Child Support Enforcement: Families Could Benefit From Stronger
Enforcement Program (Chapter Report, 12/27/94, GAO/HEHS-95-24).

Greater federal leadership coupled with equally intensive state efforts
could help the national child support enforcement program to better
serve the families that depend on it. The dramatically rising number of
children needing support--the child support enforcement caseload soared
180 percent between 1980 and 1992--has focused attention on federal and
state efforts to force parents to support their children. However, these
efforts have been stymied by management weaknesses that keep the Office
of Child Support Enforcement (OSCE) from (1) effectively leading the
program and the states, (2) judging how well the program is working, and
(3) setting effective policies.  Although the federal role is
substantial--most program funding is federal--child support enforcement
is very much a state activity. Today, states face common problems, such
as increasing workloads that outpace resources, inadequate computer
systems, and fragmented authority and unstandardized procedures among
others. In response, states have developed a number of strategies,
including augmenting their staffs with volunteers and contracting with
private collection agencies, improving automation, and using innovative
enforcement techniques. Many welfare reform proposals would further
expand child support enforcement. Unless OSCE strengthens its management
of its current program, it may have difficulty implementing any new
responsibilities.

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

 REPORTNUM:  HEHS-95-24
     TITLE:  Child Support Enforcement: Families Could Benefit From 
             Stronger Enforcement Program
      DATE:  12/27/94
   SUBJECT:  Welfare benefits
             Aid to families with dependent children
             Public assistance programs
             Child support payments
             State-administered programs
             Federal/state relations
             Law enforcement
             Collection procedures
             Agency missions
             Strategic planning
IDENTIFIER:  HHS Child Support Enforcement Program
             AFDC
             OCSE Measuring Excellence Through Statistics Program
             California
             Delaware
             Arizona
             Iowa
             Kentucky
             Massachusetts
             New York
             Oregon
             Texas
             Virginia
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Federal Services, Post Office
and Civil Service, Committee on Governmental Affairs, U.S.  Senate

December 1994

CHILD SUPPORT ENFORCEMENT -
FAMILIES COULD BENEFIT FROM
STRONGER ENFORCEMENT PROGRAM

GAO/HEHS-95-24

Child Support Enforcement


Abbreviations
=============================================================== ABBREV

  ACF - Administration for Children and Families
  AFDC - Aid to Families With Dependent Children
  CSE - child support enforcement
  GPRA - Government Performance and Results Act of 1993
  HHS - Department of Health and Human Services
  METS - Measuring Excellence Through Statistics
  OCSE - Office of Child Support Enforcement
  OBRA'93 - Omnibus Budget Reconciliation Act of 1993

Letter
=============================================================== LETTER


B-250916

December 27, 1994

The Honorable David Pryor
Chairman, Subcommittee on Federal Services,
 Post Office and Civil Service
Committee on Governmental Affairs
United States Senate

Dear Mr.  Chairman: 

This report, prepared at your request, examines the national child
support enforcement (CSE) program at both the federal and state
levels.  It discusses federal program management issues and what some
state CSE programs are doing to overcome barriers hampering their
child support enforcement efforts.  The report makes recommendations
to the Secretary of Health and Human Services to improve CSE (1)
planning, (2) performance measurement, (3) federal accountability,
(4) audits, and (5) program funding structure. 

As arranged with your office, unless you publicly announce the
contents of this report earlier, we plan no further distribution
until 30 days from its issue date.  At that time, we will send copies
of the report to the Secretary of Health and Human Services; the
chairmen and ranking minority members of the House Subcommittee on
Human Resources, Committee on Ways and Means and the Senate Committee
on Finance; and other interested parties.  We also will make copies
available to others upon request. 

This report was prepared under the direction of Jane L.  Ross,
Director, Income Security Issues.  Please contact David P.  Bixler,
Assistant Director, at (202) 512-7201 if you have any questions. 
Other GAO contacts and major contributors to this report are listed
in appendix VI. 

Sincerely yours,

Janet L.  Shikles
Assistant Comptroller General


EXECUTIVE SUMMARY
============================================================ Chapter 0


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

Nonpayment of child support contributes to childhood poverty as well
as to increases in the number of families receiving welfare.\1 Today,
more than one-fifth of America's children live in poverty, and it has
been estimated that half will live in single-parent families at some
point in their lives. 

To help obtain the financial support noncustodial parents owe their
children and to help single-parent families achieve or maintain
economic self-sufficiency, the Congress established the
intergovernmental child support enforcement program in 1975.  In
1992, the federal Office of Child Support Enforcement (OCSE) reported
a nationwide caseload of about 15.2 million cases, about 60 percent
of which received welfare. 

The Chairman of the Subcommittee on Federal Services, Post Office and
Civil Service, Senate Committee on Governmental Affairs, asked GAO to
review the child support enforcement program to determine how the
federal government could improve services to the states and to the
families that depend on the program.  GAO's review focused on (1)
whether the program has essential management tools in place at the
federal level to fulfill its mission, (2) how well OCSE has fulfilled
its role in fostering the development of state child support
enforcement programs, and (3) what the state programs are doing to
overcome barriers hampering their efforts.  GAO also examined the
implications of welfare reform proposals and the impact of the
Government Performance and Results Act of 1993 (GPRA). 


--------------------
\1 In this report, "welfare" refers to cash assistance provided to
families under the Aid to Families With Dependent Children (AFDC)
program. 


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

The federal government and the states share child support enforcement
responsibilities.  OCSE, within the Department of Health and Human
Services (HHS), is responsible for providing leadership, technical
assistance, and standards to develop effective state programs, which
actually deliver child support enforcement services to families. 
Services include establishing paternity and support orders; locating
noncustodial parents; updating support orders to be current with a
noncustodial parent's income; obtaining medical support, such as
medical insurance, from noncustodial parents; and collecting support
payments.  To help ensure state program effectiveness, the federal
government uses a "carrot and stick" approach involving incentive
payments, audits, and penalties.  The federal government matches
about two-thirds of state program administrative costs and makes
incentive payments to states based on collections. 

Federal and state governments first became involved in child support
enforcement activities with the aim of recovering government welfare
costs.  Child support owed by noncustodial parents of families
receiving welfare was to be collected by state and local child
support programs and then returned to the government, with a small
portion going to the families.  As the number of families receiving
welfare rose in the 1970s, the Congress incorporated existing state
and local efforts into the national child support enforcement
program. 

Over time, the program expanded beyond the original aim of recovering
welfare because the Congress believed that early enforcement of child
support obligations could help prevent families' need for government
support.  For example, families that are not receiving welfare but
that request program services must be served equally. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

Greater federal leadership coupled with equally intensive state
efforts could better position the national child support enforcement
program to serve the families that depend on it.  Dramatically
increasing numbers of children needing support--the child support
enforcement caseload grew 180 percent between 1980 and 1992--are
focusing attention on federal and state efforts to enforce parents'
responsibilities to support their children.  However, these efforts
have been hampered by management weaknesses that keep OCSE from (1)
effectively leading the program and the states, (2) judging how well
the program is working, and (3) setting effective policies. 

Because of declining resources, OCSE has diminished the level of
technical assistance provided to state programs.  Also, various
organization and staffing changes have created communication problems
between federal and state program officials.  OCSE audits and data
collection efforts, while satisfying legal requirements for
monitoring and tracking the states' programs, do not provide either
OCSE or the states with adequate information on program results. 
Now, under the impetus of GPRA, OCSE is getting started on management
improvements that could position it to better serve states and
families.  OCSE has also proposed changing the incentive payment
structure to encourage improved state performance. 

