United States Government Accountability Office

GAO Report to the Chairman, Subcommittee 

on Human Resources, Committee on 

Ways and Means, House of 

Representatives 

CHILD SUPPORT 

ENFORCEMENT 

More Focus on Labor 

Costs and 

Administrative Cost 

Audits Could Help 

Reduce Federal 

Expenditures 

July 2006 

 

GAO-06-491 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

July 2006

CHILD SUPPORT ENFORCEMENT

More Focus on Labor Costs and 

Administrative Cost Audits Could Help 

Reduce Federal Expenditures 

Highlights of GAO-06-491, a report to the 

Chairman, Subcommittee on Human 

Resources, Committee on Ways and 

Means, House of Representatives 

Congress established federal 

standards for the child support 

enforcement program (CSE) in 

1975. State agencies administer the

program and the Office of Child

Support Enforcement (OCSE) in 

the Department of Health and 

Human Services (HHS) oversees it.

The CSE program provides several 

services, including collecting child 

support payments from 

noncustodial parents—those who 

are not the primary caregivers—

and distributing these payments to 

families. Generally, the federal 

government reimburses state

agencies 66 percent of their costs 

for administering the CSE program. 

GAO determined (1) how total net

federal expenditures for

administrative costs changed from

fiscal year 2000 to fiscal year 2004;

(2) the categories of costs that 

contributed most to administrative 

costs in recent years; and (3) steps 

state agencies have taken to 

manage costs, and steps OCSE has

taken to help state agencies and 

ensure federal funds have been

used appropriately. GAO analyzed

program data, surveyed all 54 state 

agencies and visited 6, interviewed 

program officials, and reviewed

laws, policies, and reports. 

What GAO Recommends

GAO recommends that HHS direct 

OCSE to conduct a study to 

develop staffing guidelines, direct

resources to completing more 

administrative cost audits, and

develop audit plans that consider

expenditures. HHS stated that

OCSE would consider doing a 

study, and OCSE has an audit plan. 

From fiscal year 2000 to fiscal year 2004, total net federal expenditures for 

administrative costs (the cost after deducting child support collections for 

families receiving benefits from other government programs) increased by 

about 23 percent. After adjusting for inflation, total net federal expenditures 

increased from about $2.2 billion to $2.8 billion. Also, during this period, 

collections increased by about 12 percent—from about $19 billion to $22 

billion, and the program’s cost effectiveness measure (the ratio of 

collections to total administrative expenditures) increased about 4 percent. 

Personnel costs were cited as a major contributor to federal expenditures 

for administrative costs in fiscal years 2002 to 2004 by the 49 state agencies

that responded to the relevant question in our survey. Most state agencies 

also cited as major costs cooperative agreements under which staff from 

other state agencies are paid to perform CSE program duties, automated 

data systems, and contracts with private firms. Several of these categories 

involve labor costs, and from fiscal years 2000 to 2004, the number of fulltime-equivalent (FTE) employees funded by the CSE program increased 

about 2,200. Yet, OCSE has not developed guidelines to help state agencies 

manage their FTEs and related labor costs. 

Median Percentage of Administrative Costs for Most Frequently Cited Categories, Fiscal 

Years 2002 to 2004 

0 20 40 60 80 100 

Contracts 

Automated data systems 

Cooperative agreements

Personnel 

Cost categories

Median percentage 

Source: GAO survey. 

44 

15 

13 

11 

State agencies reported implementing cost-saving initiatives, and while 

OCSE has helped state agencies manage costs, it has conducted a limited 

number of administrative cost audits to help ensure the appropriate use of 

federal funds. At least one-half of the state agencies reported implementing 7 

of the 10 cost-saving initiatives listed in our survey, and many reported cost 

savings. To help state agencies manage their programs, OCSE issued 

guidance, created federal/state work groups, and sponsored conferences. 

OCSE is required to conduct audits of state agencies’ administrative costs, 

and from March 2004 to March 2006, OCSE issued eight administrative cost 

audit reports. All of these audit reports raised questions about inappropriate 

expenditures. Although OCSE expects to have more resources available to 

conduct audits, it does not plan to use these resources to conduct more 

administrative cost audits. 

www.gao.gov/cgi-bin/getrpt?GAO-06-491.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Cornelia M. 

Ashby at (202) 512-7215 or

ashbyc@gao.gov. 
Contents 

Letter 1

Results in Brief 3

Background 5

Net Federal Expenditures, Collections, and the Nationwide CostEffectiveness Ratio Increased 13 

All State Agencies Reported Personnel as a Major Cost Category, 

but OCSE Has Not Developed Staffing Guidelines 20 

State Agencies Reported Implementing Cost-Saving Initiatives, and 

While OCSE Has Helped State Agencies, It Has Not Conducted

Administrative Cost Audits in Most States 26 

Conclusions 37

Recommendations for Executive Action 38 

Agency Comments and Our Evaluation 38 

Appendix I Objectives, Scope, and Methodology 40 

Appendix II Annual Percentage Changes in Net Federal 

Expenditures, by State Agency, for Fiscal Years 

2000 to 2004 44 

Appendix III Annual Percentage Changes in Collections, by State 

Agency, for Fiscal Years 2000 to 2004 46 

Appendix IV Percentage Changes in the Cost-Effectiveness 

Ratio by State Agency and Nationwide 48 

Appendix V Percentages Reported by State Agencies for Most 

Frequently Cited Cost Categories 50 

Appendix VI State Agencies’ Implementation of Certain 

Cost-Saving Initiatives 51 

Page i GAO-06-491 Child Support Enforcement
Appendix VII Comments from the Department of Health and 

Human Services 53 

Appendix VIII GAO Contact and Staff Acknowledgments 56 

Tables 

Table 1: Percentage of Incentive Payments and Cost-Effectiveness 

Ratios Established in the Child Support Performance and 

Incentive Act of 1998 11 

Table 2: Total Number of Cases and Median Net Federal Cost per 

Case, Fiscal Years 2000 to 2004. 18 

Table 3: Nationwide Cost-Effectiveness Ratio, Fiscal Years 2000 to 

2004 20 

Table 4: Total FTEs for State Child Support Enforcement 

Programs, Fiscal Years 2000 to 2004 24 

Table 5: Comparison of Information for Selected State Agencies for 

Fiscal Year 2004 25 

Table 6: Cost-Saving Initiatives State Agencies Reported 

Implementing and Estimated Cost Savings Reported by 

State Agencies, as of February 2006 29 

Table 7: States Agencies’ Views about OCSE’s Efforts to Help Them 

Manage Program Costs 33 

Table 8: OCSE’s Administrative Cost Audits Completed from March 

2004 to March 2006 34 

Figures 

Figure 1: Major Services of the Child Support Enforcement 

Program 7

Figure 2: Total Net and Median Net Expenditures, Fiscal Year 2000 

to Fiscal Year 2004 15 

Figure 3: Percentage Change in Net Federal Expenditures by State 

Agency, from Fiscal Year 2000 to Fiscal Year 2004 17 

Figure 4: Median Percentage of Total Administrative Costs for the 

Most Frequently Cited Administrative Cost Categories, 

Fiscal Year 2002 to Fiscal Year 2004 21 

Page ii GAO-06-491 Child Support Enforcement
Abbreviations 

ACF Administration for Children and Families 

CBO Congressional Budget Office 

CLASP Center for Law and Social Policy 

CSE Child Support Enforcement 

CSPIA Child Support Performance and Incentive Act 

FTE full-time-equivalent 

GATES Grants Application and Tracking and Evaluation System 

HHS Department of Health and Human Services 

OCSE Office of Child Support Enforcement 

PRWORA Personal Responsibility and Work Opportunity 

Reconciliation Act 

TANF Temporary Assistance For Needy Families 

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Page iii GAO-06-491 Child Support Enforcement
United States Government Accountability Office

Washington, DC 20548 

July 6, 2006

The Honorable Wally Herger 

Chairman 

Subcommittee on Human Resources 

Committee on Ways and Means 

House of Representatives 

The Honorable Wally Herger 

Chairman 

Subcommittee on Human Resources 

Committee on Ways and Means 

House of Representatives 

Dear Mr. Chairman: 

Child Support Enforceme pport Enforcement

In 1975, Congress established federal standards for state child support 

enforcement (CSE) programs to ensure that parents financially support 

their children. The CSE program was authorized by Title IV-D of the Social 

Security Act as a federal and state partnership.1

 The Office of Child 

Support Enforcement (OCSE) within the Department of Health and 

Human Services (HHS) is responsible for establishing program policies 

and overseeing state agencies and is required to conduct audits of state 

agencies’ performance data and administrative costs. OCSE is also 

responsible for providing assistance to help state agencies manage their 

programs. For example, OCSE has developed and disseminated to state 

agencies information on best practices and cost-saving initiatives. All 50 

states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and 

Guam administer a CSE program.2

 In most places, a single state agency

performs the day-to-day operations, but in others, counties operate the 

CSE program and states administer it. CSE program responsibilities 

include locating noncustodial parents—those who are not the primary 

caregivers for or do not have custody or control of their children; 

establishing paternity and support orders; and collecting and distributing 

child support payments. All costs incurred to carry out these 

responsibilities are considered administrative costs. The federal 

government funds most of the program by matching a percentage of the 

allowable administrative costs. These matching funds are not capped.

Also, the federal government provides incentive payments to state 

agencies for meeting certain performance measures, including the 

program’s measure of cost effectiveness. 

In 1975, Congress established federal standards for state child support 

enforcement (CSE) programs to ensure that parents financially support 

their children. The CSE program was authorized by Title IV-D of the Social 

Security Act as a federal and state partnership.

 

491

 

1

 The Office of Child 

Support Enforcement (OCSE) within the Department of Health and 

Human Services (HHS) is responsible for establishing program policies 

and overseeing state agencies and is required to conduct audits of state 

agencies’ performance data and administrative costs. OCSE is also 

responsible for providing assistance to help state agencies manage their 

programs. For example, OCSE has developed and disseminated to state 

agencies information on best practices and cost-saving initiatives. All 50 

states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and 

Guam administer a CSE program.2

 In most places, a single state agency

performs the day-to-day operations, but in others, counties operate the 

CSE program and states administer it. CSE program responsibilities 

include locating noncustodial parents—those who are not the primary 

caregivers for or do not have custody or control of their children; 

establishing paternity and support orders; and collecting and distributing 

child support payments. All costs incurred to carry out these 

responsibilities are considered administrative costs. The federal 

government funds most of the program by matching a percentage of the 

allowable administrative costs. These matching funds are not capped.

Also, the federal government provides incentive payments to state 

agencies for meeting certain performance measures, including the 

program’s measure of cost effectiveness. 

1

 42 U.S.C. §§ 651-669b. 

2

 In addition to these 54 CSE agencies, some American Indian tribes administer CSE

programs. In this report we refer to the 54 CSE agencies as “state agencies.” 

Page 1 GAO-06-491
Over the years, Congress has authorized various enforcement tools, such 

as garnishment of wages and revocation of licenses, to help increase 

collections, and Congress has provided funds for systems to automate 

many CSE program operations and make them more efficient. According 

to OCSE’s annual reports, from fiscal years 1995 to 2004, the net federal 

share of expenditures for the CSE program increased by one-third, in 

nominal dollars, and the program’s critical measure of cost effectiveness—

the ratio of dollars collected divided by total administrative 

expenditures—did not change significantly. 3 These increased expenditures 

raise questions about the factors that affect program costs and the extent 

to which state agencies are effectively managing the cost of their CSE 

programs. In an effort to provide information about more recent federal 

expenditures and the issues associated with the cost of administering the

CSE program, this report addresses the following questions: (1) How have 

total net federal expenditures for administrative costs changed from fiscal 

year 2000 to fiscal year 2004? (2) What categories of costs have

contributed most to federal expenditures for administrative costs in recent 

years? (3) What steps have state agencies taken to manage costs, and what 

steps has OCSE taken to help state agencies and ensure federal funds have 

been used appropriately? 

We obtained information from several sources in conducting this review. 

To address how federal expenditures for administrative costs have 

changed from fiscal year 2000 to fiscal year 2004, we obtained and 

analyzed the net federal share of expenditure data for each state agency

for each of these years. We also examined collections, number of cases,

cost-effectiveness ratios, and the number of full-time-equivalent (FTE) 

employees to gain some perspective about changes in expenditures. We 

performed procedures to assess the reliability of the system that maintains 

data related to funds administered by HHS’ Administration for Children 

and Families (ACF), including funds provided to state agencies for the 

CSE program. We found these data to be sufficiently reliable for our 

review. For some analyses, we adjusted these data for inflation to get a 

truer picture of changes over several years. Also, we calculated the median

amounts for expenditures and collections because of the wide variation

among state agencies. To obtain information for the other objectives, we 

conducted a survey, site visits, and interviews and reviewed related 

documents. We sent an e-mail survey to the 54 state agencies and received 

 3

 The expenditures include the net federal share of state agency expenditures but not costs

for OCSE staff and operations or CSE program costs at HHS/ACF regional offices. 

Page 2 GAO-06-491 Child Support Enforcement
responses from all of them. The survey asked state agencies to (1) identify

the five cost categories that contributed most to their administrative costs 

during fiscal years 2002 to 2004 and estimate the percentage that each 

category comprised, (2) provide information on selected cost-saving 

initiatives identified by OCSE as best practices, and (3) rate the extent to

which various OCSE assistance efforts had been helpful. We did not assess 

the reliability of the data state agencies reported in response to our survey, 

but we reviewed their responses for completeness and reasonableness. 

