average level for all States. 
States must also review all AFDC cases every 3 years to determine whether the existing 
court order is appropriate with State guidelines. The OCSE has proposed regulations to 
address these requirements. 
The OCSE also issued Standards for Program Operations, (usually called performance 
standards) for IV-D agencies effective October 1990. These standards specify minimum 
, and the timeframes in which to perform these 
case actions for IV- agencies to take
actions. Some standards are for locating the absent parent, taking paternity actions once 
an absent parent has been located, establishing and enforcing support obligations, and for 
closing cases. The Federal AFDC match to States would be reduced from 1 to 5 percent 
if a State is not in substantial compliance with the performance standards. 
Prospectively, OCSE auditors will use these standards when they examine sample cases 
to determine whether reasonable efforts to locate absent parents have been made by the 
IV-D agencies. And once located, OCSE wil determine whether efforts have been made 
to establish paternity, modif low court orders, enforce existing court orders by collecting 
outstanding arrears, and establish wage withholding and medical support. The performance 
standards should also prevent cases being closed prematurely.

METHODOLOY 
We repeated our earlier methodology of tracing absent parent earnings through SSA 
records. We gathered 1986 and 1987 earnings information on the 4 637 absent parents 
earngs. 
we had previously reported on when we used their 1985  We now had earnings 
information for 1985, 1986, and 1987. 
We then followed up with the IV- agencies who, based on our previous studies, had 
received employer identifcation and employer address inormation for 1 
277 absent parents 
who had eared over $10 00 in 1985. 
We examied the IV-D records to determe whether AFDC payments were stil being 
made, what the curent court order was, what present arrearages exist, and whether 
automatic wage withholdig of chid support was in place.  Current case data was 
obtained from the 12 IV- agencies included in our earlier 
inspections. Those contacted were: Maricopa County, Arzona; Adams 
County, Colorado; 
Hartford, Connecticut; Hilsborough County, Florida; Topeka
, Kansas; Prince Georges 
County, Maryland; Hennepin County, Minnesota; Suffolk County, New York; Cuyahoga 
County, Ohio; San Antonio, Texas; Pierce County, Washington; and Dane County, 
Wisconsin.  FINDINGS

AF 
FIING  earg 
1: Most  absnt parents  AFov er $10 00 in 198 eared at least 
that amount in 198 and 198. Al, more 
absent parents cros that $10 
eargs 
theshold each year. Averae  for thes absent parents increasd from $17 787 
522 in 198. 
in 198 to $19 
Absent parents who earned over $10 000 in 1985 usually earned at least that amount in 
subsequent years. Six-two percent earned over $10,00 in all 3 years. 
00 
Seventy-five percent of those who earned over $10  earned at least that amount in 
00 
1986. Nearly 80 percent of those earning over $10, in 1986 earned at that level in 
1987. 
Large increases in earnings were enjoyed by some AFDC absent parents. Six-two showed 
gains of more than $20 00 from 1985 to 1987. Two absent parents increased their yearly 
earnings by more than $50 000 in this period. 
The following chart ilustrates the continued earning potential of this group once they 
began earning at levels above the minimum wage. Each year more of the "hard-core 
AFDC cases become cases where child support can now be collected. These are cases 
where modification of low court orders, automatic wage withholding, medical support, and 
collection of arrears can be instituted. 
Char 1
 Not only are more of these absent parents able to contribute to the support of their 
children, their abilty to pay at higher levels is also evident. The following chart 
demonstrates that more AFDC absent parents are earnng wages at higher levels each 
year. 
Char 2

MORE ABSENT PARENTS ARE

EARNING AT HIGHER LEVELS*

(1985 N-1.277;1986 N-1.349;1987 N-1. 426) 
Earnings 
over $30K  131
182 
$25-30K 
Year 
EH 
1985 
$20-25K  fZ 
1986 
1987 
$15-20K 
$10-15K 
200 300 400 
100  500  600  700 
Number of Absent Parents 
-For those earning )$10K  ........................................................""". ....................'..'.'.'..''..'.'.'.''..''..'.'.'.'.'.'..''..''..'..''..$..'.........."."..".'.''.'.''.'.''.'.''.'.''.'.''.''............
Of special concern are the 269 absent parents in the sample who earned over $25 000 in 
1987. Eighty-eight percent of them (236) had earned over $10 000 in 1985, so the IV-
agencies were aware of their earnings abilty, and the probable employer of 
these absent 
parents. These absent parents enjoyed a significant growth in their earnings from 1985 to 
1987 of almost 50 percent. The following chart ilustrates this rise. 
Cha 3

EARNINGS GROWTH 
FOR THOSE WITH INCOME OVER $25K IN 1987 
(N-269) 
35 ..............................................................................."""'''  35-,--15 ....

30 .............

286 
25........

20 .......................................................................