While the federal role is substantial--most program funding is
federal--child support enforcement is very much a state activity. 
Today, states face common barriers such as increasing workloads that
outpace resources, inadequate computer systems, and fragmented
authority and unstandardized procedures among others.  In response,
states have developed a number of strategies, including augmenting
their staffs with volunteers and contracting with private collection
agencies, improving automation to help staff be more productive, and
using innovative enforcement techniques.  Some of the techniques
various states have adopted are (1) requiring employers to report
newly hired employees so parents who owe child support can be
located, (2) using central lien indexes and tax record matching so
parents' assets can be located, and (3) revoking driver's and
professional licenses to encourage parents to pay what they owe. 

Many welfare reform proposals would further expand child support
enforcement.  Unless OCSE takes steps to strengthen its leadership
and management of its current program, it may have difficulty
implementing any new responsibilities. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      THE CHILD SUPPORT
      ENFORCEMENT PROGRAM HAS
      LACKED ESSENTIAL MANAGEMENT
      TOOLS
-------------------------------------------------------- Chapter 0:4.1

The child support enforcement program has lacked certain essential
management tools to assess and improve current program performance. 
A well-articulated mission, programwide planning and goal-setting,
and accurate data on program performance have not been available to
guide program management. 

As the program expanded beyond welfare recovery, its mission became
increasingly less clear.  Legislative amendments expanded program
efforts to include families not receiving welfare and activities,
such as medical support enforcement, that do not focus directly on
collections.  In practice, this expanded mission has given the
program competing priorities--without guidance from the federal level
on how to manage those priorities. 

In the face of the program's expanded mission, OCSE's planning
efforts focused on the agency and its processes, not on outcomes for
either the national program as a whole or its own operations.  Nor
did these efforts seek input from key stakeholders, such as the
Congress and the states.  Only one national goal exists for the
program, and this is a congressionally mandated standard for state
performance in paternity establishment.  Now, in response to GPRA
requirements, OCSE is beginning a planning discipline that identifies
priorities and outcomes. 

The child support enforcement program has also lacked accurate and
consistent data that could be used to set goals for, assess, and
improve program performance.  Despite 20 years of required
performance reporting, OCSE has not developed universally understood
data definitions, and states collect data in ways that make
aggregation and comparison impractical.  OCSE and state officials
acknowledge that needed data are not available, and OCSE has taken
some actions on this issue.  However, as of December 1994, OCSE was
not in a position to know how the national program was actually
performing. 

In concept, federal incentive payments reward state programs
according to performance, but this funding mechanism has yet to
achieve its potential.  In practice, all states--regardless of
performance--have received some incentive payments.  Moreover, the
amount of incentive payments depends on a state's collections and
does not reflect other important activities, such as paternity
establishment and medical support enforcement.  The impact of the
incentives is limited because states are not required to use
incentive funds to expand their child support enforcement activities. 
Some states have used incentive payments for activities other than
child support enforcement; others have used federal payments to
offset the state part of matching funds for child support
enforcement, according to a 1991 report by HHS' Office of the
Inspector General. 


      OCSE HAS NOT EFFECTIVELY
      FOSTERED STATE PROGRAM
      DEVELOPMENT
-------------------------------------------------------- Chapter 0:4.2

As the Congress originally envisioned it, OCSE's role included
fostering state program development by providing technical assistance
and training, developing standards, and exercising federal oversight
through audits.  As HHS experienced workforce reductions in the
1980s, however, OCSE resources diminished.  Technical assistance and
training, which had formed a large part of OCSE efforts, virtually
disappeared.  In several instances, regulations were finalized after
the effective dates of a law.  In addition, an HHS-wide
reorganization left OCSE with no organizational control over those
HHS regional staff serving as contact points for the states on some
program matters.  State program staff had to contact various offices
within HHS for different child support enforcement matters, and
miscommunications between OCSE, HHS regional staff, and state program
staff contributed to strained working relationships. 

By the early 1990s, OCSE's monitoring role had come into greater
prominence, with more than half of remaining OCSE staff devoted to
compliance audits.  These audits focused on state compliance with
federal requirements for administrative procedures and service
delivery rather than on outcomes of state actions, such as how many
paternities or support orders were established.  State program staff
said that while some audits had helped them gain state legislative
support, the audits concentrated too much on administrative details
and were too untimely to be a useful management tool for them, with
audit reports sometimes issued 2 years after the period audited. 

OCSE recognizes that while the audits have spurred state actions, the
audit approach needs to be changed to provide better insight into
state program performance.  OCSE is seeking to shift the emphasis
from compliance with administrative procedures to ensuring state data
integrity.  OCSE, however, believes that this shift will require a
legislative change. 


      STATE CHILD SUPPORT
      ENFORCEMENT PROGRAMS FACE
      COMMON BARRIERS, USE
      MULTIPLE STRATEGIES
-------------------------------------------------------- Chapter 0:4.3

Although states have received substantial federal funding for program
development, at least five common barriers hinder state child support
enforcement efforts: 

Workload continues to grow and become more time-consuming.  Estimates
of worker caseload ranged from 300 to 2,500 cases per worker, and
officials believe that many cases now take more time than before. 
For example, the growing number of out-of-wedlock births means that
more cases need paternity establishment--more than 40 percent of the
caseload in one state. 

Child support enforcement program functions are only partially
computerized.  Some states do not have statewide computer systems. 
Other states have computerized some functions but others remain
manual.  One state had the computer capacity to seize noncustodial
parents' bank assets but did not have caseload intake and parent
location functions computerized.  Another state had extensive case
tracking capability but lacked the technology to identify assets and
levy administrative liens through automation. 

State program staff lack control over local units.  Some states
wanted more uniform state implementation and were frustrated by
dispersed program control.  One state's audits documented that some
local districts failed to implement state regulations for case
processing.  In another state, some judges did not follow state
procedures. 

State legislatures do not always support state programs' proposed
initiatives.  Some states have been more successful than others in
getting legislative support for new enforcement techniques, such as
in-hospital paternity establishment; revocation of driver's and
professional licenses of noncustodial parents who are delinquent in
support payments; and using administrative, rather than judicial,
processes for establishing support orders. 

Referrals from welfare offices lacked information that the child
support enforcement program needed to do its work.  GAO found in
earlier work that poor coordination between welfare and child support
agencies resulted in inadequate information about noncustodial
parents, including identity, location, and earnings data.\2 The
experiences of the state programs that GAO reviewed suggest that very
little has changed. 

States that GAO reviewed were at different points in developing or
adopting strategies to deal with the barriers they faced.  The
strategies included adding staff; refining AFDC intake procedures to
facilitate child support enforcement; contracting out some functions
to private entities; and using volunteers.  States also used various
techniques to garner legislative support and were making increased
use of automation. 

The actions some states have taken also show that many decisions
about adding resources, improving automation, and expanding the
program's administrative processes lie within the control of state
leadership and reflect the investments states can make in the program
without the impetus of a federal mandate. 


--------------------
\2 Child Support:  Need to Improve Efforts to Identify Fathers and
Obtain Support Orders (GAO/HRD-87-37, Apr.  30, 1987). 