Also, we conducted site visits in the following six states: California, 

Connecticut, Maryland, Ohio, South Carolina, and Utah. We selected these 

states because they represented diversity in changes in the amounts of 

federal expenditures for fiscal years 2002 to 2004; geographical location;

and operational structure, that is state- or county-operated programs. In 

addition, we interviewed federal and state agency officials and child 

support experts, reviewed related reports, and analyzed applicable laws 

and regulations. We conducted our work between June 2005 and June 

2006 in accordance with generally accepted government auditing 

standards. See appendix I for more details on our objectives, scope, and 

methodology. 

From fiscal year 2000 to fiscal year 2004, total net federal expenditures for 

administrative costs increased about 23 percent. During this same period, 

child support collections and the program’s cost-effectiveness ratio also 

increased. Total net federal expenditures for administrative costs, adjusted 

for inflation, increased from about $2.2 billion to nearly $2.8 billion. 

Collections, adjusted for inflation, increased about 12 percent from about 

$19 billion to $22 billion. From fiscal year 2000 to fiscal year 2004, the 

program’s cost-effectiveness ratio—total collections divided by total 

administrative expenditures—increased about 4 percent. 

Results in Brief 

Personnel costs were cited as a major contributor to federal expenditures 

for administrative costs from fiscal years 2002 through 2004 by all state

agencies that responded to this question in our survey. Of the 54 state 

agencies, 49 responded to this question, and we determined that the 

median of the percentages state agencies provided was 44 percent of the

administrative costs. Personnel costs include salaries and benefits for all 

CSE program employees in the state. State officials said that personnel 

costs were a large percentage of their administrative costs for several 

reasons, including higher salaries for experienced staff, terms of collective

bargaining agreements, and increasing health benefit costs. In addition, 

child support officials from two state agencies said that although many 

child support operations are automated, the program remains laborintensive. Most state agencies also cited, as major cost categories, 

Page 3 GAO-06-491 Child Support Enforcement
cooperative agreements under which state CSE agencies pay other state 

and local agencies to perform child support enforcement functions, 

automated data systems, and contracts with private companies. Each of 

these cost categories lagged far behind personnel costs. Overall, state 

agencies reported that several major cost categories involved labor costs, 

at least in part. About 2,200 more FTEs for state agency personnel, as well 

as staff providing services under cooperative agreements and contracts, 

were funded by the CSE program in fiscal year 2004 than in fiscal year 

2000. OCSE officials said they had not conducted a study of the FTEs per 

state agency or developed guidelines to help state agencies manage related 

costs. 

The 54 state agencies reported implementing cost-saving initiatives, and,

while OCSE has helped state agencies manage their costs, its use of 

administrative cost audits to help ensure that federal funds have been used 

appropriately has been limited. At least one-half of the state agencies 

reported implementing 7 of the 10 cost-saving initiatives identified as best 

practices by OCSE and listed in our survey. These initiatives included 

electronic transmittal of wages withheld by employers (50 state agencies),

automated voice response systems (48 state agencies), and direct deposit 

of child support payments to parents’ checking or savings accounts 

(48 state agencies). State agencies also reported cost savings for nearly all 

of the 10 initiatives. For example, the New York agency reported saving 

$4.5 million since fiscal year 1993, when it began receiving funds 

electronically from employers that withheld wages for child support 

payments. Most state agencies (38) also reported that money saved from 

these initiatives was reinvested in the CSE program. To help state agencies

manage their costs, OCSE has provided a range of assistance, and, 

generally, state agencies viewed OCSE’s assistance favorably. Nearly all of

the state agencies reported that OCSE’s efforts—such as creating 

federal/state work groups, holding conferences or sponsoring training, and

issuing guidance—were very or moderately helpful. On the other hand, 

OCSE has not conducted administrative cost audits of most state agencies. 

From March 2004 to March 2006, OCSE issued eight administrative cost 

audit reports; all of which raised questions about inappropriate 

expenditures. For example, one audit of costs claimed for one quarter 

found about $670,000 in unallowable charges, and another audit that 

examined expenses claimed for one quarter determined that one state 

agency had inappropriately claimed about $603,000 in expenditures. OCSE 

officials said they did not have plans to conduct more administrative cost 

audits in the future, even though they expect that more audit resources 

will be available since OCSE reduced the frequency of its data reliability 

audits. Furthermore, OCSE officials did not cite the level of expenditures 

Page 4 GAO-06-491 Child Support Enforcement
for administrative costs as a factor that was considered in planning 

administrative cost audits. 

We are recommending that the Secretary of Health and Human Services 

direct the Commissioner of the Office of Child Support Enforcement to 

conduct a study of and develop guidelines for the number of FTEs for the 

CSE program, direct resources gained from conducting fewer data 

reliability audits to completing more administrative cost audits, and 

develop an audit plan that considers total expenditures as one of the 

factors used to select state agencies for administrative cost audits. 

HHS provided written comments on a draft of this report. HHS did not 

explicitly agree or disagree with our recommendations. In response to our 

recommendation to conduct a study of and develop guidelines for the 

number of full-time-equivalent employees, HHS stated that OCSE will 

consider doing such a study. In response to our recommendation to 

develop a plan to conduct administrative cost audits, HHS noted that 

OCSE has developed plans to conduct administrative cost audits in the 

past, has conducted those audits, and will continue to develop plans in the 

future. We revised the report to acknowledge that OCSE has a plan for 

conducting administrative cost audits and we modified our 

recommendation to better reflect our intent to encourage OCSE to 

complete more administrative cost audits than it completed during the 

2004 to 2006 time period. The HHS comments are discussed in the report 

and are reprinted in appendix VII. In addition, HHS provided technical 

comments, which we incorporated as appropriate. 

The CSE program makes services available to any parent or other person 

with custody of a child who has a parent living outside of the home. These 

services are available automatically for families receiving assistance under 

the Temporary Assistance for Needy Families (TANF), Medicaid, and 

Background 

Page 5 GAO-06-491 Child Support Enforcement
Foster Care programs.4

 Other families seeking government child support 

services can apply through their state agency or one of the tribes running 

the program. For these families, there is an application fee. Figure 1 

illustrates the major services provided by the CSE program. 

 4

 The TANF program provides assistance and work opportunities to needy families by 

granting states federal funds and wide flexibility to develop and implement their own 

welfare programs. When families apply for the TANF program, the custodial parent assigns 

to the state the right to child support collected while the family is receiving TANF benefits. 

The Medicaid program provides medical benefits to groups of low-income people, some

who may have no or inadequate medical insurance. Although the federal government

establishes general guidelines for the program, the Medicaid program requirements are 

established by each state. The Foster Care program provides open-ended matching 

payments to states for the costs of maintaining certain children in foster care and for the 

associated administrative, child placement, and training costs. Several eligibility criteria 

apply to the children on whose behalf federal reimbursement is available to states. 

Page 6 GAO-06-491 Child Support Enforcement
Figure 1: Major Services of the Child Support Enforcement Program 

Services state agencies provide 

Establish a case Locate 

noncustodial 

parenta

Establish paternityb

Review and 

modify support 

orderf

Establish support 

order/establish 

medical supportc

Collect child 

supportd

Source: GAO.

Distribute child 

supporte

a

The locate process includes steps taken to find a noncustodial parent or putative father. In addition, 

state agencies can help locate custodial parents. 

b

Paternity is the legal determination of fatherhood and must be established before child or medical 

support can be ordered. 

c

A support order is a judgment, decree, or order— whether temporary, final, or subject to 

modification—that is usually issued by a court or an administrative agency for the support and 

maintenance of a child. Support orders can incorporate the provision of monetary support; health 

care/medical support; payment of arrearages (past due, unpaid child support owed by the 

noncustodial parent); or reimbursement of costs and fees, interest and penalties, and other forms of 

relief. The noncustodial parent is required to provide medical support whenever health care coverage 

is available at a reasonable cost. A provision for such coverage is required as part of all child support

orders established or enforced by state agencies. 

d

Child support payments are collected through various methods such as income withholding; state or

federal income tax refund offsets; and other remedies,(e.g. seizure of assets). 

e

Child support collections are distributed to custodial families, states, or federal agencies via a check,

an electronic transfer, or other means. 

f

State agencies must review and, if necessary, adjust child support orders at least once every 3 years 

for TANF cases involving the assignment of support rights or upon the request of either the custodial 

or noncustodial parent for any case. 

The CSE program is financed by federal and state funds. Federal funds 

come from three funding streams—the federal match, also known as the 

federal financial participation; incentive payments; and grants. Generally, 

federal matching funds reimburse state agencies 66 percent of the 

administrative costs for their CSE programs. In addition to matching 

funds, the federal government pays state agencies incentive funds to 

encourage them to achieve program goals. Incentive funds are capped, and 

Page 7 GAO-06-491 Child Support Enforcement
in fiscal year 2004, $454 million were allocated for incentive payments.5

State agencies must reinvest their incentive funds in the CSE program. 

Federal funds also are available through grants. Grants for special 

improvement projects, demonstration projects, and child access and 

visitation programs are generally awarded annually. OCSE has received an

annual appropriation of $1.8 million for special improvement project 

grants or demonstration projects to promote the program’s overall 

objectives. Additionally, since fiscal year 1997, OCSE has distributed 

approximately $10 million per year to state agencies to support child 

access and visitation grants for activities such as mediation, counseling, 

education, development of parenting plans, noncustodial parent visitation 

enforcement (including monitoring and supervision), and development of

noncustodial parent visitation and alternative custody guidelines. 

According to a November 2005 report, state agencies used a number of 

funding sources to finance their share of CSE program administrative 

costs.6

 These funding sources included federal incentive payments, child 

support collected for parents receiving assistance through the TANF 

program, state general funds, state general funds paid as incentives, 

county general funds, and fees, along with several other sources that were 

mentioned less often by state agencies.7

 While state agencies generally

used more than one revenue source, they also varied in the combination of 

the revenue sources they used. 

For the CSE program, federal and state expenditures are generally offset 

by certain collections as well as fees and interest payments.8

 Child support 

collections for families that receive benefits from the TANF and Foster 

Care programs are deducted from the total federal and state expenditures 

and paid to these programs as reimbursements. For example, in fiscal year 

2004 about $2 billion in child support collections for families that received

TANF benefits were deducted from total CSE expenditures—the federal 

government was reimbursed $1.1 billion, and state agencies were 

 5

 The incentive pool is capped at $446 million for fiscal year 2005, $458 million for fiscal 

year 2006, $471 million for fiscal year 2007, and $483 million for fiscal year 2008. For years 

thereafter, the incentive pool is increased to account for inflation. 

6

 The Lewin Group and ECONorthwest, State Financing of Child Support Enforcement 

Programs, Final Report (Nov. 15, 2005). 

7

 States retain a share of the TANF-related child support collections and return a share of 

these collections to the federal government. States may use retained collections for the

CSE program or for other purposes. 

8

 42 U.S.C. § 657. 

Page 8 GAO-06-491 Child Support Enforcement
reimbursed about $900 million. In addition, some state agencies collect 

fees from parents for their services, and such fees are also deducted from 

total expenditures. Also, expenditures are reduced by interest income that

accrues to state agencies for collections deposited in interest-bearing 

accounts. 

Over the years, Congress has passed numerous laws that have had an 

impact on the CSE program, including the following: 

• The Social Security Disability Amendments of 1980 included a 

provision that gave state agencies 90 percent matching funds for the 

cost of developing, installing, and enhancing approved automated data

systems.9

 In 1997, we reported that state agencies had spent over 

$2.6 billion since the early 1980s to develop their systems, and the 

federal government had paid from 66 to 90 percent of the systems’ 

costs, which amounted to more than $2 billion.10

• The Child Support Enforcement Amendments of 1984 addressed many 

aspects of the program.11 For example, this act required that all states 

provide for the use of mandatory wage withholding procedures and 

expedited processes for establishing and enforcing support orders.12

The act made available federal matching funds at the 90 percent rate 

for the development and installation of automated data systems to 

facilitate income withholding and other procedures. The act reduced 

the overall federal matching rate to 68 percent for fiscal years 1988 and

1989, and to 66 percent for fiscal year 1990 and thereafter. Also, the act 

established procedures for intercepting state income tax refunds, 

imposing liens against real and personal property, and reporting 

delinquency information to consumer reporting agencies. 

 9

 Pub. L. No. 96-265 (1980). 

10 GAO, Child Support Enforcement: Strong Leadership Required to Maximize Benefits of 

Automated Systems, GAO/AIMD-97-72 (Washington, D.C.: June 30, 1997). 

11 Pub. L. No. 98-378 (1984). 

12 Wage withholding, also known as income withholding, is a procedure by which 

scheduled deductions are automatically made from wages or income to pay a debt, such as 

child support. Wage withholding often is incorporated into the child support order and may 

be voluntary or involuntary. The provision dictates that an employer must withhold child 

support from a noncustodial parent’s wages and transfer that withholding to the 

appropriate agency (the state Centralized Collection Unit or State Disbursement Unit).

Page 9 GAO-06-491 Child Support Enforcement
• The Family Support Act of 1988 established several requirements.13 For 

instance, the Secretary of HHS was required to set time limits within 

which collections must be distributed to families, and state agencies 

were required to meet federal standards for the establishment of 

paternity and to provide for wage withholding in accordance with child 

support orders. Also, this act made it mandatory for states to 

computerize their CSE programs and required states to have their 

automated data systems certified by October 1, 1995.14

• The Personal Responsibility and Work Opportunity Reconciliation Act 

of 1996 (PRWORA) included many provisions related to the CSE 

program.15 For example, PRWORA reinstated the 90 percent matching 

rate through September 30, 1997, to enable state agencies to complete 

the development and implementation of their automated data systems 

and extended the deadline for implementation to October 1, 1997. 