1985  1986  1987 
YEAR 
There are serious inequities in the payment of chid support by absent parents who earn 
over $25,00 yearly. Fifeen percent of the AFC absent parents with unodied court 
orders earned over $25 00 in 1987. The monthly cour order for this group averages $49. 
These absent parents averaged nearly $36 00 in income that year. We found a glarig
example of the imediate need to modi cour orders in one absent parent who earned 
AFC 
over $65 000 and is paying an $80 monthly support order for his  chid. 
Absent parents who earned over $25,00 in 1987 and who are in arrears owe more than 
AFC 
500 in child support on average. Fif-five percent of the  absent parents in this 
their chid support obligation. Thir
group do not have an automatic wage withholding of 
nine percent of those without wage withholding had increased their chid support debt since 
, despite their substantial earngs. 
our prior studies FIING 
2: The IV-D agencies have taen acton on socmea o f the caes we referred to 
them via OCE in 198. However, there are numerous  many of them sti 
caes, which nee to be re-opened for  to establih, mod, or enforce chid 
poible acton 
support orders. 
The following summary depicts the IV-D activity on the information furnished. 
Char 4
 PATERNI7 CAES

Paternty has been established, and child support has been ordered on 24 percent 
00 
of the cases referred where the absent parent earned over $10  in 1985. 
However, the child support ordered does not appear to be commensurate with the 
absent parent earnings. In one extreme case, an absent parent earning over $32 000 
was ordered to pay only $60 monthly child support. His child remains on AFDC. 
The absent parents' 1987 earnings in these paternity establishment cases averaged 
$16 317. Using the Wisconsin child support guidelines for one child as an example
a monthly support order corresponding to these earnings would be $231. 
contrast, the actual court orders in these cases average $182 monthly. 
Of the paternity cases that remain open at the IV-D agencies
, 31 percent are 
AFDC cases. The average 1987 absent parent earnings on the open AFDC cases 
was $19 039; the non-AFDC cases averaged $19 018. 
MODIFICATION CAES 
The IV- agencies obtained upward modifications of child support orders on 29 
percent of the cases where the absent parent earned over $10 00 in 1985.  The 
average amount of the court order on these cases more than doubled, from $84 
to $188. (We had referred cases to OCSE for absent parents with this earnings 
level and a monthly child support order of less than $50 per child. 
In spite of 
these modifications, more than half remain AFDC cases. 
The increased court orders stil did not keep pace with absent parent earnings. 
The average AFDC order increased from $84 to $167 monthly. One striking 
example of this inequity was an absent parent who earned over $30 00 in 1985 
and above that level in 1986 and 1987. His cour order did increase -but only from 
AFC 
$10 to $25 monthly for his  chid. 
cu  be 
cFIoVuen toyf  bthee  paicwiphaetrin pga itne rat yp ahteardn ity demesotanbsltirsahtieodn a pnrdo jcehcitd i nsu Appproir 1t a9w8a.r dIte dis,  wuenreo inw C uwyhaehtohgear  aCnoyu notfy t,h Oe hcioa.  
had refem to Cuog County were included in this project. 
We us the Wisnsin chd support gudelies for exmple purp sice they ar among the simplest State guidelines to 
apply. Use of other State guidelines would reult in lesr or grter month chd support obligatioDl. The Wisnsin 
us  pur. 
guidelines were als  in our original AFC chid support report for compan 
One of our sample coucnatie s, Suffolk Nev York conducted a spe project to mod cour orders in ea 1988. They 
limited their sccpae  to  where automatic wage withholding of chid support wa alrdy takig place. Twenty percent 
ocf ath e AFC  in their projec were clos as a reult of their modifcation effort. It is unknow whether any of the
in our sample were included in their project.  Significantly, on the cases that are no longer AFDC cases and a modification 
occurred, the average monthly court order rose from $85 to over 
$217. On pending 
cases where the 1987 absent parent earnings remain above $10 000, more than half 
are current AFDC cases. The average absent parent earnings increased from 
$15 862 to $19 777 for this group. Increasing the AFDC orders using the Wisconsin 
guidelines for these cases would raise the average monthly support payment for one 
child from $83 to $280. 
The current non-AFDC cases where no increase has taken place, show a rise in 
average earnings from $18 111 to $22 667 during this period. The average non-
AFDC order for these cases would climb from $86 to $321 for one child, if these 
court orders were modified using the Wisconsin guidelines. 
ARGE 
CASES 
The IV - D agencies have collected all the arrears on 17 percent of the cases 
identified in our earlier studies. The arrears collected in these cases averaged 
026. Additionally, arrears have decreased on another 35 percent of the cases. 
The average decrease in chid support owed in these cases has been substantial 
347 in 1987 down to $2 845 today. 
However, child support arrears have increased for 
13 percent of the absent parents 
despite their earnings increasing significantly. This group averaged $15 464 in 1985 
earnings, and owed an average of $5 66 in chid support. By 1987, their average 
earnngs had increased 26 percent to $19 492. Their arrears had risen 62 percent 
to over $9 00. One particular egregious case showed an absent parent who earned 
over $20 00 in 1985, and over $25 00 in the two subsequent years. During this 
00 
time his arrears increased by more than $7  for his two AFDC-children. 
Although he was workig in the same State where his children live, no wage 
withholding of his wages has been effected. 
mion 
The current cases with arrears total more than $5.  owed in child support. 
The AFC support stil owed on these cases is more than $4.4 milion. 
Wage withholdig of chid support is now frequently  agencies to 
used by 
collect curent support due and recover arrears. Although we did not gather 
frequency of wage withholdig data in our earlier studies, this automatic payroll 
deduction is now in place on 26 percent of the cases with arrears. 
The absent parents from whom current support is being collected by wage 
withholding have reduced their total arrears from $960 629 to $842 
284 since 1987. 
Likewise, the arrears only cases where wage withholdig is in place 
have shown a 
decrease in arrears from $111 182 to $74 519.  RECOMMENDATIONS