      WELFARE REFORM PRESENTS
      ADDITIONAL OPPORTUNITIES AND
      CHALLENGES
-------------------------------------------------------- Chapter 0:4.4

All the welfare reform proposals that GAO reviewed would add new
enforcement tools but could also require more of OCSE and the states. 
In addition, some of the proposals would change the funding structure
and OCSE's audit approach.  Some proposals require greater
centralization of state operations and give some states tools that
they have sought, such as employer reporting of new hires or the
ability to suspend professional or driver's licenses.  However, new
and expanded responsibilities may also strain OCSE's ability to
effectively implement changes and increase state workloads.  New
demands under welfare reform could include broadening OCSE's role in
developing and coordinating expanded automated systems at the state
or federal level.  In addition, state programs may also need greater
technical assistance from OCSE and HHS to ensure effective state
implementation. 


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

GAO is making several recommendations to the Secretary of Health and
Human Services to strengthen OCSE's management and leadership.  Among
other things, these recommendations are aimed at establishing
performance goals for OCSE; promoting greater federal accountability;
reengineering OCSE audits of state performance to be more
outcome-oriented rather than process-oriented; and revising the
program funding structure to better support program priorities. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6

HHS stated that the report provides a balanced appraisal of OCSE and
the national program's accomplishments, and that GAO's
recommendations are well taken.  HHS provided additional information
about actions that it has planned or has in progress that address
several of GAO's recommendations.  (See app.  V.) While most of HHS'
actions are appropriate, GAO has some specific concerns about HHS'
response to establishing performance goals for OCSE; promoting
greater federal accountability; and changing the audits and funding
structure.  (See pp.  95-97.) HHS also provided technical comments,
as did program officials from selected states and several child
support enforcement experts; their comments have been incorporated as
appropriate. 


THE CHILD SUPPORT ENFORCEMENT
PROGRAM:  SIGNIFICANCE,
ORGANIZATION, PERFORMANCE, AND
REFORMS
============================================================ Chapter 1

Today, child support enforcement is an issue for more American
families than ever before.  The number of out-of-wedlock births and
divorces has escalated in recent years, and it is estimated about
half of American children will spend at least some time in
single-parent families.\3 Many of these single-parent families,
particularly those headed by young mothers, are at risk of welfare
dependency.  Child support is critical to these families'
self-sufficiency.  In the last 5 years, more and more single-parent
families have sought government assistance from the Aid to Families
With Dependent Children (AFDC) program, which requires recipients to
cooperate with the child support enforcement (CSE) program.  In
addition, an increasing number of single-parent families not
receiving AFDC have voluntarily sought CSE's help in obtaining child
support from noncustodial parents.  But in 1992, according to data
reported by the federal Office of Child Support Enforcement (OCSE),
only about 19 percent of the cases in the CSE program received any
child support payments. 

In 1975, in response to the growth in the numbers of families
receiving AFDC, the Congress created the national CSE program.  The
federal OCSE was created to monitor and help develop existing state
and local child support enforcement programs.  Child support
collected for families receiving AFDC was to be returned to the
government; child support collected for non-AFDC families would help
these families avoid a need for cash assistance from the government. 
Over the years, the Congress steadily expanded CSE program
enforcement tools, program requirements, and federal funding to
states.  In 1992, the federal government paid $1.7 billion to states
in matching and other funds to serve a caseload of about 15 million
families--8.7 million of whom received AFDC.\4

Because of his concerns, the Chairman of the Subcommittee on Federal
Services, Post Office and Civil Service of the Senate Committee on
Governmental Affairs asked us to review the CSE program to determine
how the federal government could improve services to the states and
the families who depend on state CSE activities.  Our review focused
on (1)whether the CSE program has the essential management tools in
place at the federal level that a program needs to fulfill its
mission; (2) how well the federal office, OCSE, has fulfilled its
role in fostering the development of state CSE programs; and (3) what
state CSE programs are doing to overcome barriers hampering CSE
efforts.  In addition, we examined implications of welfare reform
proposals and the Government Performance and Results Act of 1993
(GPRA) for the CSE program. 


--------------------
\3 Family Impact Seminar, "Reducing Family Poverty:  Tax-Based and
Child Support Strategies," background briefing report (Washington,
D.C.:  Dec.  4, 1992). 

\4 The caseload estimate is from the Department of Health and Human
Services' (HHS) Child Support Enforcement Seventeenth Annual Report
to Congress, which contains data for fiscal year 1992.  However,
refer to pp.  44 and 45 of this report for the limitations of these
data. 


   THE CONGRESS CREATED THE
   NATIONAL CHILD SUPPORT
   ENFORCEMENT PROGRAM TO MEET
   GROWING NEED
---------------------------------------------------------- Chapter 1:1

Child support is a parental responsibility.  However, because of the
growing number of parents who fail to assume this responsibility, the
Congress created the national CSE program in 1975 and significantly
amended it in 1984 and 1988.  The program's purpose is to strengthen
existing state and local efforts to find noncustodial parents,
establish paternity, obtain support orders, and collect support
payments.  Today, the program serves two populations:  families
receiving AFDC and those who do not.  Although the services provided
are essentially the same, collections are handled differently for the
two groups, with a portion of the AFDC collections being returned to
the state and federal governments and non-AFDC collections going
directly to the families.  Increases in both groups have caused
caseloads to climb, and the service needs of both groups have become
increasingly complex. 


      ESTABLISHING CHILD SUPPORT: 
      MAKING PARENTS RESPONSIBLE
-------------------------------------------------------- Chapter 1:1.1

When two people, whether married or not, have a baby, they incur an
obligation to provide for their child.  When parents live apart, the
parent not living with and providing day-to-day care for the child
(the noncustodial parent) is expected to help the other parent (the
custodial parent) provide for the child. 

Although children are entitled to support from parents who live
apart, a legally binding document--a separation agreement or a
support order--is needed to establish the appropriate amount of
financial support and make the payment enforceable on the
noncustodial parent.  If the parents were married at the time of the
child's birth, a support order is usually established when the
parents separate or divorce.  If the parents were not married when
their child was born, the legal presumption of paternity conferred by
marriage is lacking, and a permanent support order cannot be
established or enforced on either parent until there is a legal
determination of paternity.\5

Paternity is established in either of two ways:  (1) through
voluntary acknowledgment by the father or (2) if contested, through
determination based on evidence such as scientific (genetic testing)
and personal testimony.  In such cases, paternity establishment
confers on children the legal rights and privileges that a child born
within a marriage has.  Among them are rights to inheritance, medical
and life insurance benefits, social security, and possibly veteran's
benefits. 


--------------------
\5 In some cases, a temorary support order may be established before
paternity is established. 


      GOVERNMENT INVOLVEMENT
      TRIGGERED BY GROWING WELFARE
      CASELOADS
-------------------------------------------------------- Chapter 1:1.2

Before the national CSE program, federal and state governments became
involved in child support enforcement primarily through the AFDC
program, which provided welfare benefits to children who had
inadequate parental financial support.  In 1950, the first relevant
federal legislation required welfare agencies to notify appropriate
law enforcement officials when AFDC was furnished to a child who had
been abandoned by a parent.\6 Since 1968, federal statutes pertaining
to the AFDC program have specifically required states to have
programs for establishing paternity and obtaining support for
children who receive AFDC.  By 1975, an alarming rise in welfare
costs resulting from out-of-wedlock birth rates and parental
desertion as well as a growing demand to relieve taxpayers of the
financial burden of supporting these families prompted the Congress
to create the national CSE program as title IV-D of the Social
Security Act.  The Congress believed government welfare expenditures
could be reduced, and to some extent prevented, by recouping AFDC
benefits from noncustodial parents' child support payments.  In
addition, the Congress believed that earlier enforcement of child
support obligations for families not receiving AFDC could help
prevent these families from needing government support.  The national
CSE program incorporated the already existing state programs. 