PRWORA also provided a matching rate of 80 percent, capped at 

$400 million for fiscal years 1996 to 2001, for system development and 

implementation costs related to automated data processing 

requirements. In addition, PRWORA provided state agencies with new 

enforcement tools, such as suspension of licenses, denial of passports, 

and financial institution data matches, and included procedures for the 

periodic review and adjustment of support orders by state agencies.16

Furthermore, PRWORA required audits to assess the completeness, 

reliability, and security of the data used in calculating performance 

indicators and audits of the financial management of states’ programs, 

including assessments of whether federal and other funds were being 

appropriately expended and properly accounted for. 

• The Child Support Performance and Incentive Act (CSPIA) of 1998 

established several new procedures and changed the method for 

calculating incentive payments.17 Since 1975, the federal government 

 13 Pub. L. No. 100-485 (1988). 

14 Certified CSE systems must be comprehensive, operate statewide, and meet established 

standards of efficiency and effectiveness and principles of an integrated system. In 

addition, these systems must perform certain key functions including case initiation, case 

management, financial management, and reporting. 

15 Pub. L. No. 104-193 (1996). 

16 With the financial institution data match, state agencies match information on delinquent

noncustodial parents with the records of their financial accounts and may seize funds in

those accounts.

17 Pub. L. No. 105-200 (1998). 

Page 10 GAO-06-491 Child Support Enforcement
has paid incentives to state agencies to encourage program 

improvement. The new incentive system established by CSPIA links 

incentive payments to performance in five areas: paternity 

establishment, order establishment, collections of current child 

support, collections of child support in arrears, and cost effectiveness. 

CSPIA specifies the percentage of incentive funds that a state agency 

can receive on the basis of the state agency’s level of performance in 

each of these areas. For example, the applicable percentage of 

incentive funds for cost-effectiveness ratios is shown in table 1. 

Table 1: Percentage of Incentive Payments and Cost-Effectiveness Ratios

Established in the Child Support Performance and Incentive Act of 1998 

If the cost-effectiveness ratio is: 

At least: But less than: 

The applicable

 percentage is:

5.00 100

4.50 4.99 90

4.00 4.50 80

3.50 4.00 70

3.00 3.50 60

2.50 3.00 50

2.00 2.50 40

0.00 2.00 0

Source: 42 U.S.C. § 658(b)(6)(E)(ii). 

• The Deficit Reduction Act of 2005 included provisions that will affect 

CSE program funds.18 The act reduced the match rate for paternity 

testing from 90 percent to 66 percent effective October 1, 2006; 

eliminated the federal match for incentive payments effective October 

1, 2007; and required states to impose an annual fee of $25 on each 

family that never received TANF benefits and for which the program 

collects $500 a year.19 The Congressional Budget Office (CBO) 

estimated that by 2010 the federal share of administrative costs would 

be reduced by $1.8 billion from eliminating the federal match for 

incentive payments and by $28 million from the lower match rate for 

 18 Pub. L. No. 109-171 (2006). 

19 Prior to the Deficit Reduction Act of 2005, the incentive payments that state agencies 

received from the federal government were reinvested in the CSE program and then 

reimbursed at the appropriate federal matching rate. 

Page 11 GAO-06-491 Child Support Enforcement
paternity testing. CBO also estimated that the federal government 

would receive an additional $172 million from the annual fee. Further, 

CBO estimated that total funding for the program could fall 15 percent 

by 2010 if states did not adjust their own spending for CSE programs. 

This act also included provisions that will reduce federal expenditures 

for several other programs. 

We have expressed concern about the federal government’s financial 

condition and the nation’s growing fiscal imbalance. Also, we have 

reported that if the federal government is to effectively address this 

concern, it cannot accept all of the existing programs, policies, and 

activities as givens, and that rethinking the base of existing federal 

spending is an important step.20

As the federal partner, OCSE has several responsibilities. OCSE sets 

policies and standards, provides technical assistance, and evaluates state 

agency performance. 21 OCSE also collects and reviews expenditure data 

that state agencies submit using OCSE’s Quarterly Report of Expenditures 

and Estimates. OCSE maintains these data in the Grants Application 

Tracking and Evaluation System (GATES) operated by ACF. 22

Furthermore, OCSE is responsible for helping state agencies administer 

their programs. Routinely OCSE has developed and disseminated to state

agencies a compendium of what it considers best practices. Each 

compendium describes several best practices, provides information on the 

results of implementing the practices, and identifies a contact person. In 

transmitting the compendium, OCSE stated that it does not endorse any 

particular practice, but believes that by providing the state agencies with 

 20 GAO, 21st Century Challenges: Reexamining the Base of the Federal Government, 

GAO-05-325SP (Washington, D.C.: February 2005). 

21 Staff members in the 10 HHS/ACF regional offices also oversee the administration of the

CSE program as well as other programs. The regions guide the programmatic and financial 

management of ACF programs in their jurisdictions and provide assistance, resources, and

information to the various entities responsible for administering these programs. Regional

offices represent ACF to state, county, city and tribal governments, grantees, and public 

and private organizations. 

22 GATES is ACF’s primary grants administration system. This system is designed to

automate the process of awarding discretionary, formula, block, and entitlement grants; 

maintain a nationwide database of grant program and fiscal information; provide an easy 

method for viewing and printing management reports; compile post-award monitoring

information and assist with planning for monitoring; safeguard federal funds through 

management of funding limits; and facilitate the closeout of grants and the archiving of

program and fiscal performance information.

Page 12 GAO-06-491 Child Support Enforcement
solutions undertaken at the state and local levels, general program 

performance can be improved. 

Overall from fiscal year 2000 to fiscal year 2004, total net federal 

expenditures for administrative costs increased about 23 percent. Net 

federal expenditures increased in more than one-half of the state agencies, 

and the net federal cost per case increased about 36 percent. Also, 

collections and the nationwide cost-effectiveness ratio have increased. 

Net Federal 

Expenditures, 

Collections, and the 

Nationwide CostEffectiveness Ratio 

Increased 

Page 13 GAO-06-491 Child Support Enforcement
Total net federal expenditures for administrative costs increased about 

23 percent, and the net federal median expenditure increased more than 

 2 percent.23 From fiscal year 2000 to fiscal year 2004, total net federal 

expenditures increased from about $2.2 billion to nearly $2.8 billion.24

While total net federal expenditures increased each year, the largest 

increase, in nominal dollars, was about 14 percent from fiscal year 2000 to

fiscal year 2001. Overall, the median net federal expenditure increased 

from about $25 million to about $26 million between fiscal years 2000 and

2004. However, the median net federal expenditure for state agencies with

state-operated programs decreased about 4 percent from about $20 million 

in fiscal year 2000, to $19 million in fiscal year 2004, while the median net 

federal expenditure for state agencies with county-operated programs 

increased about 11 percent—from about $59 million to about $66 million. 

According to a CSE program expert and a state agency official from a state 

we visited, expenditures for county-operated programs may be higher 

because of possible duplication in administrative functions at the state and 

county levels. Figure 2 shows the trends in total net and median net 

federal expenditures. 

Total Net Federal 

Expenditures and Total 

Collections Increased 

 23The total net expenditure amounts shown in the report have been rounded. We 

calculated the total percentage changes based on the exact net federal expenditure

amounts--$2,245,016,243 for fiscal year 2000 and $2,770,020,216 for fiscal year 2004. 

24 Unless otherwise noted, expenditure data have been adjusted for inflation based on 2004 

dollars. In nominal dollars, the expenditures were about $2 billion in fiscal year 2000 and 

about $2.8 billion in fiscal year 2004. 

Page 14 GAO-06-491 Child Support Enforcement
Figure 2: Total Net and Median Net Expenditures, Fiscal Year 2000 to Fiscal Year 

2004 

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2004

Median net federal expenditures (dollars in millions)

Source: OCSE data.

Fiscal year

Median for all programs

Median for County-operated programs

Median for State-operated programs

0

500

1,000

1,500

2,000

2,500

3,000

2000 2001 2002 2003 2004

Total net federal expenditures (dollars in millions)

Net federal expenditures

Fiscal year

Note: In addition to the state- and county-operated programs, 5 states—Arizona, Nebraska, Nevada, 

New Jersey, and Oregon—reported having a combination of state- and county-operated programs. 

For example, in Arizona, 10 of its 15 counties are operated by the state agency; 4 are operated by

counties; and 1 is operated by a private contractor. Data for these state agencies are included in the 

overall net expenditures and the median expenditures for all programs, but not in the medians for 

either the state- or county-operated programs. 

Page 15 GAO-06-491 Child Support Enforcement
Overall, total net federal expenditures from fiscal year 2000 to fiscal year 

2004 increased for more than one-half of the state agencies; however, the 

percentages varied. From fiscal year 2000 to fiscal year 2004, total net 

federal expenditures increased in 30 of the 54 state agencies. These 

increases ranged from about 1 percent to over 400 percent, and the median 

for these state agencies was 14.8 percent. According to comments from 

HHS on a draft of this report, many of the large increases and decreases 

are a result of adjustments for under or over reporting expenditures in a 

previous quarter. Total net federal expenditures increased most in Maine 

and California, reflecting special circumstances in both states. According

to Maine’s state agency director, the agency made adjustments over 

several quarters to correct its reporting of interest income earned. In 

California, state agency officials explained that most of the increase was 

attributable to costs associated with developing and implementing its 

statewide automated data system.25 Nearly all state agencies (51) had at 

least 1 year when net federal expenditures decreased. For example, net 

federal expenditures for Alabama’s program decreased from fiscal year 

2000 to fiscal year 2001 and increased in other fiscal years, while net 

federal expenditures for Mississippi’s program decreased in each of the

fiscal years from 2000 to 2003. Figure 3 shows the percentage change in 

net federal expenditures by state agency during fiscal year 2000 to fiscal

year 2004. Appendix II provides data on annual percentage changes in net 

federal expenditures, using nominal numbers, for each state agency for 

fiscal years 2000 to 2004. 

 25 During our review, California and South Carolina were the only state agencies without 

certified automated data systems. 

Page 16 GAO-06-491 Child Support Enforcement
Figure 3: Percentage Change in Net Federal Expenditures by State Agency, from Fiscal Year 2000 to Fiscal Year 2004 

Source: OCSE data.

Alaska

Guam Hawaii

Puerto Rico

Virgin Islands

N.H.

Mass.

R.I.

Conn.

N.J.

Del.

Md.

D.C.

Vt.

Ala.

Ariz. Ark.

Calif.

Colo.

Ga.

Idaho

Ill. Ind.

Iowa

Kans.

La.

Mich.

Minn.

Mo.

Mont.

Nebr. Nev.

N.Mex.

N.Y.

N.Dak.

Okla.

Oreg.

Pa.

S.C.

S.Dak.

Tenn.

Tex.

Utah

Va.

Wash.

W.Va.

Wisc. Wyo.

Fla.

Miss.

N.C.

Ohio

Ky.

7 (1.9)

(15.8)

26.4

(12.5) (7.6)

68.5

(16.5)

(64.8) 5.9

1.3

(38.7)

(9)

11.4

12.5 (2.8)

3.7

(4.1)

5.3

26.7

28.8

11.4

(31.5)

(2.5)

7.3

45.7

(18.3)

(1)

4.7

14.6

(26.6)

9

(21.2)

25.7

(2.5)

15

10.5

(6.3)

23.2 18.7

181.7

(11.3)

4.4

(1)

11.6

63.6

24.1

32.5

(14.2)

(12.5)

(4.7)

(2.7)

72.3

Maine

470.2

Decline (24 states)

Less than 50% (25 states)

50.1 – 100% (3 states)

100.1 – 200% (1 state)

Over 200.1% (1state)

Note: parentheses indicate a decrease in net federal expenditures. 

For fiscal years 2000 to 2004, the median net federal cost per case 

increased 36 percent, as measured in nominal dollars, and the number of 

cases declined about 1.5 million; however, the median net federal cost per

case generally increased, even when the number of cases remained about 

Page 17 GAO-06-491 Child Support Enforcement
the same. From fiscal year 2000 to fiscal year 2001, the number of cases 

remained at about 17 million, and the median net federal cost per case 

increased from $121 to $138, in nominal dollars. During fiscal years 2002 to 

2004, the program managed about 16 million cases per year and the 

median net federal cost per case continued to increase. Table 2 

summarizes the number of cases and median net federal cost per case. 

Table 2: Total Number of Cases and Median Net Federal Cost per Case, Fiscal Years 

2000 to 2004. 

Fiscal year Total cases 

Median net federal cost per

case (nominal dollars) 

2000 17,374,041 $121

2001 17,060,501 138

2002 16,065,728 158

2003 15,923,353 156

2004 15,854,475 165

Source: OCSE data. 

Note: We used nominal dollars when comparing data from year to year in order to be consistent with 

data previously reported to Congress. 

Total and median collections increased, and the CSE program is collecting 

from a larger percentage of its cases. From fiscal year 2000 to fiscal year 

2004, total collections increased about 12 percent from $19 billion to about 

$22 billion.26 During the same period, collections increased for most state 

agencies, but the percentage of increase varied among the state agencies 

and from year to year. For example, from fiscal year 2000 to fiscal year 

2001, collections in Vermont increased about 5 percent and collections in 

Illinois increased about 17 percent. From fiscal year 2003 to fiscal year 

2004, collections in Vermont increased about 15 percent, while Illinois’ 

collections increased about 9 percent. Appendix III provides data on 

annual percentage changes in total collections for each state agency for 

fiscal years 2000 to 2004. According to comments from HHS on a draft of

this report, many of the large increases and decreases in collections are a

result of adjustments for under or over reporting in a previous quarter. 