The IV-D agencies did take some  , modify and enforce child support 
actions to establish
AFC 
orders for  children identified in our prior studies. However, fewer than one-fourth 
referrals led to a 
of the paternity  court order, 7 of 10 cases with low orders remain 
unmodified, and only half of the arrearage referrals have resulted in lower arrears than 
3 years ago. Although these cases were perceived as the "hard-core" AFDC child support 
cases, there is now substantial evidence that many of these absent parents now, or in the 
future, will be able to signficantly contribute to their children s support. We recognize that 
paternity cannot be established on all cases, and that other absent parent familal 
obligations will mitigate against a modified court order in some cases. 
The IV-D agencies have an ongoing need to know absent parent wages and employers 
which a data match can provide. Ths information enables the IV-D agencies to enforce 
child support orders as required by the Chid Support Enforcement Amendments of 1984 
which call for imposing automatic wage withholding whenever chid support is 
in arrears 
for 30 days. Medical insurance provided by the absent parents' employer often covers 
children receiving child support. Private health insurance would eliminate costly Medicaid 
AFC 
outlays for those  children covered. 
We recognize the substantive actions that the Admnistration for Chdren and Familes 
(ACF) has taken in implementing the Family Support Act of 1988. These activities are 
particularly significant in their attempt to establish a more systematic approach to review 
both current and older child support cases. The IV-D agencies can obtain absent parent 
wage information from Internal Revenue Servce (IRS) via Project 1099, and are required 
annually to query the Federal Parent Locator Servce for absent parent location 
information. However, these actions individually fall short of gatherig the data necessary 
to impose wage withholdig, or establish health insurance for AFDC children who must 
otherwse rely on Medicaid. 
RECOMMATION  OCE  anua 
1: The  should perform an  data match with SSA 
or IR  States. The OCE 
recrds relyg on data submitted by the  should requie al 
States to pacite in the anua match unes a State perform its ow anua or more 
frequent, match State performg their ow match should be able to identi al absent 
wa 
parent  and employers from reliable source lie State' employent recrds. 
Ths report, and prior work of the OIG in this area, demonstrates the effectiveness of 
systematically trackig absent parent earnings through matches with SSA records. Other 
records, such as IRS or State employment records, could be equally useful in determng 
absent parent employers, wages, and location. 
sags 
Prior DIG studies point out the considerable  that can be achieved in tbes intance. See "Child Support 
Enforcementfird Pany Medical Liabilty," OAI-07-8-05, Septembe 1987, and "Cordination of Third Pany Liability 
Information between Chid Support Enforcement and Medicaid," OAI-0-8-0," Decmbe 1989.  We believe this annual data match is an additional, but significant tool for OCSE to use 
in conjunction with performance standards and the periodic review of adequacy of the
court orders. The data match is necessary since the performance standards and the 
periodic adequacy review of court orders may not identify all cases where the AFDC 
absent parent has the abilty to significantly contribute to the support of his children 
receiving welfare.