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


      AFDC AND NON-AFDC
      COLLECTIONS HANDLED
      DIFFERENTLY
-------------------------------------------------------- Chapter 1:1.3

Families who receive AFDC, and families who do not, enter the CSE
program in different ways; and the child support payments CSE
collects for them are distributed differently.  A mother who requests
AFDC for her child is required as a condition of eligibility to
assign her rights to child support to the government and to cooperate
with the CSE program in locating and identifying the father of the
child.\7 If the child support that CSE collects for an AFDC family
does not, together with family income, make the family ineligible for
AFDC, then all but $50 of the monthly support payment goes to the
state and federal governments in proportion to their AFDC assistance
to the family.  The family continues to receive its full monthly AFDC
grant plus the first $50 of the support payment. 

If the family does not receive AFDC, all the child support collected
goes directly to the family.\8 Parents who do not receive AFDC are
under no obligation to establish paternity or to use CSE services to
collect child support.  They do so, if at all, voluntarily. 


--------------------
\7 There are procedures to exempt custodial parents from cooperation
for good cause. 

\8 If a family has stopped receiving AFDC, not all the child support
collected may go to the family.  In almost half the states, support
paid above the current obligation amount is used to reimburse any
child support owed to the state under the AFDC assignment provisions
prior to payments owed to the family. 


      THE CSE CASELOAD, ESPECIALLY
      NON-AFDC FAMILIES, HAS
      GREATLY EXPANDED
-------------------------------------------------------- Chapter 1:1.4

Between 1980 and 1992, the nationwide CSE caseload\9 grew 180
percent, from 5.4 million to 15.2 million cases.\10

Part of that growth stemmed from the increase in the number of
single-parent families receiving AFDC.  The average monthly number
rose more than 1 million in the past 5 years, increasing from nearly
3.6 million families in 1989 to just over 4.6 million in 1993.  The
larger portion of the CSE caseload increase, however, was in non-AFDC
cases, which grew from 16 to 43 percent of the caseload during this
period.  In fiscal year 1992, there were 8.7 million AFDC cases and
6.5 million non-AFDC cases.  Figure 1.1 shows the increase in the CSE
caseload from fiscal year 1980 through 1992. 

   Figure 1.1:  Child Support
   Enforcement Caseload, Fiscal
   Years 1980-1992

   (See figure in printed
   edition.)

Source:  OCSE annual reports. 


--------------------
\9 Throughout this report, CSE caseload refers to all cases enforced
under title IV-D of the Social Security Act--both non-AFDC recipients
who specifically request services and AFDC recipients who are
automatically referred to and required to participate in the CSE
program. 

\10 State data about 1992 caseloads and expenditures were the most
recent available about state programs. 


      INCREASING NUMBER OF YOUNG,
      UNWED PARENTS MAKES CASELOAD
      INCREASINGLY DIFFICULT TO
      SERVE
-------------------------------------------------------- Chapter 1:1.5

Today, the CSE caseload is more difficult to serve than in the
earlier years because there are more young, unwed parents.  Various
studies indicate that these cases usually require more services and
are more difficult to successfully serve than those involving married
or formerly married parents.  For example, cases involving unwed
parents require paternity establishment, which may be contested
rather than acknowledged voluntarily.  Also, unwed parents are
usually less able and less willing than married or formerly married
parents to pay child support.  Such parents are generally younger and
have less education and earning capacity.  They are likely to be
unemployed or unemployable and have little or no income with which to
pay support--some are still in high school.  In addition, some unwed
parents are not aware of or do not fully understand the parental
responsibilities that CSE agencies try to enforce. 

The growing size and complexity of the CSE caseload reflect major
changes in demographic characteristics of the American family.  High
rates of divorce and out-of-wedlock birth have resulted in more
children living in single-parent households.  For example, the number
of births to unmarried mothers increased 82 percent between 1980 and
1991.  During the same period, the proportion of out-of-wedlock
births rose from 18.4 to 29.5 percent of all births.\11 U.S.  Bureau
of the Census data indicate that there were 9.8 million custodial
mothers aged 18 years and older in 1990--39 percent more than in
1979, the first year for which this information was available.\12

The increasingly difficult-to-serve nature of the CSE caseload and
the links between nonpayment of child support, poverty, and increases
in families receiving AFDC benefits are underscored by socioeconomic
statistics.  In 1989, according to U.S.  Census data, 62 percent of
all custodial mothers did not receive child support payments, largely
because they lacked support orders.\13 In that same year, 32 percent
of all custodial mothers were living below the poverty threshold, and
three-quarters of them had not received child support.\14 Receiving
child support appears to be a particular problem for never-married
custodial mothers and their children--they made up 52 percent of the
AFDC caseload in 1991, up from 21 percent in 1976.\15

Census data indicate that of all never-married custodial mothers, 75
percent did not have child support orders and slightly more than half
had household incomes below the poverty level in 1989. 


--------------------
\11 Child Support Enforcement Seventeenth Annual Report to Congress,
pp.  3-4. 

\12 Current Population Reports, Series P-60, No.  173, Child Support
and Alimony:  1989 (Washington, D.C.:  1991), tables A-D. 

\13 Of 6.2 million custodial mothers who did not receive support, 4.2
million did not have support orders.  Of the others, 1.2 million had
orders but did not receive any payments, and 800,000 had orders but
payments were not due that year. 

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

\15 Families on Welfare:  Sharp Rise in Never-Married Women Reflects
Societal Trend (GAO/HEHS-94-92, May 31, 1994) and Families on
Welfare:  Teenage Mothers Least Likely to Become Self-Sufficient
(GAO/HEHS-94-115, May 31, 1994). 


   PROGRAM RESPONSIBILITY IS
   SHARED BY FEDERAL, STATE, AND
   LOCAL GOVERNMENTS
---------------------------------------------------------- Chapter 1:2

CSE is an intergovernmental program involving the federal, state, and
local governments.  Federal responsibility for the CSE program lies
within HHS in the Administration for Children and Families (ACF). 
Within ACF, OCSE manages the CSE program at the federal level.  A
separate office within ACF, the Office of Information Systems
Management/CSE Information Systems, approves, monitors, and certifies
state information systems projects for all ACF programs, (funded
under the Social Security Act), including CSE, and reports on CSE
matters to the director of OCSE.  In addition, ACF staff in HHS
regional offices are responsible for review and approval of states'
plans for all ACF programs, including CSE, AFDC, Job Opportunities
and Basic Skills Training, and others,\16 and for ensuring consistent
and uniform adherence to federal requirements governing all ACF
formula and entitlement programs.  Figure 1.2 displays the
organization of CSE responsibilities within HHS. 