Overall, median collections also increased, and the median collections for 

 26 All collections data have been adjusted for inflation in 2004 dollars. (In nominal dollars, 

the collections were about $18 billion in fiscal years 2000 and $22 billion in fiscal year 

2004.) The total collection amounts shown in the report have been rounded. However, we 

calculated the total percentage changes based on the exact collection amounts--

$19,447,826,418 in fiscal year 2000 and $21,861,258,876 in fiscal year 2004.

Page 18 GAO-06-491 Child Support Enforcement
state agencies with county-operated programs were higher than for state 

agencies with state-operated programs. The median collection for countyoperated programs was about $519 million in fiscal year 2000 and 

$567 million in fiscal year 2004, while the median collection for stateoperated programs increased from about $141 million to $156 million 

during this period. Also, OCSE data indicate that the program has received

collections for a larger percentage of the cases. In fiscal year 2000, OCSE 

reported the program received collections for about 42 percent of the 

cases, and, in fiscal year 2004, the program received collections for about 

52 percent of the cases. 

The Nationwide CostEffectiveness Ratio Also 

Increased 

From fiscal year 2000 to fiscal year 2004, the nationwide cost-effectiveness 

ratio—the ratio of collections divided by total federal and state 

administrative expenditures—increased about 4 percent.27 As shown in 

table 3, the nationwide cost-effectiveness ratio from fiscal year 2000 to 

fiscal year 2004 ranged from 4.13 to 4.38 and decreased during fiscal years 

2000 to 2002. Furthermore, the percentage change in the nationwide costeffectiveness ratio has varied from a decrease of 1.9 percent from fiscal 

year 2001 to fiscal year 2002 to an increase of 4.6 percent from fiscal year

2002 to fiscal year 2003. Percentage changes in the cost-effectiveness ratio 

by state agency and nationwide are listed in appendix IV. According to 

comments from HHS on a draft of this report, many of the large increases 

and decreases in the cost effectiveness ratios are a result of adjustments 

for under or over reporting expenditures and/or collections in a previous

quarter. 

 27 We calculated the percentage change for the nationwide cost effectiveness ratio by

comparing the cost effectiveness ratio in fiscal year 2000 (4.23) to the cost effectiveness 

ratio in fiscal year 2004 (4.38). The cost effectiveness ratio is equal to the total amount

collected during the fiscal year divided by the total amount expended—federal as well as 

state expenditures. 

Page 19 GAO-06-491 Child Support Enforcement
Table 3: Nationwide Cost-Effectiveness Ratio, Fiscal Years 2000 to 2004 

Fiscal year Nationwide cost-effectiveness ratio 

2000 4.23 

2001 4.21 

2002 4.13 

2003 4.32 

2004 4.38 

Source: OCSE data. 

On a state agency basis, the cost-effectiveness ratios varied. For example, 

for fiscal year 2004, the cost-effectiveness ratio ranged from 8.70 for 

Hawaii to 1.83 for the Virgin Islands. During each of the fiscal years 2000 to

2004, four state agencies had a cost-effectiveness ratio below 2.0—the 

minimum to receive an incentive payment.28 Also, during fiscal years 2000 

to 2004, the annual performance of more than 80 percent of the state 

agencies declined at least once. For example, for fiscal years 2000 to 2004, 

Delaware’s cost-effectiveness ratios were 3.19, 2.93, 3.66, 3.03, and 

3.01, respectively. Due to the way that the incentive program is structured, 

states with declining cost-effectiveness performance have received 

incentive funds for these years because they were over the 2.0 minimum 

ratio. 

Of the 54 state agencies, 49 responded to this question and cited personnel 

costs as a major cost category during fiscal years 2002 to 2004. These costs 

represented the largest share of administrative costs cited by 38 state 

agencies. In addition to personnel costs, most state agencies identified the 

following as major cost categories: cooperative agreements under which 

state CSE agencies reimburse other agencies to perform child support 

enforcement functions, automated data systems, and contracts with 

private vendors. As shown in figure 4, these categories represented smaller 

percentages of state agencies’ costs than personnel costs. Appendix V 

provides more information about the range of percentages reported by 

state agencies for the most frequently cited cost categories. Overall, state 

agencies reported that several major cost categories involved labor 

All State Agencies 

Reported Personnel 

as a Major Cost 

Category, but OCSE 

Has Not Developed 

Staffing Guidelines 

 28The February 1997 HHS report to the House of Representatives Committee on Ways and 

Means and the Senate Committee on Finance on child support enforcement incentive 

funding explained that the upper and lower thresholds for performance for each of the

incentive measures were based on analysis of state performance data and projections. 

Page 20 GAO-06-491 Child Support Enforcement
costs—state personnel, staff from other state and local agencies, and 

contractors—and reflect an increase in the number of FTE employees over 

the last several years. While OCSE regulations address general staffing 

requirements, OCSE has not developed staffing guidelines to help state 

agencies manage their labor costs. 

Figure 4: Median Percentage of Total Administrative Costs for the Most Frequently 

Cited Administrative Cost Categories, Fiscal Year 2002 to Fiscal Year 2004 

0 

10 

20 

30 

40 

50 

60 

70 

80 

90 

100 

Contracts

Cooper

Automated 

ative 

Personnel 

Median percentage 

Source: GAO Survey. 

agreements

data systems

44 

15 13 11 

Note: This figure includes responses from 49 of the 54 state agencies. We excluded 5 countyoperated state agencies from this analysis because they did not include county costs in their 

responses to this survey question.

Page 21 GAO-06-491 Child Support Enforcement
All 49 state agencies cited personnel costs as one of their largest cost 

categories during fiscal years 2002 to 2004.29 The median of the 

percentages state agencies provided for personnel costs was 44 percent of

total administrative costs. Officials from 38 state agencies ranked 

personnel as their largest cost category and estimated that this category 

represented from 30 percent to 80 percent of their total administrative 

costs during fiscal years 2002 to 2004. Personnel costs include salaries and 

benefits for all state agency employees. In fiscal year 2002, the CSE 

program nationwide had about 43,000 FTEs, and in fiscal years 2003 and 

2004, the program had about 42,000 FTEs. State agency officials with 

whom we spoke said that personnel costs represent a large percentage of

the total administrative costs for several reasons. State agency officials 

explained that personnel costs are affected by higher salaries for 

experienced staff and increasing health benefits costs. According to a 

representative of a national child support organization, for state agencies 

with collective bargaining agreements, the terms of these agreements can

affect personnel costs. Also, officials from county-operated states that we 

visited commented that the state agency has limited control over how the 

counties compensate their personnel. 

All State Agencies 

Reported That Personnel 

Costs Were a Major 

Contributor to Their 

Administrative Costs, and 

Most State Agencies Also 

Cited Cooperative 

Agreements, Automated 

Data Systems, and 

Contracts as Major Costs 

Cooperative agreements were cited by 37 of 49 state agencies as among 

their largest administrative cost categories, and the median of the 

percentages state agencies provided for this category was 15 percent. 

Cooperative agreements were the largest cost category for 3 state 

agencies, where these costs represented 40 percent to 70 percent of total

administrative costs. Under the cooperative agreements that we reviewed, 

state CSE agencies reimbursed other state or local agencies for services 

critical to the CSE program. For example, in California, the CSE agency

has cooperative agreements with the state tax agency, in order to use 

certain enforcement tools. Additionally, the Nebraska and South Carolina 

CSE agencies have cooperative agreements with county clerks of the 

court, and the Iowa agency has cooperative agreements with local sheriffs 

to serve court papers to noncustodial parents. According to OCSE data, 

state agencies used about 16,400 FTEs under cooperative agreements to 

provide CSE program services in fiscal year 2004, an increase of about 

1 percent since fiscal year 2002. According to state agency officials, it can

be challenging for CSE agencies to manage the costs charged by other 

agencies under cooperative agreements. In an attempt to manage such 

 29 We excluded five county-operated state agencies from this analysis because they did not

include the county costs in their responses to this survey question. 

Page 22 GAO-06-491 Child Support Enforcement
costs, CSE agency officials in Utah told us that after they detected 

increased charges from the Attorney General’s office to cover attorneys’ 

pay increases, they capped the payments to that office. 

Automated data systems costs were included among the largest cost 

categories by 35 of 49 state agencies, and the median of the percentages 

these state agencies provided for this cost category was 13 percent. 

Automated data systems were the largest cost category for 5 state 

agencies, where these costs represented 25 percent to 65 percent of total

administrative costs. These included costs for ongoing maintenance as 

well as for enhancements. According to an OCSE official, automated 

systems continuously require enhancements to meet new requirements 

and operational changes to keep up with technology. Moreover, according 

to a state CSE agency official from Utah, the state periodically raises the 

costs for processing data and accessing the mainframe for all state 

agencies, and in 1 year, the cost for the state CSE agency increased by 

38 percent. 

Contract costs were included by 41 of 49 state agencies among their 

largest cost categories, and the median of the percentages these state 

agencies provided for this cost category was 11 percent of total 

administrative costs. Contracts were the largest cost category for 3 state 

agencies, where these costs represented 49 percent to 68 percent of total

costs. According to several state agency officials with whom we spoke, 

state agencies have contracted with private sector companies for a wide 

range of services, including testing blood to establish paternity, obtaining

information from credit bureaus to help locate noncustodial parents, 

operating call centers, identifying assets, and processing payments. State 

agencies may combine multiple services in a single contract. For example, 

state agency officials in Connecticut told us that the agency uses a single 

contract to obtain many services such as processing payments, handling 

clients’ inquiries, providing outreach services to clients, managing a Web 

site that provides information on case status, and automating certain 

notices. In addition, some state agencies have hired contractors to operate 

the CSE program at the local level. For example, Tennessee relies on 

contractors for all local services in 24 of the state’s 95 counties, and an

agency official estimated that contract costs represented about 52 percent 

of the state agency’s administrative costs during fiscal years 2002 to 2004. 

According to OCSE data, state agencies contracted for about 2,300 FTEs in 

fiscal year 2004, a decrease of about 11 percent since fiscal year 2002. 

According to a state agency director, contracting can be an option for state 

agencies when the state has placed a cap on personnel levels.

Page 23 GAO-06-491 Child Support Enforcement
Additionally, some of the 49 state agencies reported that other costs were 

among their largest cost categories during fiscal years 2002 to 2004. 

Twenty-four state agencies cited rent among their largest cost categories, 

postage was cited by 15 state agencies, and 12 state agencies included 

telecommunications costs. The medians of the percentages that state 

agencies provided for each of these categories ranged from 2.3 percent to

3.9 percent of total administrative costs. 

Several Major Cost 

Categories Reflected 

Increased FTEs Funded by 

the CSE Program, but 

OCSE Has Not Developed 

Staffing Guidelines 

State and local CSE personnel, staff working under cooperative 

agreements, and individuals hired through contracts contributed to three 

of the categories that state agencies said were among the major 

contributors to federal expenditures for administrative costs. As shown in 

table 4, the number of FTEs funded for state CSE programs increased by 

about 2,200 from fiscal year 2000 to fiscal year 2004. 

Table 4: Total FTEs for State Child Support Enforcement Programs, Fiscal Years 

2000 to 2004 

Fiscal 

Year Total FTEs Year-to-year change

Cumulative 

change

2000 58,171 n/a n/a

2001 60,535 +2,364 2,364

2002 61,797 +1,262 3,626

2003 60,756 -1,041 2,585

2004 60,354 -402 2,183

Source: OCSE data. 

Note: FTEs include CSE personnel, staff from other state and local agencies working under 

cooperative agreements, and contractors. 

Furthermore, among selected state agencies with similar numbers of 

cases, the number of FTEs varied widely as did the percentage of cases 

with collections and the cost-effectiveness ratios. Table 5 shows that for 

7 state agencies with about 150,000 to 249,000 cases, the number of FTEs 

in fiscal year 2004 ranged from 460 in Connecticut to 1,559 in Minnesota.30 

Also, table 5 shows that the number of cases per FTE varied from 457 in 

 30 While South Carolina’s state agency had about 223,000 cases in fiscal year 2004, we did 

not include it in this table because of concerns about the accuracy of the FTE data. 

Specifically, the data do not include any FTEs for cooperative agreements, yet as noted

earlier in this report, South Carolina has cooperative agreements with county clerks of the

court. 

Page 24 GAO-06-491 Child Support Enforcement
Connecticut to 158 in Minnesota. Additionally, the Iowa CSE program, 

with 293 cases per FTE, had the highest percentage of cases with 

collections, and the Puerto Rico CSE program, with 272 cases per FTE, 

had the highest cost-effectiveness ratio. 

Table 5: Comparison of Information for Selected State Agencies for Fiscal Year 2004 

State agency Number of cases Total FTEs Cases per FTE

Percentage of cases 

with collections

Costeffectiveness 

ratio

Alabama 237,442 756 314 69 3.93

Connecticut 210,311 460 457 61 3.20

Iowa 179,759 613 293 89 5.59

Minnesotaa246,408 1,559 158 79 4.10

Oklahoma 151,410 590 257 71 3.64

Oregona249,048 741 336 69 5.76

Puerto Rico 240,878 887 272 66 7.88

Source: OCSE data. 

a

Minnesota’s CSE program is county-operated, and Oregon’s program is a combination of state- and 

county-operated.

Note: FTEs include CSE personnel, staff from other state and local agencies working under 

cooperative agreements, and contractors. 

According to two state agency officials and a CSE expert, although many 

state agency operations are automated, the program’s processes remain 

labor-intensive. For example, one state agency official noted that 

automation has helped facilitate the processes of locating noncustodial 

parents and enforcing child support orders. However, this official also said

that the additional information obtained through automation, such as data 

to help identify assets, can involve due process considerations that give

noncustodial parents the right to a hearing. Agency staff may need to talk

to these parents about their rights and responsibilities and to attend 

hearings—services that cannot be automated. Additionally, this official 

commented that while new program requirements established by federal 

law have created new enforcement tools, they have also led to processes 

that can be very labor-intensive. Another state agency official said that 

even with automation, caseworkers still need to work closely with families 

to ensure that data reflect families’ current situations. 