The annual data match should identify to IV- agencies those absent parents without 
court orders, with low court orders, or with arrears who are not having wages withheld 
automatically or who are not reducing their arrears. The IV-D agency actions required 
by the performance standards or the adequacy review would then ensue on appropriate 
warning of possible noncompliance 
cases. Inaction on these cases could serve as an early 
with the OCSE performance standards or" the Family Support Act. 
RECOMMATION 2: The OCE should ensure that IV-D agencies us inormation 
mod, 
in the anua match to establih, 
and enforce cour orders as appropriate, in 
accrdace with the performance stadads and the Fam Support Act 
The performance standards require IV- agencies to take specific actions to locate an 
absent parent in paternity cases, and to begi the legal processes to establish paternity 
after the absent parent has been located. Likewise, the performance standards also 
mandate minimum activities to enforce cases in arrears. Both tyes of cases require the 
IV-D agencies to act withi specifed timeframes dependig on the case circumstances. 
Information provided by the annual match may provide location information on absent 
unown. 
parents whose wherabouts were previously  Where this occurs, a support order 
should be established or enforced in accordance with the performance standards. The 
current requirement that States make an annual attempt to locate absent parents falls short 
of gathering the data necessary to impose wage withholdig, or establish health insurance 
for AFDC children. We believe that an annual data match might replace the current 
requirement since it provides more information to the IV-D agency. 
In addition, a key provision of the Famiy Support Act requires IV-D agencies, beginning 
AFC 
October 1993, to review all  orders every 36 months (and non-AFDC orders every 
36 months on request of either parent) and make revisions to the orders, where 
appropriate. The OCSE has proposed reguations defing this review as "an objective 
evaluation of complete, accurate, up-to-date information necessary for application of the 
State s guidelies for support.  The OCSE should issue gudance to IV- agencies 
requing that inormation from the annual data match be considered when reviewing 
support orders in accordance with this provision. 
These recommendations further the Secretary s objective of having absent parents assume 
personal responsibility  those absent parents whose children 
for their children, especially for 
are receiving welfare.
 COMM 
DEPARTMAL 
The ACF concurs there is great potential for increasing child support collections by means 
of a systematic review of all cases for location and asset information. However, ACF does 
not endorse our recommendation for an annual data match since it goes beyond the 
requirements of the Family Support Act of 1988. The Assistant Secretary for Planning and 
Evaluation questions whether the recommended data match would provide useful 
information. The Assistant Secretary for Management and Budget comments that without 
cost data and cost-effectiveness measures being provided
, it is questionable that the 
earnings of AFDC absent parents are sufcient to make their pursuit worthwhile. 
COMM 
DEPARTMAL 
OIG REPONSE TO 
In 1987, we recommended an annual data match and estimated that AFDC child support 
collections would be increased by $307 millon annually. The OCSE concurred with the 
need for an active, aggessive approach to increasing collections on AFDC cases. 
We believe an annual data match is vital to enforcing the Chid Support Enforcement 
Amendments of 1984, which requires mandatory wage withholding of child support where 
the support is at least 30  These amendments also require child support 
days in arrears. 
orders provide health insurance for children where the absent parent has 
access to that 
coverage. 
The current requirement that States make an annual attempt to locate absent parents 
through the Federal Parent Locator Servce falls short of gatherig the data necessary to 
impose wage withholdig, or to establish health insurance for AFDC children who must 
otherwse rely on Medicaid. We believe that an annual data match might replace the 
current requirement since it provides more inormation to the IV-D agency. 
State IV-D agencies also can access IRS data through Project 109, which provides both 
location and wage information. However, this data can neither be 
disclosed to a third 
part, nor be used to modify chid support cour orders. The recommended data match 
avoids these pitfalls since SSA data can be used for chid support enforcement purposes. 
The longitudial nature of this inspection shows the value of the SSA data over time. 
diish 
The age of the data does not appear to  its use as an indicator of which absent 
parents have eared, and continue to earn at signcant levels. However, if more current 
data can be obtaied instead of SSA data, we support its use. What is important is the 
tapping of all earngs data for absent parents, and performg this fuction on a reguar 
routine basis.  APPENDIX A

COMM  TI DRA 
AGENCY  ON  REORT  ~~~
" ,L&",("I' 
DEPARTMENT Of HEALTH &. HUMAN SERVICES 
AOMINISTRATION FOR CHILDREN ANti FAMILIES 
370 L' Enfanl PromenaOe, S, 
WashIngton , D.C. 204 
Date:  June ll, 1991

To:  RichArd P. Kusserow 
Inspector General

lIro1U:  JQ Anne S. BArnhart 
Assistant Secretary

for Children and F il ies 
Subj ect :  Commen  . on Oftio. of Inspector General Draft 
Report, "Follow-Up on Aroc Absent Parents"

We aqree with the casic find1ns that ther  is a qrGAt aGal of

potential fQr increasinq child sUPPQrt collections through

systematic case tollow-up to establish, upwardly modify and/or

force orders as appropriate. However, We disagree with your

specific recommen4atione requirinq mandatory annual 4atA

che. with IRS and aSA and ensuring that the, information 
rough such matches is utilized tQ e8 ab11sh, modlfy
garnered  enforce oourt or4ers. 
The Office of Child support Enforcement (OCSE) requires states

tQ utilize all po..ible resources at the Stat. and federal 
level ana move .. quiCkly a. po.sible to e.ta 
li8h ana/or

enforce order. and get in.quita le orders modified. 
e4 reiUlations prescribinq stan4ar4. fIonr  AU9us
19a9, QCS2 1.s 
program
operations which state IV-D a9 ncies must meet. .. These rules
impose requirement, and time 
frame. for takinq appropriate
aQtions, includinq locatinq ab.ent parents, .8tabliShment of

ion. 
t obliqa 
ernity and enforcement
of suppo t obligat!on..tsab11.shm enSt  tat.s  ot 
were required to meet these

standards by Oc ob. 
1, 19'0. 
Our specifio oomment. concerning the report I 
follow: .  . recommendations
.nda 
QIq R 
:l :i
erm ,