OCSE is responsible for providing leadership, technical assistance,
and standards.  When the Congress established the CSE program, it
envisioned an aggressive federal role in ensuring that states
actually develop strong and effective CSE programs.  Title IV-D of
the Social Security Act mandates that OCSE provide technical
assistance to states to help them plan, develop, design, and
establish effective CSE programs.  The act also directs OCSE to
establish standards for state program effectiveness and monitor the
operation of state programs through periodic audits.  To help ensure
program effectiveness, OCSE has the authority to assess financial
penalties if an audit reveals a state has failed to meet certain
program standards.  In addition, OCSE is responsible for maintaining
relationships with federal, state, and local government officials,
private organizations, and for individuals interested in the CSE
program, and for coordinating and planning CSE activities to maximize
program effectiveness. 

State CSE agencies are responsible for all activities leading to
securing financial support and medical insurance coverage from
noncustodial parents for children involved in CSE cases.  To meet
federal requirements and receive federal funds, state CSE programs
must have HHS-approved plans indicating compliance with federal law
and regulations and must operate programs in accordance with those
plans.  HHS can withhold federal funding from states that do not have
approved plans.  There are significant differences in the ways state
CSE programs are organized, where they are placed in the states'
organizational hierarchies, what relationships exist between the CSE
program and other state agencies, and the policies and procedures
that are followed.  These characteristics usually vary by traditional
state-local service delivery structures, levels of court involvement
required by state family law, population distribution, and other
state variables.  For example, some state child support agencies
operate their CSE programs with state funds through a network of
regional offices, while others share the funding with and supervise
county and other local jurisdictions' operations.  Under both
circumstances, certain program responsibilities may be contracted out
to other entities.  In addition, the state CSE agencies are not all
in human services agencies; in a few states, CSE is in the state
department of revenue or the attorney general's office. 


--------------------
\16 These include foster care and adoption assistance, child welfare,
homeless youth, child care, and developmental disabilities. 


   FUNDING DESIGNED TO CREATE A
   FEDERAL-STATE PARTNERSHIP
---------------------------------------------------------- Chapter 1:3

The CSE funding structure was designed to share program costs between
the federal and state governments.  The federal government matches 66
percent of states' administrative costs and 90 percent of their costs
of developing management information systems\17 and certain other
services related to paternity establishment.  The federal government
also pays incentives to states for collection efficiency.  Incentives
are calculated separately for AFDC and non-AFDC collections by
dividing each by total program administrative costs.  Incentive
payments for AFDC collection efficiency range in amounts equal to 6
to 10 percent of the AFDC collections.  Incentive payments for
non-AFDC collections also range in amounts equal to 6 to 10 percent
of non-AFDC collections but cannot be greater than 115 percent of the
incentive payments paid for AFDC collection efficiency.  These
incentive payments are funded from the federal portion of recovered
AFDC collections.  Though federal matching funds are restricted to
CSE program costs, states may use the incentive payments to fund
programs other than CSE.  They must, however, share incentives with
local governments that bear some of the administrative costs of the
CSE program. 


--------------------
\17 The 90-percent federal match for systems development costs
expires at the end of fiscal year 1995. 


   SERVICE DELIVERY IS DIVERSE AND
   COMPLEX ACROSS THE NATION
---------------------------------------------------------- Chapter 1:4

CSE is an administratively complex program.  While the basic services
are the same in every location, different families need different
services.  In addition, how services are delivered varies
geographically.  The common services mandated by federal law include
client intake (including case establishment); locating noncustodial
parents; establishing paternity; establishing, reviewing, and
modifying support orders; enforcing financial and medical support
obligations; and collecting and distributing support payments. 
Appendix I briefly describes these services and some of the
activities and organizations involved with each of them. 

Families entering the CSE program require different combinations of
these services at different times, and thus their cases flow through
the program on different pathways.  In some cases, the child's
paternity has not been established and the location of the alleged
father is unknown.  In these cases, the custodial parent needs the
CSE program to help with every step:  locating the alleged father,
establishing paternity and a child support order, enforcing the
order, and distributing collections received.  In other cases, the
custodial parent may have a child support order and CSE agencies must
periodically review and possibly modify the order to ensure continued
conformity to state guidelines.\18 Order amounts may be increased or
decreased with changes in noncustodial parents' ability to pay, for
example, because of wage increases or job losses.  Figure 1.3
illustrates various combinations and sequences of services that cases
require as they flow through the program. 

   Figure 1.3:  CSE Services and
   Case Flows

   (See figure in printed
   edition.)

Delivery of CSE services frequently involves the executive,
legislative, and judicial agencies of state and local governments,
such as tax collection agencies, the courts and district attorneys,
as well as private institutions, such as banks, employers, and credit
bureaus.  At the local level, both enforcement and paternity
establishment may involve the courts to varying degrees.  One study
of paternity establishment practices in a sample of nearly 250
counties found that the local agency responsible for child support
was the department responsible for human services in 75 percent of
the counties.\19 Only 43 percent of the counties, however, had
paternity establishment handled solely by the department of human
services.  In most other counties, paternity establishment was a
joint responsibility of the human services agency and a prosecuting
or private attorney. 

Paternity and support order establishment and enforcement may be
handled through a judicial or administrative process, depending on
the state in which the custodial parent lives.  Under a judicial
process, authority to make paternity judgments, establish support
orders, and take enforcement actions rests with the courts;
proceedings take place in a legal setting and typically may involve
district attorneys, state's attorneys, county attorneys, judges,
legal aid societies, or private attorneys.  In contrast, under an
administrative process, an agency of the executive branch of state
government has authority to administer certain aspects of state child
support law or regulation without court approval being necessary for
legally binding actions.  The degree to which administrative rather
than judicial processes are used varies across all states and within
states.  The functions and enforcement actions to which
administrative processes are applied differ, as well as the degree to
which the processes are used; the spectrum of processes is described
as ranging from purely administrative to quasi-judicial to purely
judicial.\20


--------------------
\18 All AFDC cases must be reviewed every 3 years, and non-AFDC cases
must be reviewed at the request of either parent. 

\19 Pamela Holcomb, Kristin Seerfeldt, and Freya Sonenstein,
Paternity Establishment in 1990:  Organizational Structure, Voluntary
Consent, and Administrative Practices (Washington, D.C.:  The Urban
Institute, 1992). 

\20 In most states, however, even those using purely administrative
processes, judges still enter support orders in divorce proceedings. 


   PROGRAM RESPONSIBILITY AND
   TOOLS HAVE EXPANDED WHILE
   FEDERAL EXPENDITURES HAVE GROWN
---------------------------------------------------------- Chapter 1:5

To help meet the increasing challenge of child support enforcement,
the Congress has significantly amended CSE legislation over the
years.  In addition, federal expenditures have grown considerably. 
Most states continue to report net savings while federal net costs
for the CSE program have increased. 


      LEGISLATIVE PROGRAM
      EXPANSION
-------------------------------------------------------- Chapter 1:5.1

Over the years, the Congress has expanded the responsibilities of the
CSE program.  Under the Child Support Enforcement Amendments of 1984
(P.L.  98-378), states are to treat AFDC and non-AFDC cases the same. 
The amendments also established the current funding structure.  The
Family Support Act of 1988 (P.L.  100-485) and the Omnibus Budget
Reconciliation Act of 1993 (OBRA'93, P.L.  103-66) strengthened
requirements for paternity establishment, medical support, and
support order fairness and currency. 