Furthermore, while OCSE has issued regulations that address minimum 

organizational and staffing requirements, OCSE officials said they have not 

reviewed the number of FTEs per state agency or issued specific 

Page 25 GAO-06-491 Child Support Enforcement
guidelines. The OCSE regulations state the IV-D agency is to have an 

organizational structure and sufficient staff to fulfill various program 

functions and sufficient resources to meet performance and time 

standards. Also, the regulations include a provision under which the 

Secretary of HHS may set resource standards for a state if it is determined 

as a result of an audit that the state is not in substantial compliance with 

program performance standards and the Secretary determines that 

inadequate resources were a major contributing factor. OCSE officials said

that it is more appropriate for state agencies to determine their resource 

needs because of the many differences in the operations among the state 

agencies, such as whether they are state- or county-operated. OCSE 

officials also stated that OCSE has not reviewed state agencies’ FTEs or 

developed guidelines to help state agencies manage the number of FTEs 

and the related costs. Furthermore, OCSE officials said that given the 

demands on the program, they do not expect staffing levels to ever 

decline. 

State agencies reported they had implemented cost-saving initiatives 

identified in our survey, and while OCSE has provided assistance to help 

state agencies, it has not conducted administrative cost audits in most 

states to help ensure that federal funds have been used appropriately. 

Most state agencies reported that savings from implementing cost-saving 

initiatives were reinvested in the program. OCSE has provided a range of 

assistance to help states manage costs, and state agencies have generally

found that assistance helpful. However, OCSE has completed a limited 

number of administrative cost audits from March 2004 to March 2006, even 

though all of the completed audits raised questions about inappropriate 

expenditures. 

Nearly all state agencies reported they had implemented 4 of the 10 costsaving initiatives identified in our survey. Also, at least one-half of the state

agencies reported they had implemented 3 other initiatives, while fewer 

than one-half of the state agencies reported implementing the remaining 

3 initiatives. Of the 10 initiatives, 6 have been implemented by some state 

agencies for a decade or more, while others have been implemented more 

recently. For example, 9 state agencies reported having implemented voice 

response systems before fiscal year 1995. By contrast, electronic 

distribution of collections via debit cards did not begin to be implemented 

State Agencies 

Reported 

Implementing CostSaving Initiatives, and 

While OCSE Has 

Helped State 

Agencies, It Has Not 

Conducted 

Administrative Cost 

Audits in Most States 

State Agencies Reported 

Implementing Many CostSaving Initiatives and 

Reinvesting the Savings in 

the Program 

Page 26 GAO-06-491 Child Support Enforcement
by any state agency until fiscal year 2000, and most of the state agencies 

with debit cards reported they implemented them in or after fiscal year 

2004. State agencies reported several reasons for not implementing 

initiatives, including lack of funds or staff to perform the work, issues 

related to protecting program and client data, and the need to meet other 

state or CSE program priorities. Table 6 provides more information about 

the cost-saving initiatives in our survey, and appendix VI identifies the 

initiatives that state agencies reported they had implemented. 

For many state agencies, participation in certain initiatives has been 

voluntary, and the extent of participation has varied. According to an 

OCSE November 2005 update of a survey of all state agencies conducted 

by the Massachusetts state agency, most state agencies offered direct 

deposit as an option, with the percentage of payments made via direct 

deposit ranging from 10 percent to 73 percent. Also, according to the 

results of this survey, some state agencies—such as Illinois and Nebraska--

offered debit cards to custodial parents on a voluntary basis, and the 

percentage of payments made via debit cards in a state ranged from about 

3 percent to 70 percent. The survey data are consistent with what we 

found in the states we visited. In Utah and Connecticut, for example, 

direct deposit is voluntary and officials said that 41 percent and 46 percent

of payments, respectively, were made through direct deposit. Electronic 

transmittal of wages withheld by employers for child support payments is 

another example of an electronic payment method that is voluntary, in this 

case for the employer. For example, in Alaska, a state agency official told 

us that about 53 percent of payments withheld from wages are received 

electronically. According to state agency officials with whom we spoke in 

Utah and Connecticut, as well as an OCSE official, participation in 

electronic payment initiatives has not been higher for several reasons, 

such as the initial start-up costs employers incur and the clients’ lack of 

familiarity with these methods and preference for cash. Also, according to 

an official from the Utah state agency, debit card fees, such as ATM fees 

that clients may be charged to access their funds, have affected 

participation. Officials in Connecticut and Utah said that their agencies 

have tried to increase participation through repeated educational efforts, 

such as periodically distributing brochures and letters. In Utah, officials 

said these efforts typically increase participation 10 percent to 15 percent

after each campaign. Similarly, Connecticut officials also described 

outreach efforts to increase participation and estimated that about 

30 custodial parents had enrolled in direct deposit each week in state 

Page 27 GAO-06-491 Child Support Enforcement
fiscal year 2005. Other state agencies, such as North Dakota and Puerto 

Rico, have sought to attain the maximum participation possible by 

requiring clients to choose either direct deposit or debit cards. 31

State agencies reported savings and other benefits after implementing the 

10 initiatives listed in our survey. For example, New York reported saving 

$4.5 million since fiscal year 1993 after implementing electronic transfer of 

wages withheld by employers for child support payments, and Texas 

estimated that by providing online training for its staff, the state agency 

had saved $650,000 since fiscal year 2001. Also, officials in Connecticut 

stated that direct deposit costs them 17 cents per payment, while issuing a 

paper check costs about 61 cents to produce and mail.32 In addition to cost 

savings, states can realize other benefits from implementing these 

initiatives, such as time savings from quicker processes, enhanced 

customer service, or the opportunity to use staff for other program needs. 

Our 2004 report found that debit cards can help states avoid or minimize 

the problem of undistributed collections—funds that were delayed or 

never reached families.33 Also, debit cards ensured receipt of child support 

payments during Hurricanes Katrina and Rita, according to agency and 

federal officials. Additionally, payments that are transferred electronically

can be credited to multiple cases simultaneously, according to Utah state 

agency officials. 

 31 States that require the use of debit cards or direct deposit generally allow exemptions for 

various reasons, according to an OCSE official. For example, in some states, exemptions to

the use of direct deposit may be granted for clients with language barriers and for certain 

international cases. Reasons cited by an OCSE official for exemptions to the requirement 

for debit cards include situations where some minor parents are denied debit cards by 

private vendors hired to administer the process, or some parents that have difficulty using 

a debit card because they live in a remote location or have disabilities, and for some cases 

that involve limited payments such as cases in which a payment is made once a year when

a tax refund is intercepted. 

32 According to state agency officials from Connecticut, the state agency has a single 

contract for the implementation of multiple initiatives and estimated savings of about

$100,000 a month, but did not provide cost saving estimates for each initiative. Also, the

officials estimated additional costs savings of another $100,000 a month after full 

implementation of the initiatives. 

33 GAO, Child Support Enforcement: Better Data and More Information on Undistributed

Collections Are Needed, GAO-04-377 (Washington, D.C.: Mar. 19, 2004). 

Page 28 GAO-06-491 Child Support Enforcement
Table 6: Cost-Saving Initiatives State Agencies Reported Implementing and Estimated Cost Savings Reported by State 

Agencies, as of February 2006 

Cumulative savings

 (minimum and maximum) estimated by

 any state agency and implementation year

a

Initiative name and description

Year first 

implemented

by any state 

agency

Number of state 

agencies that 

reported 

implementing this

initiative Minimum Year Maximum Year

Electronic fund transfers between 

states for interstate cases 1991 52 $30,000 2001 $650,000 2001

Automated voice response systems 

to handle child support inquiries 24 

hours a day, 7 days a week, without 

personalized service 1990 48b

200,000 2000 72,000,000 1996

Direct deposit of child support

payments to custodial parents’

checking or savings accounts 1989 48b

15,000 2004 7,000,000 2003

Electronic methods for noncustodial 

parents to transmit payments 1989 38b

600 2003 30,000 2001

Electronic receipt of wages withheld 

by employers 1990 50b

325,000 1998 4,500,000 1993

Web site that permits custodial or 

noncustodial parents to access or 

update their file information 1999 29 24,000 2002 10,000,000 2002

Debit cards that allow custodial 

parents to access their child support 

payments electronically 2000 27 5,700 2005 3,000,000 2005

Child support training conducted via 

the Internet/intranet for child support 

staff 1993 22 10,000 2002 650,000 2001

Automated address change service 

available through the U.S. Postal 

Service 1996 11 100,000c

2004

Contracts for management of nonIV-D casesd

 1996 9 $0e

Source: GAO survey. 

a

A few state agencies reported zero cost savings for certain initiatives, but expected future cost

savings. In addition, many state agencies reported that cost savings were unknown for several 

initiatives.

b

California is included in the total number of state agencies implementing these initiatives; however, at 

the time our survey was administered, implementation was limited to certain counties.

c

Only 1 state agency provided an estimate of cost savings for this initiative. 

d

Non-IV-D cases are those for which the state agency is not providing, or has not previously provided,

services under the state’s TANF, child support, foster care, or Medicaid programs. 

e

Two state agencies provided an estimate for this initiative, and, in both cases, the estimated cost 

savings was zero. 

Page 29 GAO-06-491 Child Support Enforcement
Most state agencies (38) reported that they reinvested the savings from 

implemented initiatives in the CSE program. For example, state agency 

officials we interviewed in Connecticut and Utah told us that once 

resources are no longer needed for developing and implementing a new 

initiative, they reallocate these resources to other tasks. In Utah, a state

agency official with whom we spoke estimated that by implementing an 

automated voice response system and a customer service Web site and by 

providing training on how to answer clients’ inquiries efficiently, the state

agency was able to shift four full-time staff who formerly handled 

customer service calls to other projects. Conversely, five state agencies 

reported that they did not reinvest their savings. For example, the Nevada

state agency reported that savings were returned to the state general fund

per state requirements, and the Vermont state agency reported that in 

some cases state funding for the program was reduced by the amount of 

the savings.

Additionally, state agency officials told us about other practices that they 

implemented to reduce costs, beyond the initiatives specified in our 

survey. For example, in Connecticut, the state agency has adopted 

practices as varied as using videoconference facilities to allow 

caseworkers to attend hearings that can help reduce travel costs and 

printing double-sided notices to clients. In Utah, the state agency has 

automated notices to noncustodial parents regarding pending wage 

withholding. In Virginia, the state agency automated intercept of 

unemployment insurance payments in fiscal year 2003 and reported total 

costs savings of $240,000 as a result. The Georgia state agency reported 

implementing Internet-enabled voice communication to reduce telephone 

costs. 

OCSE Has Taken Steps to 

Help State Agencies 

Manage Costs 

OCSE issued guidance and awarded grants to state agencies to help them 

manage costs. OCSE issued guidance on a wide range of topics addressing 

program operations that may directly or indirectly lead to cost savings. For 

example, OCSE has issued guidance on electronic disbursement of 

payments, criteria for closing cases, multistate financial institution data 

matches, and review and adjustment of support orders.34 In addition, OCSE 

has awarded grants to help state agencies develop and implement certain 

initiatives. For example, in fiscal year 2002, OCSE awarded Indiana a

$100,000 grant to investigate the use of debit cards to reduce undistributed 

 34 69 Fed. Reg. 77659 (Dec. 28, 2004) and OCSE’s Policy Interpretation Question 04-02. 

Page 30 GAO-06-491 Child Support Enforcement
collections, Texas a $71,630 grant to develop electronic payment methods 

for noncustodial parents, North Carolina a $200,000 grant for an outgoing 

automated voice response system to send reminders to clients, and 

Colorado a $100,000 grant for Web-site technology to increase customer 

services. 

OCSE has created several work groups consisting of federal and state 

agency officials to address specific issues of concern to all state agencies. 

Some examples of these federal/state work groups are discussed as 

follows: 

• Work group on a Standardized Electronic Wage Withholding Order: 

OCSE convened a work group in 2004 to develop a standardized 

method for the electronic transmission of wage withholding orders to 

employers. The work group was composed of representatives from 

state and tribal child support enforcement agencies, employers, federal 

agencies (Social Security Administration, Department of Defense, and 

the United States Postal Service), and a large payroll processing 

company. This work group developed, among other things, a draft 

electronic wage withholding order for state agencies to notify 

employers of a wage withholding action. According to OCSE, 

electronic transmission of wage-withholding orders will increase 

processing efficiency and improve the speed with which payments are 

made to families and also reduce the cost of postage and processing 

paper documents. 

• The National Judicial/CSE Collaboration Work Group: OCSE

convened this work group in 2004 to help improve collaboration 

between child support enforcement agencies and courts. This work 

group’s goals include improving case processing and facilitating 

electronic data and document exchange between state agencies and 

courts. 

• National Child Support Enforcement Training Work Group: This 

work group met in 2005 to identify training needs and resources 

available to address strategies in the Strategic Plan. The goal is to 

develop a strategy for meeting training needs in order to improve 

program results and customer services at all levels. 

Also, OCSE has facilitated information exchanges in other ways. OCSE 

has sponsored conferences and invited representatives from state agencies 

who have experience with specific initiatives to appear on panels to share 

ideas with representatives from other state agencies. According to an 

OCSE official, OCSE is working with state agencies to add information 

Page 31 GAO-06-491 Child Support Enforcement
about various initiatives to its existing automated systems certification 

guide. State agencies interested in implementing certain initiatives will be

able to consult the guide to learn from what others have done. The guide 

will also have information about the availability of grants to help states 

implement the initiatives. According to this official, the first draft of the 

amended guide will be available to the state agencies for comment in June 

2006. In addition, OCSE held telephone conferences with state agencies on

specific subjects. For example, according to an OCSE official, OCSE 

arranged a teleconference in February 2006 to enable state agencies that 

had implemented debit cards to share their experiences and expertise with 

state agencies interested in implementing them. OCSE officials noted that 

they also distributed CD-ROMs to state agencies with information on the 

Web-based customer service practices of 6 state agencies. 