::A  :h !SA OJ: 
1n: 
Ooq 
Thi. recommendation retleot. our po.1tion that a .yatematic

r.v1.w of looation and ..s.t information .houl

b. conducted in
A  Paqe 2 - Mr. Richard Xusserow

all cases to establish an  enforce orders as well as determine

e tarqetea tor mod1fioation. 
We cannot, hQwever 
which should 

aqree with your recommendation, since i  qoes beyonQ the revia

pport 
he Family s 
and mod1ticat1on requirements speoified in 

1988.
Act  ot 
The Act specifies that State guidelines for setting child

support award amounts be used as a rebuttable presumption in

ch.ild support orders 
estaclishinq the amount of  and that these 
elines be reviewed at least every four years to ensure

their appliQ tion results in appropriate child support award

amounts. The Act a180 r$quires that State. must have & plan

icat1nq how and when child aupport oraGrs in effect in the

.viewea and adjusted. Beqinninq October 13;-
S1tat9es 9are3 to,  beS
 tates must review child: Gupport orders in AFDC IV-I: 
cases no lat.er than 3,6 months after t.h.e order., or the most 
recent review, unless review would. not b'G in the best interest 
of the child. In non-AFDC cases, state. are required to review

either parent. 
order. upon request. of  justments to order. 
are to be 1n accordance with State quid.lin.. for setting child

.uppo  t award amount..  equ1ation8 imp1ementinq 
preau  ptive quiQel1ne reFq$duerali  rements were issued May 15, 1991. 
OCSE nas expan ed the availability, scope and efticiency of

resources available to a8.1.  states in their performance of

tne functions associated with order ..tabliahment, moditication

an4 enforcement. Th... resourc.. include the Federal Parent

Locator Service (rpts) and project 1099. 
he FiLS makes it possiDle for tne States to aocess SSA and

IRS intormat1on on & weaklY ba81s 
the absent parent  (quarterly tQ= the IRS

(AP) social security number (SSN) is unknown) 
and 49 state Imployment Security Aqencies (SESAS) on a 

quarterly basis. SSA provide. e=ployer names and addresses.

requirement, 
They will not, because ot an IRS contidentiality 
prQvide wa9. data to the FPLS. Inatead, wage intormation trorn 
IRS come. through project 1099. IRS provides individuals'

return. 
name. and adgr..... from their latest tax  SESAs 
cvi4. the most ourren  employer address and quarterly wage

information. The FPLS i. currently limited to conductinq four

croe.matohe. and i. limited in the numb.  of ca... that can be

proces..d. 
Over 3 million casas were submitted to the FPLS in 
FY'9C. over 1. 
5 million ca... have been submitted to date this 
fiscal y.ar.

oes! Project 1099 provid.. the Stat.. with quarterly access to

IRS 1099 intormation, includinq AP addre.., waqe and asset

information a. weiloln a.a  employer and financial institution

a4dre.. in:Orm  over 1. 
8 million ca..s were submitted in
c over 1. 7 mill ien ca.e. 8ubmi t te4
FY , 90 .  h1. haa incre.sed 
 participate 
for the tirst two quarter. of this tiscal year. To 
A  ~~~
. j 
:,:

Page 3 - Mr. Richard Kusserow

in Proj eet 1099, the State must certify that it meets the

stringent IRS requirements regar 
information. In  inq the safeguarding of

addition, the St te must certify that the
information will not be disclosed to third parties or in

11t1qation relatinq to the establishment and enforcement of

child support oDliqations. 
For this reason, we do not mandate
uaage ot Project 1099. 
OIG Recommendation: 
The OC9E  V-D aqeD2es ue
 nf2r
pure 
ht annual mlltch:Jq elt,l;l 18J mQ 
pr1tt  ce c 
a. a  accordance with t  t. t "r
rf rm nce & andar 
and tha Fami y S  ort Ac 
OCS! Comment 
OCSE au  itors regularly review the performance of the States 
mPeetringo thie rreaquimremen.t s 
 ot  the Child Support !nforceme

Ensuring that the performance standards aspeot of the 
Act are ca 
roperly wo ld be a routine part of this

process.  rie4 out 
In addition, we are constantly aisseminatin9 information

memoranda, action transmittals
newslett.  , "Dear Collea
 e" letters,
s, ete., in an effort to provide states with as much 
information .s possible on how to pursue child eupport in the

m08t .ftective and $tt1cient way 
pO..ible. We 
will disseminate

similar information in this 

instance, when apprcpriate.

A 
 (Jl
DEPARTMENT OF HEALTH $. HUMAN SERVICES 
Ofce of 
the Secretary
.If'''''Q  Washington, DC. 20201 
Richard 
TO:  P. Kusserow 
Inspector General 
Assistant Secretary for 
FROM: 
Planning and Evaluation 
SUBJECT :  OIG Draft Report: Follow- on " Aba  aren1: 
JaC 
OEI-05-89-01270 
As requested, we have reviewed your draft report. We recommend 
that additional information be presented in the Background, 
Methodology, and Findings sections and that serious consideration

be given to revising the report recommendations.