In addition to expanding program responsibilities, the Congress also
expanded program tools.  The 1984 amendments, for example, required
universal wage withholding provisions in all support orders,
interception of federal tax refunds, and reporting delinquent payers
to credit bureaus.  The Family Support Act encouraged states to
establish voluntary, civil paternity acknowledgment procedures and
provided for establishment of paternity standards that states must
achieve to avoid being penalized with reduced funding, among other
things.  Appendix II lists the major requirements. 

More recently, OBRA'93 strengthened the program by (1) requiring
increased opportunities for unwed parents to voluntarily acknowledge
or otherwise establish paternity in a less complicated and more
timely manner, including in hospitals; (2) removing impediments to
the enforcement of health insurance provisions in child support
orders; and (3) strengthening the paternity establishment performance
standards initiated by the Congress in the Family Support Act. 


      INCREASED FEDERAL FINANCIAL
      EXPENDITURES FOR STATE CSE
      PROGRAMS
-------------------------------------------------------- Chapter 1:5.2

Between 1980 and 1992, annual federal expenditures for matching funds
to state CSE programs increased more than four-fold, from about $350
million to more than $1.3 billion.  Figure 1.4 illustrates this
trend.  Federal incentive payments to states, paid out of the federal
portion of the recovered AFDC funds, also increased, from $72 million
in fiscal year 1980 to $339 million for fiscal year 1992.  (See fig. 
1.5.)

   Figure 1.4:  Federal
   Expenditures for Matching Funds
   to State CSE Programs, Fiscal
   Years 1980-1992

   (See figure in printed
   edition.)

Source:  OCSE annual reports. 

   Figure 1.5:  Federal Incentive
   Payments to State CSE Programs
   From the Federal Share of AFDC
   Collections, Fiscal Years
   1980-1992

   (See figure in printed
   edition.)

Source:  OCSE annual reports. 


      FEDERAL NET COSTS FOR THE
      CSE PROGRAM HAVE INCREASED
      WHILE MOST STATES REPORTED
      NET SAVINGS
-------------------------------------------------------- Chapter 1:5.3

From 1980 to 1992, federal government spending on state CSE programs
increasingly outpaced what the federal government saved through AFDC
recovery.  During that period, however, at least 75 percent of the
states reported a net savings due to their CSE programs.  In other
words, federal payments to states for CSE--matching funds and
incentives--were not offset by federally retained AFDC collections,
but state-reported CSE costs were more than offset by the combination
of their retained AFDC collections and federal matching funds and
incentive payments.  Through fiscal year 1988, there were net savings
to the public; since that time, costs have exceeded savings.\21 (See
table 1.1.)



                         Table 1.1
          
            Net Budget Savings/Costs for States,
           Federal Government, and Taxpayers From
          the CSE Program, Fiscal Years 1980-1992

                   (Dollars in thousands)

Fisc     State net         Federal net
al          budget     budget savings/        Net savings/
year       savings               costs  costs to taxpayers
----  ------------  ------------------  ------------------
1980      $230,152           $-102,698            $127,454
1981       260,969            -128,377             132,592
1982       307,309            -147,946             159,363
1983       312,296            -138,078             174,218
1984       365,522            -105,048             260,474
1985       317,334            -230,888              86,446
 \a
1986       275,644            -263,177              12,467
1987       341,826            -337,278               4,548
1988       381,001            -355,424              25,577
1989       403,333            -480,056             -76,723
1990       338,469            -528,135            -189,666
1991       385,059            -586,454            -201,395
1992       434,317            -604,946            -170,629
----------------------------------------------------------
Note:  Federal net savings/costs refer to the federal share of AFDC
collections less incentive payments and matching funds paid to the
states. 

\a According to the Congressional Research Service, the sudden
decrease in taxpayer savings in 1985 was caused primarily by the
implementation of the $50 "pass through" to AFDC families, effective
in fiscal year 1985. 

Source:  OCSE annual reports. 


--------------------
\21 Both the federal and state governments may also experience
savings in the AFDC programs by keeping or moving families off of
AFDC through successful child support enforcement efforts.  Such
savings, however, are difficult to measure. 


   PERCEPTION OF PROGRAM'S
   PERFORMANCE VARIES WIDELY
---------------------------------------------------------- Chapter 1:6

A widespread public perception exists that the CSE program is failing
to adequately address the nationwide problem of child support
nonpayment.  Some state program directors, however, believe CSE
performance has improved over the years, citing rising collections in
recent years in the face of an increasingly large and complex
caseload often involving teenage parents and out-of-wedlock cases. 
In part, disagreements about program performance stem from differing
notions of what can realistically be expected from the child support
enforcement system. 

Advocates for children, policy analysts, human service and CSE
professionals, and members of the Congress have characterized CSE's
effect on the national child support enforcement problem as ranging
from "unacceptable" to "dismal." In support of this assessment, they
cite Bureau of the Census and other national survey data on the size
of the problem nationwide.  These data indicate that 62 percent of
all custodial mothers in the United States did not receive child
support in 1989.  One study has estimated the gap between total child
support that should be paid nationwide and total child support paid
as $34 billion in 1990.\22

Advocates and others also have made specific criticisms of CSE's
program performance on its current caseload.  Using data reported by
states to OCSE, some have faulted CSE because only 19 percent of all
custodial parents served by the CSE program in 1992 actually received
support payments.  These observers also point out that of the 15.2
million cases in the CSE program in fiscal year 1992, more than 6.7
million cases, or about 44 percent, were without orders to pay
support.  In addition, they cite the fact that states reported
collecting only about one-fourth of the child support due for fiscal
year 1992 and prior years. 

Others in the child support enforcement community, however, believe
that CSE program performance has improved greatly in recent years in
the face of growing caseloads, federal mandates, and increasingly
complicated out-of-wedlock cases.  Between 1980 and 1992, states
reported that dollar collections steadily increased by over 400
percent, from about $1.5 billion to $8 billion.  In addition, both
AFDC recovery and the proportion of cases for which collections were
achieved increased between 1980 and 1992 along with a rise in the
caseload.  The program's recovery of AFDC payments increased
approximately 118 percent, from a national rate of 5.2 percent to
11.4 percent.  Similarly, the proportion of cases for which some
collections were received increased 36 percent, from a rate of 13.7
percent to 18.7 percent. 

In part, the disagreement between those who criticize the program and
those who defend its accomplishments hinges on differing notions of
what are realistic and achievable expectations for the program.  Some
expect the program to achieve support for more of the families now in
the program and to reach out and help additional families.  Others
have more limited expectations for various reasons, including the
ever-increasing number of out-of-wedlock births, the fact that some
custodial parents choose not to pursue child support, and
uncertainties about the ability of some noncustodial parents to pay
support. 

The ever-increasing number of out-of-wedlock births requires CSE to
establish paternity on more cases--a sometimes difficult and
time-consuming task.  In-hospital voluntary paternity acknowledgment
is extending CSE's reach early and has been shown to be increasing
the number of paternities established and the efficiency of
establishment.  However, this initiative depends on the cooperation
of both parents and results to date suggest that much remains to be
done.  Research reported in 1991 from the state of Washington, a
pioneer of this approach, showed that nearly 40 percent of unmarried
supposed fathers were signing voluntary acknowledgments.  Other state
programs' report similar results.  These results mean that more than
half of unwed fathers will have to be pursued through other means if
child support is to be collected. 