Generally, state agencies responding to our survey viewed OCSE 

assistance favorably. In particular, as shown in table 7, nearly all of the 

state agencies reported that OCSE’s efforts to create federal/state work 

groups, hold conferences or sponsor training, issue guidance, and 

facilitate information exchange were very or moderately helpful. 

Page 32 GAO-06-491 Child Support Enforcement
Table 7: States Agencies’ Views about OCSE’s Efforts to Help Them Manage

Program Costs 

OCSE efforts 

Number of state agencies

 rating OCSE’s assistance as

 very or moderately helpful

Creating federal/state work groups (such as the medical 

support, interstate, or undistributed collections work 

groups) 49

Holding or sponsoring conferences or training 48

Issuing guidance 47

Facilitating the sharing and exchange of information 

(e.g. the Compendium of Best Practices, the OCSE 

Web site, or the newsletter) 44

Leading special projects (such as projects in the area of 

interstate case reconciliation, medical support, and 

other projects) 41

Conducting annual planning document reviews for 

system modifications/upgrades 36

Providing special technical assistance (e.g. 

performance reviews to help states automate, reviews 

to help assess cost savings associated with certain 

enforcement tools, and other reviews) 31

Awarding grants for state projects (e.g. Special 

Improvement Projects) 27

Source: GAO survey. 

OCSE Has Conducted a 

Limited Number of 

Administrative Cost Audits 

Although OCSE is required to perform audits to determine whether federal 

and other funds made available to carry out the state program are being 

appropriately expended, OCSE has not conducted administrative cost 

audits in most states. From March 2004 to March 2006, OCSE issued eight 

administrative cost audit reports--an average of 4 per year. The issued 

reports show that all of the audits were limited in scope and all raised 

questions about inappropriate expenditures. For example, one audit of 

costs claimed for one quarter found that the federal government paid 

approximately $670,000 for unallowable collection costs and litigation 

settlements claimed by the Texas state agency. Another audit that 

examined expenses claimed for one quarter recommended that the 

Vermont state agency reimburse the federal government $603,057 for 

failing to properly report interest income and abandoned property as 

program income and claiming costs not related to the CSE program. Table 

8 summarizes the administrative cost audits completed as of March 2006.

Page 33 GAO-06-491 Child Support Enforcement
Table 8: OCSE’s Administrative Cost Audits Completed from March 2004 to March 2006 

State 

Agency Date of report Scope of audit Major findings

Florida March 2, 2004 Analysis of cooperative agreement 

costs charged by the CSE program. 

The audit recommended that all cooperative agreement 

costs claimed, in the amount of $75.3 million, be 

questioned until further studies are conducted. 

Arkansas February 16, 2005 Salary, fringe benefits, automated data 

processing costs, fund transfers, and 

genetic testing fees claimed on the state 

agency’s expenditure report for one 

quarter covering April 1, 2004, to June 

30, 2004. 

The state agency had claimed salary and fringe benefit 

costs for personnel not working for the CSE program, 

claimed fund transfers to the state treasurer that were 

not CSE expenditures, and incorrectly reported 

recouped genetic testing fees in the amount of 

$614,861 that the agency later refunded to the federal

government. 

Texas July 20, 2005 Non-IV-D costs and settlement charges 

claimed on the state agency’s 

expenditure report for the quarter ended 

June 30, 2004. 

The state agency incorrectly claimed non-IV-D costs for 

processing collections and claimed costs of a lawsuit 

settlement totaling $670,253 that were not associated

with the normal activities of the CSE program. 

Vermont February 7, 2006 Expenses claimed for one quarter on 

the state agency’s expenditure report 

under the category of program income 

as well as other selected costs. 

The state agency failed to properly report interest 

income and abandoned property as program income 

and included costs not related to the CSE program 

totaling $603,057. In addition, $92,000 was being 

questioned. 

Connecticut February 8, 2006 Expenses claimed for one quarter on 

the state agency’s expenditure report 

under the category of cooperative 

agreement and other selected costs. 

The audit found that the state agency improperly 

claimed funds totaling $525,605 for payments to 

employees either retiring or terminating employment 

and for contractual services and commodities. The audit 

recommended that $346,899 be refunded to the federal

government. 

New Jersey February 22, 2006 Costs claimed on the state agency’s 

expenditure report for the period of April 

1, 2003, through March 30, 2004. 

The audit found that $1,423,288 of costs claimed by the 

state agency was either not allocable or allowable under 

federal cost principles and regulations and 

recommended that $939,370 be refunded to the federal

government. 

Alabama March 1, 2006 Certain costs claimed on the state 

agency’s expenditure report for the 

quarter ended June 30, 2005. 

The audit found the state agency claimed advertising 

and legal services costs that did not benefit the CSE 

program and, thus, was not allowable. As a result, the 

state agency refunded $17,010 to the federal 

government. 

New Mexico March 13, 2006 Selected costs claimed by the state 

agency for the quarters ended June 30, 

2002, through March 31, 2005. 

The audit identified $270,316 in overcharges by the 

state agency and recommended that the agency refund 

$140,983 to the federal government. 

Source: GAO analysis of OCSE cost audit reports. 

An OCSE official explained that OCSE completed a limited number of 

administrative costs audits because most of its resources were devoted to 

completing data reliability audits associated with the federal incentive

payments. In fiscal year 2004, OCSE notified state agencies that it would 

not perform data reliability audits annually but would conduct audits 

Page 34 GAO-06-491 Child Support Enforcement
every 2 or 3 years, based on prior audit results. In addition, the notice

indicated that this approach would increase the resources available to

conduct other audits. According to an OCSE official, additional 

administrative cost audits have not been planned and that unless OCSE 

gets more audit resources, it is likely that few administrative cost audits

will be conducted. This official also explained that OCSE has added 

reviews related to medical support in anticipation of a medical support 

incentive payment measure and this effort has taken resources from other 

audit work. 35 In commenting on a draft of this report HHS informed us 

that OCSE’s approach for conducting fewer data reliability audits has not 

yet increased available audit resources. 

OCSE’s audit plan identifies several types of audits and reviews and shows 

that most of the planned audits are not administrative cost audits. The 

plan lists 16 administrative cost audits—also referred to as limited cost 

audits, as well as 37 data reliability audits, 17 data reliability reviews, 

4 paternity audits, and 36 medical support reviews.36, 37 According to an 

OCSE official, the audit plan needs to be updated to reflect current 

information and status of the assignments. 

While OCSE has conducted few administrative cost audits, others have 

conducted audits of the CSE programs, and although some of these audits

addressed administrative cost issues, generally they had a broader focus.

For example, at the federal level, the CSE program is audited as part of the 

annual financial statement audit of HHS. Financial statement audits of 

federal entities are intended to provide decision makers with assurance as

 35Under the Child Support Enforcement Amendments of 1984, HHS was required to issue 

regulations to require state agencies to petition for the inclusion of medical support as part 

of any child support order whenever health care coverage is available to the noncustodial 

parent at a reasonable cost. Over the years other legislation has been enacted to facilitate 

state agencies’ attempts to secure and enforce medical coverage for children. A medical 

child support working group was established and issued a report that contains 76 

recommendations, including one that Congress amend Federal law to require that the 

medical support incentive measure is developed in conjunction with the implementation of 

certain requirements established in CSPIA. In addition, OCSE’s strategic plan for 2005 to 

2009 identifies medical support as a possible future incentive measure. 

36 In commenting on a draft of this report, HHS stated that OCSE is required to perform a 

data reliability review each year for those state agencies that are not receiving a data

reliability audit and that while reviews consume less time than an audit, reviews require a 

significant amount of time and resources. 

37 According to an agency official, the paternity audits are done when a state agency’s data 

fails the data reliability audit and then resubmits the data in a subsequent fiscal year. 

Page 35 GAO-06-491 Child Support Enforcement
to whether the financial statements are reliable, internal control is 

effective, and laws and regulations are complied with. In addition, 

statewide single audits assess whether states have complied with 

requirements in up to 14 managerial or financial areas, including allowable 

activities, cash management, and eligibility. However, in our review of 

TANF and Child Care programs, we found that single audits were limited 

in scope and varied in how they were conducted, state by state.38

Furthermore, the HHS Office of Inspector General (IG) and state auditors

have completed audits of the CSE program. From fiscal years 2000 to 2005

the IG issued 13 audit reports that focused on the CSE program, and 2 of 

these reports focused on administrative cost issues. For example, 1 audit 

of Ohio’s CSE program found contracting deficiencies and overcharges. 

We reviewed selected state auditors’ reports of CSE programs from 5 of 

the 6 states we visited, and found that 3 of these reports included some 

findings related to administrative costs, automated data systems, or 

internal control.39, 40 For example, the audit of the Connecticut program 

found that the state had not properly allocated all related costs. An OCSE 

official stated that, as part of its standard procedures for planning 

administrative cost audits, its auditors consider the significance and 

materiality of findings disclosed in previous audit reports, both OCSE and 

other sources, such as the State Auditor, IG, as well as any single audit

reports that may have been performed. Also, according to comments from 

HHS on a draft of this report, OCSE develops an audit plan that first 

considers staff availability and then prioritizes which state agencies to 

audit based on several factors such as requests from the ACF regional 

 38GAO, TANF and Child Care Programs: HHS Lacks Adequate Information to Assess Risk 

and Assist States in Managing Improper Payments, GAO-04-723 (Washington, D.C.: June

18, 2004). 

39 According to agency officials, a statewide review of Ohio’s CSE program was not 

available because audits are done at the county level. 

40 The five standards for internal control are (1) control environment—management and 

employees should establish and maintain an environment throughout the organization that

sets a positive and supportive attitude toward internal control and conscientious 

management; (2) risk assessment—internal control should provide for an assessment of 

the risks the agency faces from both external and internal sources; (3) control activities—

activities that help ensure management’s directives are carried out-- should be effective and 

efficient in accomplishing the agency’s control objectives; (4) information and 

communications—information should be recorded and communicated to management and 

others within the entity who need it and in a form and within a time frame that enables 

them to carry out their internal control and other responsibilities; and (5) monitoring—

internal control monitoring should assess the quality of performance over time and ensure

that the findings of audits and other reviews are promptly resolved. 

Page 36 GAO-06-491 Child Support Enforcement
offices, issues identified during data reliability audits, knowledge of 

possible problems from other sources and how long it has been since the 

prior audit. OCSE officials did not cite the level of expenditures for 

administrative costs as a factor that was considered in planning 

administrative cost audits. 

In addition to the changes made by the Deficit Reduction Act of 2005 that 

will affect federal expenditures for the CSE program, there may be other 

opportunities to reduce the federal expenditures for the CSE program. 

Although many state agencies reported implementing several initiatives 

that have resulted in savings, most state agencies reported that they have

reinvested funds in other CSE program areas. As such, state agencies have 

not used savings from implemented initiatives to reduce administrative 

costs. State agencies also reported that several of the cost categories that

were major contributors to federal expenditures for administrative costs 

were related, at least in part, to the number of FTEs devoted to the 

program, including state and local CSE agency personnel; staff from other 

state and local agencies that provide services under cooperative 

agreements; and contractors. Although OCSE has established minimum 

organizational and staffing requirements, OCSE has not conducted a study 

to establish FTE or staffing guidelines to determine whether there are 

additional opportunities to improve the efficiency of the CSE program and 

reduce administrative costs. 

Conclusions 

Furthermore, OCSE has not conducted administrative cost audits in most 

states. Of the administrative cost audits recently completed by OCSE, all 

have raised questions about inappropriate expenditures or unallowable 

costs. Nonetheless, most of the completed and planned audits are focused 

on incentive payment data and indicators, and although OCSE expects to

have more resources available to conduct audits, it does not plan to use 

these resources to conduct more administrative cost audits. The audits 

related to the incentive payments are important, however many more 

federal dollars have been spent for administrative costs, and the federal 

expenditures for administrative costs have been increasing and are not 

capped. From the federal government’s perspective, more focus on 

administrative cost audits would be a prudent use of resources. Also, in 

developing its plans for administrative cost audits, OCSE officials did not

cite total expenditures for administrative costs as a factor in determining 

which state agencies to audit. Without conducting administrative cost 

audits in more states, and without a plan for conducting audits based in 

part on the level of expenditures, OCSE cannot ensure that federal funds 

have been appropriately spent. 

Page 37 GAO-06-491 Child Support Enforcement
To help manage the administrative costs for the child support enforcement 

program and ensure federal funds are being appropriately spent, we are 

making three recommendations. We recommend that the Secretary of 

Health and Human Services direct the Commissioner of OCSE to 

• conduct a study of and develop guidelines for the number of full-timeequivalent employees, 

• direct resources gained from conducting fewer data reliability audits 

for the incentive payments to completing more administrative cost 

audits, and 

• develop an audit plan that considers total expenditures as one of the 

factors used to select state agencies for administrative cost audits. 

We received written comments on a draft of this report from HHS. These 

comments are reproduced in appendix VII. HHS also provided technical 

comments, which we incorporated when appropriate. 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 

HHS did not explicitly agree or disagree with our recommendations. In 

response to our recommendation to conduct a study of and develop 

guidelines for the number of full-time-equivalent employees, HHS stated 

that OCSE will consider doing such a study. HHS also noted that OCSE 

issued a report that reviewed collections, expenditures, caseload, and 

other data by full-time-equivalent employees for the 1997 and 1998 time 

frame. We reviewed this report and determined that while it summarizes 

these data, it does not address guidelines. 