Backaround 
Information should be added to this section which indicates that

in the period under review--1985 through 1987--many of the Child

Support Enforcement requirements discussed were not yet in

effect. 
Guidelines were not mandatory until October 1989. Use 
of wage withholding for arrears cases was not fully implemented

1988. 
in all states until FY  Periodic review and adjustment for 
1993. 
AFDC cases is not mandatory until October  While it is true 
that some states did undertake these activities prior to

implementation of the 1984 Child Support Amendments and 1988

Family Support Act, most states were not required to use these

tools or practices until the federal requirement went into

effect. 
This information would clarify why some states may not 
have followed up on all information provided to them by the 
IG' s

office. 
Methodoloq 
More detailed information is needed in this section about the

timing and flow of information from the IG' s office back to the

IV-D agencies. 
Dates need to be provided regarding when the 
information was provided and when the re-review was conducted.

Based on the information provided, it is not clear whether IV-D

agencies could have acted (or could have completed action) based

s office. It 
on the information provided by the IG' 
would also be 
hsetlaptfeuls .t o identify the "age" of the information provided to the

Although not indicated in the report, it would appear 
that the earnings and employment information may have been two to

three years old before it was provided to the state and may no

longer have been useful for follow-up purposes.

A  Page 2 - Richard P. Kusserow

Findinas 
While the first finding may be factually correct, the

presentation of the information could easily lead one to

assume that most AFDC absent fathers have substantial

income. Your data shows this is not correct. The text

should more clearly indicate that most AFDC absent parents

(about 70 percent) show no earnings reported to the SSA in

study. 
Only 17 percent of 
the three years examined in this 
the study population earned. over $10, 000 in all three years 
and even smaller percentages earned over $10, 000 in one year

or in each of two years (percentages cannot be computed from

the text). Very few, only about five percent, showed

substantial earnings gains during the period and the modal

income. 
income is substantially lower than the average 
Also, it is not clear from the findings whether the AFDC

absent fathers who did have employment for two or more years

remained at the same job and/or same location over that

period of time.

The findings regarding IV-D action on the 1, 277 AFDC absent 
parents with earnings in 1985 need to be clarified.

numer of  (paternity, 
First, the  cases in each category 
numer of 
modification, arrears) and the  cases which remain 
open as AFDC cases and non-AFDC cases need to be provided in

order to make the percentage more meaningful. 
For example, 
under the paternity section, it is not clear how many cases

cases. It 
remain open and how many of those are still AFDC 
is also not clear how many of the "referred" cases still had

referred. 
earnings by the time the cases were 
Second, use of averages can be very misleading when

ascertaining how much could be obtained in child support

collections. Some studies conducted before mandatory

quidelines went into place indicated that low-income fathers

tended to pay a higher proportion of earnings in child

support than did higher-income fathers (Sonenstein and

Calhoun, 1988 and Garfinkel and Wong, 1987). It would be

more germne to indicate what proportion of men were paying 
simulated" quideline amount. 
within $10-$15 of the " It is 
numer of states, the 
also important to note that for a 
rate" used in the child support calculation is not a flat

rate as it is in Wisconsin, but tends to decrease as income

increases. 
Third, the " 
arrears" discussion needs to indicate if all 
witholding. 
cases with earnings were amenable to wage 
Additionally, the same period of time should be used when

comparing arrears collected and not collected. It is not
 Page 3 - Richard P. Kusserow

possible to tell whether the time frame being used is 1985

1990 or 1985-1987. It is also not clear in how many cases

arrearages were building during a period when the AFDC

earnings. 
absent father had no reported 
In sum, the report should be careful not to imply that the

IV-D agencies were not responsive to the information

provided by the IG, when all the facts are not known or at

least not presented.

Recommendations 
While we agree that automated data matches can provide important

information necessary to work some cases, it would appear

unrealistic, potentially costly, and unnecessary to perform

annual data matches with SSA or IRS on every child support case

in the system. Such matches would produce a glut of information

which is out-of-date and not relevant to the next action needed

on most cases. The performance standards, which went into effect

in October of 1990, require that all cases where absent parents

cannot be located be referred to the FPLS annually to try to

obtain information sufficient to locate the absent parent. The 
other 
FPLS has access both to SSA and IRS information. For 
activities such as enforcement and establishment, the information

available through state sources, such as the Department of Motor

Vehicles or State Employment Agencies, would provide much more

information. 
relevant and up-to-date 
The recommendations should include a discussion of potential

costs and benefits of performing such extensive matches. While 
basis, 
such data matches are ursuua lly not expensive on a per case 
it seems excessive to  annual matches to locate the 2 out of 
637 absent parents who have unusually high earnings. This

comes to a hit rate of less than 1/2 of 1 percent for individuals

with incomes over $50, 000 per year and a hit rate of less than 10

percent for parents with incomes over $30, 000 per year. The cost 
Governent 
to the states and Federal  would have to be minimal or 
the increase in AFDC child support collections would choavset st.o  be