Complicating the question of what realistic expectations are for CSE
is the fact that not all custodial parents needing child support are
served by the CSE program, and some choose not to use its services. 
According to 1987 Bureau of the Census data, 162,000 teenaged mothers
were not awarded or were awarded but did not receive regular child
support payments.  Nearly 45 percent said they did not receive
payments because they did not pursue the matter or did not want child
support.  Similarly, results from state demonstration projects of
review and modification of orders also illustrate the reluctance of
some families to have CSE involved in their cases.  Reasons that
non-AFDC custodial parents gave for refusing to have their awards
reviewed included (1) fear of jeopardizing current payments, (2)
desire to avoid court proceedings, (3) belief the noncustodial parent
is paying all he or she can afford, and (4) doubt that the review
would result in payments. 

Finally, program efforts may not guarantee that cooperative
noncustodial parents will be able to pay support.  Our previous work
has shown that 9 percent of noncustodial fathers aged 23 to 31 have
no income to pay support.\23

Other research has revealed that 27 percent of the noncustodial
fathers who did not pay child support in 1990 were unemployed for at
least part of that year.  In addition, fathers' ability to pay has
been shown to influence their compliance with child support
awards.\24


--------------------
\22 Elaine Sorensen, Noncustodial Fathers:  Can They Afford to Pay
More Child Support?  (Washington, D.C.:  The Urban Institute, Jan. 
1994). 

\23 Child Support Assurance:  Effect of Applying State Guidelines to
Determine Fathers' Payments (GAO/HRD-93-26, Jan.  21, 1993). 

\24 Judi Bartfield and Daniel Meyer, Are There Really Deadbeat Dads? 
The Relationship Between Ability to Pay, Enforcement, and Compliance
in Nonmarital Child Support Cases, DP#994-93 (Madison, Wis.: 
Institute for Research on Poverty, Mar.  1993). 


   CSE AND FEDERAL REFORM
   INITIATIVES
---------------------------------------------------------- Chapter 1:7

The CSE program is at the forefront of congressional efforts to
reform government operations in general and, more specifically, to
reform welfare.  In August 1993, GPRA became law and the nationwide
CSE program was subsequently selected as a pilot for the
implementation of GPRA.  In addition, in late 1993 and 1994, several
welfare reform proposals emerged from the Congress and the
administration that included changes for the CSE program. 


      CSE IS AMONG PILOTS FOR
      GOVERNMENT MANAGEMENT REFORM
-------------------------------------------------------- Chapter 1:7.1

CSE is among the pilot projects for government management reform
under GPRA.  Unlike most other pilots, however, the CSE pilot
encompasses the entire federal and state CSE program, not just
federal operations. 

The Congress enacted GPRA to strengthen federal program management
with goal-setting, performance measurement, and results-reporting
requirements.  GPRA is intended to accomplish several government
reforms, including improved (1) federal program effectiveness and
public accountability, (2) service delivery, and (3) congressional
decision-making.  To that end, GPRA requires all federal agencies to
have strategic plans by September 30, 1997, and performance plans by
fiscal year 1999. 

To initiate program performance reform and identify the best way to
implement this new system across the federal government, GPRA
requires a series of pilots.  As a pilot, OCSE is required to have a
fiscal year 1995 performance plan by the start of that fiscal year. 
An OCSE official said the plan was submitted to HHS' Assistant
Secretary for Management and Budget on September 27, 1994. 


      WELFARE REFORM PROPOSALS
      CALL FOR CHANGES IN CSE
-------------------------------------------------------- Chapter 1:7.2

Major welfare reform proposals introduced in the 103rd Congress
contained changes for the CSE program.  Some proposals call for more
aggressive and stringent paternity establishment procedures, central
support award registries in states, and centralized state collection
procedures, among other measures.  In addition, some of the welfare
reform proposals would add to OCSE's responsibilities by requiring it
to establish and operate national databases for support orders and
other information. 


   SCOPE AND METHODOLOGY
---------------------------------------------------------- Chapter 1:8

In doing our work, we reviewed the history of the CSE program,
focusing on the period from 1980 to 1992, the most recent year for
which data were available at the time of our review.  We interviewed
current and former program staff in all parts of the CSE program--at
OCSE, in HHS regional offices, and in state and local CSE
programs--including caseworkers, local office managers, county
attorneys, state CSE and social service program directors, HHS and
state auditors, and others.  We also talked with CSE professionals
affiliated with private companies, universities, advocacy groups, and
policy and social research organizations.  We continually reviewed
published literature on child support and attended meetings of
professional associations concerned with CSE issues.  We analyzed CSE
program statistics as reported by states and published by OCSE and
discussed these with officials. 

To identify barriers that hinder state program CSE efforts and how
states are addressing the barriers, we performed case studies in
eight states:  Arizona, Iowa, Kentucky, Massachusetts, New York,
Oregon, Texas, and Virginia.  (See app.  III.) We selected these
states because they represented different CSE caseload sizes, both
centralized and decentralized program structures, administrative and
judicial case processing approaches, a variety of performance
histories as reflected in data submitted for OCSE annual reports, and
different regions of the country.  In addition, we reviewed
socioeconomic data, including rates of out-of-wedlock births,
divorce, and unemployment for these states and others.  The scope of
our work did not include the issues surrounding interstate child
support enforcement.  To assess the potential implications of welfare
reform on the CSE program, we reviewed several welfare reform
proposals containing changes to CSE.  (See app.  IV.)

We conducted our review from November 1992 to December 1994 in
accordance with generally accepted government auditing standards. 
HHS provided written comments on a draft of this report.  These
comments are discussed in chapter 5 and included in appendix V.  We
also obtained comments on a draft of this report from selected
officials in each of the states we studied and several child support
enforcement experts.  Their suggested revisions were incorporated, as
appropriate, into this report. 


CSE PROGRAM LACKS ESSENTIAL
MANAGEMENT TOOLS
============================================================ Chapter 2

The CSE program lacks essential management tools to help fulfill its
mission.  Missing are a well-articulated mission, programwide
planning and goal-setting, and accurate, consistent data that can be
used to measure progress toward goals.  In addition, the program's
incentive funding structure is weakly linked to program performance. 

As the need for CSE services has continued to grow because of rising
divorce rates and numbers of out-of-wedlock births, an evolving
history has given CSE a complex mission.  Originally intended
primarily to recover federal and state welfare costs from the child
support payments owed to AFDC families, CSE today is required to
serve AFDC and non-AFDC families equally.  In addition, some
services, such as enforcing medical support, do not result in child
support collections.  As a result, the program faces competing
priorities. 

In the face of this expanded mission, CSE lacks a program plan and
measurable program goals that could be used to set priorities.  Only
one national goal exists--paternity establishment--and that was
mandated by the Congress.  In addition, despite nearly 20 years of
state reporting, program data are inadequate for decision-making
because of unclear definitions from OCSE and inaccurate reporting by
the states.  Finally, CSE's funding structure has not been effective
in achieving program improvements.  The structure of incentive
payments continues to reflect CSE's original, narrower mission of
recovering welfare costs, and the link between incentive payments and
state program performance is weak. 