In response to our recommendation to develop a plan to conduct 

administrative cost audits, HHS commented that OCSE has developed 

plans to conduct administrative cost audits in the past, has conducted 

those audits, and will continue to develop plans in the future. We revised 

the report to acknowledge that OCSE has a plan for conducting 

administrative cost audits as well as other audits and to incorporate 

information from the technical comments about the plan. Additionally, we

modified this recommendation to better reflect our intent to encourage 

OCSE to complete more administrative cost audits than it completed 

during the 2004 to 2006 time period and to consider total expenditures for 

administrative costs when planning these audits. In light of our finding 

that all of the completed administrative cost audits have identified 

inappropriate or unallowable expenditures, additional audits are needed to

help ensure that federal funds are used appropriately. 

Page 38 GAO-06-491 Child Support Enforcement
HHS also identified several areas that needed further clarification. HHS 

suggested that we explain that the CSE program locates custodial parents 

and that custodial as well as noncustodial parents may apply for services. 

We modified the report to include these facts. HHS also said that the 

report does not note that staffing declined since fiscal year 2003. We did 

not make any changes in response to this comment since data in the report 

show this decline. In addition, HHS commented that we did not discuss 

the relationship between spending and performance and referred to the 

findings in a report done by the Lewin Group, Inc. We did not include an 

analysis of the relationship between spending and the performance 

measures because that analysis was beyond the scope of our work for this 

review. As for the Lewin report, we did not include findings from this 

report because they were based on fiscal year 1997 data, and the report 

includes a statement that the findings should be interpreted carefully 

because of several problems associated with measures that are proxies for 

performance, data quality, missing variables, and other factors. 

Additionally, the HHS comments pointed out that our report did not 

include certain provisions in the Deficit Reduction Act of 2005 or mention 

estimated income or savings related to this act. We added this information 

to the report. 

We are sending copies of this report to the Secretary of Health and Human 

Services, Directors of state child support enforcement agencies in the 

states we visited, and other interested parties. In addition, we will make 

copies available to others upon request. Also, this report will be available 

at no charge on GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions about his report, please contact me 

at 202-512-7215 or AshbyC@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

listed in appendix VIII. 

Sincerely yours, 

Cornelia M. Ashby, Director 

Education, Workforce, and 

 Income Security Issues 

Page 39 GAO-06-491 Child Support Enforcement
Appendix I: 

Methodology 

Objectives, Scope, and 

Page 40 GAO-06-491

Appendix I: Objectives, Scope, and 

Methodology 

The objectives of this study were to determine (1) how total net federal 

expenditures for administrative costs have changed from fiscal year 2000

to fiscal year 2004, (2) the categories of cost that have contributed most to 

federal expenditures for administrative costs in recent years, and (3) steps 

state agencies have taken to manage costs and steps the Office of Child 

Support Enforcement (OCSE) has taken to help state agencies and to 

ensure federal funds have been used appropriately. 

In conducting our review, we used multiple methodologies. We 

(1) analyzed program data for all 54 state agencies for fiscal years 2000 to

2004; (2) conducted a survey of state agencies; (3) visited 6 state agencies; 

(4) interviewed OCSE and state agency officials as well as child support 

experts; and (5) reviewed relevant laws and regulations, pertinent reports 

and studies, and applicable OCSE policy and guidance documents. We 

conducted our work between June 2005 and June 2006 in accordance with 

generally accepted government auditing standards. 

To determine how net federal expenditures for administrative costs have

changed, we obtained data from the system that maintains information 

related to funds administered by Health and Human Services’ (HHS) 

Administration for Children and Families, including funds provided to 

state agencies. This system is known as the Grants Application Tracking 

and Evaluation System (GATES). Before analyzing the data, we took 

several steps to assess its reliability. We interviewed HHS officials 

responsible for managing GATES and obtained information about the 

system such as its purpose, the procedures to ensure that it captures all 

records, and tests or edit checks to assure that data are accurate. We also 

obtained copies of the system manual and system audit reports. Because 

the state agencies are the sources for the GATES data, we also interviewed 

state agency officials and asked them about reviews and routine audits of

the data, and we obtained copies of system audit reports as well as 

documents that summarized the procedures for ensuring data accuracy. 

Additionally, we compared expenditure data from several state agencies 

with data from GATES and found they were nearly identical. Furthermore, 

we reviewed results of OCSE’s data reliability audits of state agencies’ 

data related to the performance incentive measures, including collections, 

and cost-effectiveness ratios. On the basis of these steps, we determined 

the data from GATES were sufficiently reliable for the purposes of this 

report. 

Objectives 

Scope and Methodology 

Analyses of Program Data 

We obtained and analyzed several sets of state CSE program data for fiscal

years 2000 to 2004. We analyzed the net federal share of state expenditures 

Child Support Enforcement
Appendix I: Objectives, Scope, and 

Methodology 

and calculated the percentage change and the median amounts. 

Additionally, we examined other program data to gain some perspective 

about changes in the net federal expenditures for administrative costs. 

Specifically, for fiscal years 2000 to 2004, we examined collections, 

number of cases, the cost-effectiveness ratios, and the number of full-timeequivalent employees. To determine the cost per case, we used the total 

number of cases at the end of each fiscal year and the nominal net 

expenditures for each year. We calculated the median amounts for 

expenditures and collections because of the wide variation among state 

agencies. Since the data span a 5-year period, we considered it 

appropriate to adjust the expenditure and collection data for inflation, 

using the price index for the U.S gross domestic product when the analysis 

covered a period of years. These data, in 2004 dollars, were used in 

discussing trends in net federal expenditures for administrative costs and

collections. However, when we calculated percentage changes from year 

to year, we used nominal dollars to be consistent with data previously 

reported to Congress. 

We designed and administered a survey to all 54 state agencies. The survey

asked state agencies to identify the administrative cost categories in which 

they incurred costs during fiscal years 2002 to 2004 and to estimate the 

percent of the state’s administrative costs for the five categories that 

accounted for the largest percentages. The survey also asked state 

agencies whether they had implemented 10 cost-saving initiatives and, if 

so, when each was implemented and what the cost savings had been, if 

any. We selected these 10 cost-saving initiatives after reviewing OCSE’s 

Compendium of State Best Practices and Good Ideas in Child Support 

Enforcement for 2001, 2002, and 2003—the most recent years available at 

the time of our review. We selected initiatives that had demonstrated 

dollar savings or the potential for dollar savings. The last section of the 

survey asked state agencies to rate how helpful certain OCSE efforts had 

been in reducing or minimizing their administrative costs and if there were 

other actions OCSE could take to help state agencies reduce or minimize 

administrative costs. Surveys were sent via an e-mail as a MSWord 

attachment in November 2005, and all 54 state agencies sent in responses 

by February 2006. 

Survey of State Agencies 

Because we received responses from all of the state agencies, our results 

are not subject to sampling error. However, the practical difficulties of 

conducting any survey may introduce other types of errors, commonly 

referred to as nonsampling errors. For example, differences in how a 

particular question is interpreted and the sources of information available 

to respondents in answering a question can introduce unwanted variability 

Page 41 GAO-06-491 Child Support Enforcement
Appendix I: Objectives, Scope, and 

Methodology 

into the survey results. We included steps in both the data collection and 

data analysis stages to minimize such nonsampling errors. For example, 

the survey instrument was developed by a GAO survey specialist in 

collaboration with staff knowledgeable about the CSE program. In 

addition, the survey was reviewed by another GAO survey specialist and

pretested telephonically with two state agencies to develop a survey 

instrument that was relevant, easy to comprehend, unambiguous, and 

unbiased. We made changes to the content and format of the survey 

instrument based on the review and the results of the pretests. To further 

reduce nonsampling error, respondents entered their responses directly 

into the survey instrument and returned them electronically. Responses 

were then reviewed by GAO staff for completeness and internal 

consistency, and when data seemed questionable, we followed up with 

state agency officials for clarification.

Survey responses were then keypunched into the database used for 

analysis and these data were 100 percent verified for accuracy of data

entry. When the data were analyzed, a second, independent analyst 

checked all computer programs. 

We visited state agencies in 6 states—California, Connecticut, Maryland, 

Ohio, South Carolina, and Utah. We selected these states because they 

represented diversity in changes in federal expenditures during fiscal 

years 2002 to 2004, geographical location, and operational structure (stateor county-operated). During these visits, we interviewed state officials and 

obtained their opinions and perspectives about key issues. We discussed 

administrative cost trends for their state, the categories of cost that 

contributed most to their total administrative costs, and steps taken to 

reduce costs, including implementing the cost-saving initiatives. We also 

collected administrative cost data for fiscal years 2002 to 2004, state 

agency policies and procedures, and relevant reports. 

Visits to State Agencies 

We interviewed many CSE program officials and representatives from 

various organizations to learn more about each of the objectives. We 

interviewed several key OCSE officials, including the Commissioner, 

Director of the Office of Audits, Director of State and Tribal Systems, and 

the Director of the Planning, Research and Evaluation Division. Several of

these interviews focused on OCSE’s efforts to help states manage their 

administrative costs and their efforts to help ensure that federal funds 

were used appropriately. In addition, we obtained their views on reasons 

the expenditures have increased and the factors that have contributed 

most to these increases. We also discussed our objectives with

representatives from the National Child Support Enforcement Association 

Interviews of officials,

representatives, and experts 

Page 42 GAO-06-491 Child Support Enforcement
Appendix I: Objectives, Scope, and 

Methodology 

and the National Council of Child Support Directors. These discussions 

covered each of the objectives and the participants shared their views and 

insights. For example, the participants expressed their opinions about 

personnel costs as a major contributor to administrative costs, various 

cost-saving initiatives, and OCSE’s efforts to help state agencies. In 

addition, we interviewed experts and professionals with extensive 

knowledge of the child support program. Specifically, we discussed the 

objectives with professionals from the Center for Law and Social Policy 

(CLASP) and the Urban Institute. 

During the course of this work, we obtained and reviewed numerous 

documents. We reviewed provisions in several laws that affected the CSE 

program, including, among others, the Personal Responsibility and Work 

Opportunity Reconciliation Act of 1996, the Child Support Performance 

and Incentive Act, and the Deficit Reduction Act of 2005. We examined 

OCSE’s policies and guidance, strategic plans, forms and instructions for 

reporting administrative costs as well as other OCSE reports and 

documents related to administrative costs. We obtained and reviewed 

documents and reports prepared by state agencies, the Congressional 

Budget Office, CLASP, the Congressional Research Service, the Urban 

Institute, and the Lewin Group and ECONorthwest. In addition, we 

reviewed several prior GAO reports. 

Reviews of laws, policies, and 

reports 

Page 43 GAO-06-491 Child Support Enforcement
Appendix II: Annual Percentage Changes in

Net Federal Expenditures, by State Agency, 

for Fiscal Years 2000 to 2004

Percentage change, by fiscal year 

State Agency 2000 to 2001 2001 to 2002 2002 to 2003 2003 to 2004

Alabama (8.4) 16.8 4.2 4.7

Alaska (3.0) (1.8) 5.4 (9.3)

Arizona (3.6) (2.2) (6.0) 7.7

Arkansas 17.0 18.3 (11.8) (9.9)

California 77.0 53.5 (5.2) 19.1

Colorado 2 6.2 16.7 (1.5)

Connecticut 1.8 17.9 (3) 49.0

Delaware 21.7 (16.3) 31.6 7.6

District of Columbia 25.7 (12.0) 39.7 (38.3)

Florida 10.6 (1.4) 2.6 8.6

Georgia 9 2 4.7 1.0

Guam 193.6 (29.8) (27.1) 22.1

Hawaii (51.4) 5.5 79.2 (58.2)

Idaho 12.8 (8.4) 3.8 6.0

Illinois 26.9 4.0 10.6 (8.1)

Indiana 33.6 (26.9) (20.3) 66.2

Iowa (19.9) 9.8 9.2 8.7

Kansas 36.0 (8.1) (18.8) 4.6

Kentucky 16.6 (15.4) 5.2 (14.2)

Louisiana 30.0 (5.0) (7.0) 8.7

Maine (355.0) 242.3 (93.3) 829.8

Maryland (12.5) 6.7 (4.3) 4.6

Massachusetts (27.2) (1.2) 16.0 27.1

Michigan 36.8 (5) (3.2) (12.8)

Minnesota 14.6 13.2 4.5 1.8

Mississippi (19.1) (7.2) (2.4) 1.9

Missouri (5.3) (19.2) 5.8 (1.2)

Montana (8.0) (20.7) 21.1 (2.7)

Nebraska 28.5 9.1 (6.7) (4.2)

Nevada (14.4) 15.3 (8) (1.4)

New Hampshire (1.8) 45.5 (15.7) (5.2)

New Jersey (3.3) 24.3 (8) 13.3

New Mexico 36.7 (19.3) 9.3 (16.5)

New York 6.1 48.3 (2.1) 21.8

North Carolina 4.8 7.7 (5) 8.1

Appendix II: Annual Percentage Changes in 

Net Federal Expenditures, by State Agency, 

for Fiscal Years 2000 to 2004 

Page 44 GAO-06-491 Child Support Enforcement
Appendix II: Annual Percentage Changes in

Net Federal Expenditures, by State Agency, 

for Fiscal Years 2000 to 2004

Percentage change, by fiscal year 

State Agency 2000 to 2001 2001 to 2002 2002 to 2003 2003 to 2004

North Dakota 16.9 (1.2) (3.9) 9.4

Ohio 28.8 (4.9) (9) (10.4)

Oklahoma 6.0 30.6 (6.0) (10.2)

Oregon (11.5) 17.1 12.6 (6.7)

Pennsylvania (10.4) 11.1 14.4 (5.1)

Puerto Rico 23.8 (4.5) 22.3 (23.7)

Rhode Island 37.4 23.5 (10.5) (9.3)

South Carolina 26.7 (18.7) (2.4) (8.8)

South Dakota 1.1 (13.3) 10.2 5.6

Tennessee (2.9) 23.3 (8.7) 10.1

Texas 13.6 28.0 13.3 (3.7)

Utah 4.2 (1.6) (1.8) 12.2

Vermont 26.7 8.0 13.4 (57.0)

Virgin Islands 63.1 (33.3) (9.6) 17.3

Virginia (16.7) 8.8 4.8 9.3

Washington 14.3 (4.7) 21.7 3.3

West Virginia (21.6) 2.3 17.1 12.7

Wisconsin 17.4 3.6 11.8 3.1

Wyoming 13.6 (17.7) (4.3) 18.8

Source: OCSE data. 