Note 
substantial in order for the benefits to exceed the 
that costs of preparing information for a data tape and of

informtion 
reviewing the  from the SSA files to determine if it 
anyting else in 
is more recent than  the file would have to be 
included in any discussion of cost.  Page 4 - Richard P. Kusserow

deleted.  audit, 
The second recommendation should be  Through the 
OCSE is already responsible for ensuring that states act in a

timely and appropriate manner to obtain information and to

orders. 
establish and enforce child support  Since it is unclear 
that the annual match information is "complete, accurate, or up-

to-date, 
" requiring its use could be counterproductive. 
245-2409. 
If you have any questions, please call Jane Baird at 
Aal 
l:? A,y

in  Gerry 
A  ...
'Clr, 
DEPARTMENT OF HEALTH II HUMAN SERVICES  Qfof the Secet 
Washington , D.C. 20201 
MEMORAUM TO TH INSPECTOR GENERA 
From  AKevins E.s Moilsey tant Secreta  fJ, 
for Manag  ent and Budget 
Subj ect: OIG Draft Report: "Follow-Up on AFDC Absent Parents, II. 
OEI-05-89-01270 
We have reviewed the draft report entitled, "Follow-Up on AFDC

" and have several concerns. 
Absent Parents These are discussed 
below: 
Cost 
We are concerned that the report does not contain cost data or

cost- all 
effectiveness measures for the annual matches in which 
participate. In 
states would be required to  the absence of such 
information, it is difficult to know if these approaches are

justified--especially for every IV-D case in the nation--or if

States. 
they are as effective as other matches available to the 
Given this, it seems questionable to require that all states

participate in 
annual matching specifically against the IRS and 
parents in 
SSA data bases, especially in light of how few absent 
AFDC cases have earnings of a magnitude to make pursuit

worthwhile. 
data 
We believe that the report should address the fact that cost 
matches. 
is not available at this time for these 
Aae of the Data

We are also concerned that the information contained in the SSA

other
and IRS data bases is relatively old compared to that  access.  in 
data bases which States can  The age of this data reduces 
its utility to IV-D agencies for locate purposes, and makes

follow-up difficult.

Compounding this problem, the OIG used 1985 data to do its 1987 
study. 
study, and data for 1986, 1987, and 1988 for its 1990 
Thus, when States received information to follodw-aupt,e .i t was

This 
already an additional two or more years out of 
numer of actions States 
appears to largely account for the low 
were able to take after receiving the data: state inaction does

not appear to be the problem. 
The report needs to clarify that
this was the case. 
Similarly, the methodology should note that 
matches for the same individual across several years were only

examined. This 
available for a small percentage of the caseload 
A  Page2 - Memorandum to the Inspector General

should be highlighted to offset the perception likely to be

obtained by the casual reader that far more absent parents have

earnings than actually do. 
This suggests, again, that matching against the SSA and IRS data

bases may be another tool for some cases, but not necessarily a

tool with universal applicability. 
Redundancy 
Third, we would note that since the original study was done, the 
Family Support Act has been passed and the Child Support

standards for Program Operations regulations publ ished. 
Under the Standards for Program Operations regulations, published

in August, 1989, all States are already required, at least

annually, to submit to the Federal Parent Locator Service (FPLS),
which includes the IRS and SSA data bases, cases in which

location is needed and for which previous attempts at location

have failed. Thus, states are already required to do some

referral to the recommended data bases, largely removing the need

to mandate a new national matching program.

Also as a result of the new law and regulations, states are now

required to review and modify child support cases on a reqular

levels. 
basis, and to use state quidelines to set support  States 
must also take appropriate actions in establishing paternity, and

locating absent parents and enforcing support orders within

specific timeframes. 
Together, we believe that the statute and 
the regulations obviate the need for the report' s second