Note: Nominal dollars were used when comparing data from year to year in order to be consistent

with data previously reported to Congress. Parentheses indicate a decrease. 

Page 45 GAO-06-491 Child Support Enforcement
Appendix III: Annual Percentage Changes in 

Collections, by State Agency, for Fiscal Years 

2000 to 2004

Percentage change, by fiscal year 

State Agency 2000 to 2001 2001 to 2002 2002 to 2003 2003 to 2004

Alabama 4.2 5.3 5.9 1.4

Alaska 9.6 4.4 (2.4) 3.5

Arizona 7.9 8.1 1.7 6.1

Arkansas 1.4 5.5 5.0 6.9

California (3.5) (11.4) 21.0 2.1

Colorado 7.7 6.7 0.3 6.9

Connecticut 6.3 6.8 2.6 1.9

Delaware 9.0 11.4 3.4 3.5

District of Columbia 7.8 7.4 9.3 9.0

Florida 8.1 14.7 10.9 10.3

Georgia 6.0 8.3 9.3 2.6

Guam (3.3) 6.3 5.0 4.7

Hawaii 4.2 6.0 3.0 6.8

Idaho 16.4 9.4 7.7 7.6

Illinois 17.4 8.5 2.4 8.5

Indiana 2.0 17.3 (3.0) 6.1

Iowa 8.3 7.8 5.7 3.9

Kansas (8.6) 5.5 3.8 2.5

Kentucky 9.9 12.8 1.0 14.6

Louisiana 9.2 11.5 4.9 2.4

Maine 6.4 1.0 1.6 2.0

Maryland 3.1 4.5 3.3 4.5

Massachusetts 14.0 10.9 5.6 3.5

Michigan 2.8 4.2 (2.8) 7.0

Minnesota 7.3 4.9 4.0 1.6

Mississippi 9.5 6.9 3.6 4.0

Missouri 9.9 10.3 5.4 3.9

Montana 7.0 5.9 1.9 1.6

Nebraska 12.2 (10.4) 2.4 4.7

Nevada 6.0 8.8 9.0 8.1

New Hampshire 2.6 3.8 4.6 1.0

New Jersey 6.7 6.9 5.2 5.8

New Mexico 10.2 19.0 15.3 11.0

New York 4.2 12.2 4.0 (2.2)

North Carolina 8.8 8.9 5.8 6.3

Appendix III: Annual Percentage Changes in 

Collections, by State Agency, for Fiscal Years 

2000 to 2004 

Page 46 GAO-06-491 Child Support Enforcement
Appendix III: Annual Percentage Changes in 

Collections, by State Agency, for Fiscal Years 

2000 to 2004

Percentage change, by fiscal year 

State Agency 2000 to 2001 2001 to 2002 2002 to 2003 2003 to 2004

North Dakota 13.9 6.8 7.3 5.8

Ohio 3.6 10.7 (3.2) 4.5

Oklahoma 8.5 13.4 8.1 8.1

Oregon 9.2 1.8 4.8 3.2

Pennsylvania 7.3 6.4 1.9 1.1

Puerto Rico 7.1 8.0 9.8 3.5

Rhode Island 1.0 8.9 (1.4) 4.0

South Carolina 10.6 7.8 3.6 1.4

South Dakota 9.1 6.7 3.7 6.2

Tennessee 11.3 15.2 11.1 8.1

Texas 21.7 14.7 11.9 (3.0)

Utah 7.9 4.5 3.0 2.5

Vermont 5.1 2.0 1.7 15.3

Virgin Islands (4.8) 2.0 5.8 11.6

Virginia 15.9 8.3 7.0 5.9

Washington 4.4 3.1 1.1 (1.0)

West Virginia 14.0 10.2 3.9 9.0

Wisconsin 2.6 (1.6) 6.0 1.9

Wyoming 7.0 7.1 4.6 4.5

Source: OCSE data. 

Note: Nominal dollars were used when comparing data from year to year in order to be consistent

with data previously reported to Congress. Parentheses indicate a decrease. 

Page 47 GAO-06-491 Child Support Enforcement
Appendix IV: Percentage Changes in the CostEffectiveness Ratio by State Agency and

Nationwide 

Percentage change in the cost-effectiveness ratio from the previous fiscal year 

State Agency 2001 to 2002 2002 to 2003 2003 to 2004

Alabama (9.23) 3.85 4.50

Alaska 8.45 (5.57) 6.13

Arizona 3.16 5.18 (1.12)

Arkansas (6.01) 17.29 24.36

California (26.82) 20.94 (8.23)

Colorado 2.23 (12.02) 10.25

Connecticut (2.59) 7.45 (20.79)

Delaware 24.91 (17.21) (0.66)

District of Columbia 19.03 (22.30) 50.24

Florida 11.94 8.93 2.51

Georgia 7.07 5.42 4.47

Guam 23.31 28.05 7.62

Hawaii 6.01 (22.21) 71.26

Idaho 14.50 7.75 4.21

Illinois 12.00 (5.71) 21.97

Indiana 23.03 1.41 (11.00)

Iowa 6.83 (1.95) 1.27

Kansas 3.98 19.54 0.96

Kentucky 15.44 3.61 21.93

Louisiana 11.19 4.93 (1.37)

Maine (28.79) 16.59 (12.83)

Maryland (0.71) 8.11 0.88

Massachusetts 12.26 (5.37) (10.62)

Michigan (4.77) 4.36 13.15

Minnesota (1.94) 0.00 1.23

Mississippi 19.46 5.34 6.13

Missouri 21.52 6.91 9.09

Montana 4.86 (11.46) 8.54

Nebraska (14.33) 12.20 12.73

Nevada (11.42) 8.71 6.09

New Hampshire (19.07) 8.01 11.65

New Jersey (8.35) 4.76 (3.36)

New Mexico 36.45a7.53 19.11

New York (11.44) 11.36 (13.80)

North Carolina 9.65 12.64 0.40

Appendix IV: Percentage Changes in the CostEffectiveness Ratio by State Agency and 

Nationwide 

Page 48 GAO-06-491 Child Support Enforcement
Appendix IV: Percentage Changes in the CostEffectiveness Ratio by State Agency and

Nationwide 

Percentage change in the cost-effectiveness ratio from the previous fiscal year 

State Agency 2001 to 2002 2002 to 2003 2003 to 2004

North Dakota 12.41 8.28 5.29

Ohio 13.71 2.08 11.20

Oklahoma (3.45) 11.43 16.67

Oregon (11.76) (4.27) 10.18

Pennsylvania (1.86) (0.73) 3.09

Puerto Rico 13.79 (9.57) 38.98

Rhode Island 6.86 2.43 8.21

South Carolina 27.61 7.67 10.76

South Dakota (1.68) 2.77 (3.97)

Tennessee (9.82) 21.56 (5.67)

Texas 3.44 4.07 5.68

Utah 5.42 6.17 (1.21)

Vermont 0.77 (3.82) 11.64

Virgin Islands 41.07 16.46 (0.54)

Virginia 3.59 2.84 (2.91)

Washington 8.79 (8.28) (0.44)

West Virginia 4.96 (6.78) (2.64)

Wisconsin 0.83 (2.62) (0.67)

Wyoming 22.25 11.40 (7.36)

NATIONWIDE (1.90) 4.60 1.39

Source: OCSE.

Note: Parentheses indicate a decrease.

a

OCSE reported the data for 2001 as not reliable

Page 49 GAO-06-491 Child Support Enforcement
Appendix V: Percentages Reported by State 

Agencies for Most Frequently Cited Cost Appendix V Categories : Percentages Reported by State 

Agencies for Most Frequently Cited Cost 

Categories 

Category reported as largest cost category Category reported as one of five largest categories 

Administrative 

cost category

Number of 

state 

agencies 

Highest 

percentage

Lowest

percentage

Number of state 

agencies 

Highest 

percentage

Lowest

percentage

Personnel 38 80 30 49 80 3

Cooperative 

agreements 3 70 40 37 70 2

Automated data

systems 5 65 25 35 65 1

Contracts 3 68 49 41 68 1

Source: GAO survey. 

Page 50 GAO-06-491 Child Support Enforcement
Appendix VI: State Agencies’ Implementation 

of Certain Cost-Saving Initiatives 

Initiatives 

State 

Electronic 

receipt of

wages

withheld

by

employers 

Electronic 

methods for

noncustodial

parents to

transmit 

payments 

Direct 

deposit 

Debit 

cards 

Automated 

voicemail 

systems 

Web site to 

access or

update

case 

information

Automated 

address 

change

service 

Child 

support 

training 

via 

internet/ 

intranet 

Contracting

non-IV-D 

case 

registry 

Electronic 

fund 

transfers 

for 

interstate 

cases 

AL 9 9 9 9

AK 9 9 9 9 9 9 9 9

AZ 9 9 9 9 9 9 9 9

AR 9 9 9 9 9 9 9

CA 9a9 a9 a9 a

CO 9 9 9 9 9 9 9

CT 9 9 9 9 9 9 9

DE 9 9 9 9

DC 9 9 9 9 9

FL 9 9 9 9 9 9 9

GA 9 9 9 9 9 9 9

GU 9 9 9 9

HI 9 9 9 9 9

ID 9 9 9 9 9 9

IL 9 9 9 9 9 9 9 9 9 9

IN 9 9 9 9 9 9

IA 9 9 9 9 9 9 9 9 9

KS 9 9 9 9 9

KY 9 9 9 9

LA 9 9 9 9 9

ME 9 9 9 9 9

MD 9 9 9 9 9

MA 9 9 9 9 9 9 9 9

MI 9 9 9 9 9 9 9 9

MN 9 9 9 9 9 9 9 9

MS 9 9 9 9 9

MO 9 9 9 9 9

MT 9 9 9 9 9

NE 9 9 9 9 9 9

NV 9 9 9 9 9

NH 9 9 9 9

NJ 9 9 9 9 9 9 9

NM 9 9 9 9 9 9 9

Appendix VI: State Agencies’ Implementation 

of Certain Cost-Saving Initiatives 

Page 51 GAO-06-491 Child Support Enforcement
Appendix VI: State Agencies’ Implementation 

of Certain Cost-Saving Initiatives 

Initiatives 

State 

Electronic 

receipt of

wages

withheld

by

employers 

Electronic 

methods for

noncustodial

parents to

transmit 

payments 

Direct 

deposit 

Debit 

cards 

Automated 

voicemail 

systems 

Web site to 

access or

update

case 

information

Automated 

address 

change

service 

Child 

support 

training 

via 

internet/ 

intranet 

Contracting

non-IV-D 

case 

registry 

Electronic 

fund 

transfers 

for 

interstate 

cases 

NY 9 9 9 9 9 9 9 9 9

NC 9 9 9 9 9 9 9

ND 9 9 9 9 9 9 9

OH 9 9 9 9 9 9

OK 9 9 9 9 9 9

OR 9 9 9 9 9 9 9 9

PA 9 9 9 9 9 9 9

PR 9 9 9 9 9 9

RI 9 9 9 9 9 9

SC 9

SD 9 9 9 9 9 9

TN 9 9 9 9 9 9 9

TX 9 9 9 9 9 9 9 9

UT 9 9 9 9 9 9

VT 9 9 9 9 9 9

VI 9 9 9

VA 9 9 9 9 9 9

WA 9 9 9 9 9 9 9 9

WV 9 9 9 9 9 9 9 9

WI 9 9 9 9 9 9 9

WY 9 9 9 9

Source: GAO survey. 

a

Implementation of this initiative was limited to certain counties as of the time of our survey, 

December 2005.

Page 52 GAO-06-491 Child Support Enforcement
Appendix VII: Comments from the Appendix VII: Comments from the Department of Health and Human Services 

Department of Health and Human Services 

Page 53 GAO-06-491 Child Support Enforcement
Appendix VII: Comments from the 

Department of Health and Human Services 

Page 54 GAO-06-491 Child Support Enforcement
Appendix VII: Comments from the 

Department of Health and Human Services 

Page 55 GAO-06-491 Child Support Enforcement
Appendix VIII: 

A

GAO Contact and Staff 

cknowledgments 

Page 56 GAO-06-491

Appendix VIII: GAO Contact and Staff 

Acknowledgments 

Cornelia M. Ashby 202-512-7215 

In addition to the person named above, Carolyn M. Taylor, Assistant 

Director; Susan Higgins, Analyst in Charge; Tim Hall; Sheila McCoy, Chris 

Morehouse; Vernette Shaw; Wilfred Holloway; Cathy Hurley; Stu Kaufman; 

and James Rebbe made key contributions to this report. 

Child Support Enforcement

GAO Contact 

Staff 

Acknowledgments 

(130491) 
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