recommendation, that OCSE ensure that IV-D agencies use

information garnered from the matches to establish, modify and

enforce court orders.  APPENDIX 

GENE  COMM 
OFFCE OF INSPECfOR  REPONSE TO AGENCY  COMM 
REONSE TO ACF 
While supporting the need for a systematic review of location and asset information 
ACF does not support t  e recommendation for an annual review since it goes 
beyond the scope of the Family Support Act of 1988. The ACF feels that access to 
this information through the Federal Parent Locator Servce (FPLS), and through 
, a way of accessing IRS information, should provide the information 
Project 1099
IV-D agencies need. 
However, both of these efforts limit the data available to IV-D agencies. The FPLS 
is limited in the total number of cases it can process, and in the number of 
crossmatches it can perform. Project 1099 puts restrictions on the use of its 
information, so its diminished value in establishing or modifyg court orders 
mitigates against its use for this purpose. 
We feel an annual data match is vital to enforcing the Child Support Enforcement 
Amendments of 1984, which requires mandatory wage withholding of child support 
where the support is at least 30 days in arrears. These amendments also provided 
that health insurance for chidren be provided where the absent parent has access to 
that coverage. The curent requiement that States make an annual attempt to locate 
absent parents falls short of gatherig the data necessary to impose wage 
withholdig, or establish health insurance for AFDC children. We believe that an 
annual data match might. replace the current requirement since it provides more 
information to the IV-D agency. 
COMM 
REONSE TO ASPE 
In order to judge whether IV-D agencies had sufcient time to take action on the 
cases provided them in 1987, the ASPE wished to know when our review took place. 
earngs 
We requested the SSA  records in 1988, with 1986 and 1987 
data then available. Our on-site review at the State IV-D agencies did 
not take place until the sumer of 1990. The IV-D agencies had at 
least 2 1/2 years to take action on the cases referred to them. 
The age of the inormation  D agencies is also questioned by ASPE. 
given to the IV-
Our view is that this follow-up report shows how extremely valuable 
this inormation is. Once absent parents reach a certain level of 
income, the tendency is to maintain that level of earngs.  The ASPE suggests that our first finding could have pointed out that 69 percent of 
the AFDC absent parents did not have income over $10 000, and that very few 
earned over $10 000 each year. 
This is not correct since we were reporting only on . "hard-core" AFDC 
cases, at least 2 years old, where there was no court order, or the 
monthly court order was $50 or less per child, or where arrears existed. 
As our initial series of studies demonstrated, these cases were not being 
pursued at all by the IV-D agencies, since they were not considered to 
be "productive" cases. 
Our intent is to demonstrate that through the use of a data match 
IV-D agencies would be able to locate those absent parents with the 
toward their AFDC children, through cash and 
abilty to contribute 
medical insurance. 
If all AFDC absent parents were included in our inspection, we would 
have expected to fid a much larger percentage of absent parents 
earning over the threshold amount. 
The ASPE suggests that the actual number of paternty, modification and arrears 
cases be provided instead of percentages. 
Some cases overlapped categories (e.g., modication and arrears), so 
the actual numbers were omitted to avoid confsion that might occur 
when the total of the individual categories would exceed the 1 277 
actual absent parents reviewed.

The ASPE comments that using averages of earngs can be misleadig in
determg 
the amount of a court order, and that in actual percentages, low-income 
fathers tended to pay more in chid support that higher income fathers. 
We used a very simple formula purely as an ilustration. We applied 
the formula only to cases where the absent parent earngs 
suggested a 
chid support order approxiately three times or greater than the 
curent order. We did not study the phenomenon of disproportionate 
percentages suggested by ASPE.  The ASPE suggests that cases in arrears where the absent parent is working may not 
be "amenable" to wage withholding. 
The Child Support Enforcement Amendments of 1984 require 
immediate wage withholding on cases where the child support is 
30 days in arrears, and make no provision for determining "amenable 
cases. 
The ASPE suggests the time frame for computing arrears was unclear. 
Chart 4 shows the actions taken on cases from the time we origially 
gathered data to our on-site review of the same cases in 
mid-1990. 
The ASPE states there is no way to tell if arrears accrued during a period when the 
absent parent had no earnngs. 
Ths study does not attempt to capture that data. 
The ASPE questions the value of pursuig these cases in this manner. 
As OCSE has shown, the age of recently-obtained SSA data is 
it coincides with the quarterly State wage inormation in 
irelevant since 
more than 80 percent of the cases. Whe we support the use of any 
complete and current data to accomplish a systematic review of chid 
support cases, there are limitations to the FPLS, IRS, and State wage 
information. We suggest the SSA data as one alternative that avoids 
the pitfalls associated with other sources. 
We have not performed a cost-benefit analysis. However, based on our 
1987 studies, we estimate that AFDC chid support collections would 
mion 
increase by more than $307  annually. Of that annual increase 
the Federal share would be $103 mion. 
The ASPE suggests delethtg the fial recommendation that calls for OCSE to 
monitor the data match though the audit process. 
We feel that when a systematic data match is 
requied for 
agencies, OCSE should have the responsibilty to ensure compliance 
and that appropriate action is taken on cases identifed. 
B - 4  COMM 
REONSE TO ASMB 
The age of the informati m given to the IV-D agencies is questioned by ASMB. 
Our view is that this follow-up report shows how extremely valuable 
this information is. Once absent parents reach a certain level of 
income, the tendency is to maintain that level. 
The ASMB comments that without cost data and cost-effectiveness measures being 
provided, it is questionable that the earnngs of AFDC absent parents are suffcient 
to make their pursuit worthwhile. 
We have not performed a cost-benefit analysis. However, based on our 
1987 studies, the annual AFDC child support collections would increase 
by more than $307 milion. Of that the Federal share would be $103 
millon. 
The ASMB feels that due to the OCSE performance standards, and the Family 
Support Act of 1988, the recommendations may be redundant. 
We feel that without an annual data match, State IV-D agencies wil 
waste valuable time pursuig location leads where there is no chance at 
all to establish, collect or modi court orders. At present, an annual 
FPLS match gives IV-D agencies a plethora of data with no way to 
judge which lead is important. 
wi 
The annual data match we propose  obtain the same location 
information for the absent parent, with the added benefit of 
distingushig which absent parent had no earngs and which one had 
00 
earned $25  annualy each of the last 3 years. 
B - 5