   CSE'S MISSION HAS BECOME
   COMPLEX
---------------------------------------------------------- Chapter 2:1

The CSE program's mission has become more complex over time as the
federal government expanded program requirements but made few changes
to critical program components, such as the funding structure.  As a
result, different stakeholders--federal, state, and local program
officials; custodial and noncustodial parents; advocacy groups; and
elected leaders--have differing expectations of the program. 
Initially, states and the federal government focused the program's
mission on easing taxpayer burden through recovering AFDC payments. 
Over time, the program's mission has been broadened from primary
concern with government economy to concern with the economic security
of children in both AFDC and non-AFDC families.  In addition, some
program activities, such as establishing medical support enforcement,
focus more on noncollection outcomes and may use program resources
without generating increased child support collections in the short
term or at all.  Despite these changes to the mission, important
program components, such as the performance indicators used in
federal audits of state programs and the structure of federal
incentive payments to states, continue to emphasize AFDC cost
recovery and welfare savings. 

Lack of alignment among program expectations--recover AFDC but also
serve all in need and provide services that do not result in child
support collections--has left state programs in awkward positions
with their state legislatures and executive leadership.  As one state
program director observed to us,

     "[M]ost states are caught in an identity crisis now .  .  .. 
     [W]e sold our program when it [was] supposed to generate revenue
     to reduce state cost .  .  ..  [T]he taxpayers were the clients
     who were reimbursed the welfare expense .  .  ..  [W]e [are]
     moving now toward providing services to families, but the
     structure and the funding is [sic] not supportive.  It's not
     clear .  .  ..  I think a national agenda would be very
     desirable."

Moreover, given the competing priorities in program mission and the
differing pressures generated by program expectations and
requirements, state program directors must decide how to spread their
resources among required collection and noncollection activities. 

In addition, welfare reform may further expand CSE's mission.  Some
proposals broaden the program to include all child support cases in
the country. 


      CSE'S ORIGINAL MISSION OF
      RECOVERING WELFARE COSTS
      COMPLICATED BY EXPANDING
      REQUIREMENTS
-------------------------------------------------------- Chapter 2:1.1

CSE's original emphasis on recovering welfare costs has diminished as
expanding requirements created a much broader and more complicated
program mission.  In addition to welfare recovery, there is now more
emphasis on activities that require a long-term view of the program's
overall social as well as financial benefits for both AFDC and
non-AFDC families, such as medical support and paternity
establishment. 

When the national CSE program was established in 1975, it focused on
recovering AFDC payments.  The priority placed on recovering AFDC
payments was supported by state laws and the funding structure.  Many
states had laws allowing courts to set current support orders equal
to a family's public assistance grant to recover all of the AFDC
payments.  In addition, the incentive payment structure established
in 1975 rewarded states only for recoveries of AFDC collections. 
Thus, the primary beneficiaries of the early program were taxpayers,
not families and children. 

As noted previously, in 1984 and 1988, the Congress extended CSE's
authority and services, thus expanding CSE's mission.  While
continuing a focus on welfare cost recovery, these amendments raised
the priority of several other aspects of CSE.  The 1984 legislation
increased emphasis on welfare prevention by providing that states
serve AFDC and non-AFDC families in the same way.  Providing
equivalent service to non-AFDC families, however, has significantly
increased most states' CSE caseloads as described in chapter 1 and
illustrated in figure 1.1.  In some states, the non-AFDC caseload is
greater than the AFDC caseload. 

In addition, 1984 amendments and subsequent legislation\25

expanded state responsibilities by mandating the inclusion of medical
support in child support orders and the provision of services to
families who only receive Medicaid.  To avoid a potential reliance on
Medicaid, these mandates require state programs to ensure that
parents provide medical insurance for their children whenever they
have a reasonable opportunity to do so.  However, medical support
enforcement requires an investment of staff and automated resources
that does not produce child support collections. 

Amendments in 1984 further reduced the emphasis on welfare recovery
by setting a $50 limit on the amount of child support that AFDC
families could retain.\26 This change allowed AFDC families to keep
some of the child support collected, while the government retained
less.  However, some state program officials in the states we visited
commented that this provision is an administrative "nightmare" and it
added greater complexity to the distribution of collections. 

The 1988 amendments continued to broaden and complicate the program's
mission by requiring states to (1) meet performance standards for
paternity establishment and (2) undertake periodic review of child
support orders and states' guidelines governing them to keep orders
up-to-date.  Paternity establishment is an essential first step
toward obtaining a child support award and collection.  However, it
can be time-consuming and may not result in collections for some
time, if at all, depending on case complexity and collectibility.\27
Another potentially time-consuming and labor-intensive activity,
periodic review and adjustment of child support orders, has also been
shown to substantially increase collections, but for a small
percentage of cases.  In addition, states now must respond to
requests for review and modification from both noncustodial and
custodial parents. 


--------------------
\25 The Omnibus Budget Reconciliation Act of 1987 (P.L.  100-203,
sec.  9141) amended program requirements to provide CSE services to
families who receive Medicaid. 

\26 The 1975 legislation had set a $20 limit, but that provision
expired in 1976.  No limit was in effect thereafter until the 1984
amendments. 

\27 Case complexity and collectibility depend on such factors as
whether the case is contested; whether location, blood tests,
subpoenas, and other program efforts are required; and the
noncustodial parent's ability to pay. 


      AUDIT PERFORMANCE INDICATORS
      AND INCENTIVE PAYMENTS ARE
      AIMED AT RECOVERING WELFARE
      COSTS
-------------------------------------------------------- Chapter 2:1.2

Despite the movement to broaden CSE's mission, important program
components--audit performance indicators and incentive payments--
remain focused on AFDC cost recovery, not the broader goal of
contributing to families' economic security.  OCSE is required to
audit every state program at least once every 3 years, and the audit
performance indicators for state programs emphasize AFDC collections. 
In addition to determining regulatory compliance, the audits assess
the performance of state CSE programs by three indicators, two of
which focus on AFDC collections:  (1) AFDC collections divided by
AFDC payments (less payments to unemployed parents),\28 (2) non-AFDC
collections divided by administrative costs,\29 and (3) AFDC
collections divided by administrative costs. 

The incentive payment structure continues to give priority to AFDC
collections despite the changes in 1984.  While expanding program
emphasis beyond recovery of welfare costs, the 1984 amendments
changed the incentive structure to reward state efforts to make
non-AFDC collections as well as AFDC collections.  However, in this
scheme, AFDC collection efficiency still has priority because
non-AFDC collection incentive payments are capped at 115 percent of
AFDC collections.  That is, no matter how well a state program does
in collecting non-AFDC support, its efforts may not be fully
rewarded.  In addition, the lack of incentive payments for medical
support efforts have given these efforts a low priority.  AFDC
collection efforts, therefore, drive state performance.  Furthermore,
HHS' Office of the Inspector General found that some state and local
officials are concerned that using collection efficiency for
determining incentives tends to penalize states for incurring
additional significant costs that are not expected to yield increased
total collections, both AFDC and non-AFDC, during the same year, such
as costs for in-hospital voluntary paternity establishment programs
aimed at new unwed parents. 


--------------------
\28 States make AFDC payments to children in single-parent families
and two parent-families, who are needy because of the unemployment of
one of their parents.  In the calculation for the first indicator,
AFDC payments to two-parent families are subtracted from the total
amount of AFDC benefits paid. 

\29 The administrative costs used in these calculations may not
include laboratory costs incurred in determining paternity if a state
chooses to exclude them. 


      SOME STATE LEADERS STILL
      EMPHASIZE CSE'S RECOVERY OF
      WELFARE COSTS AND GENERATION
      OF ADDITIONAL STATE REVENUE
-------------------------------------------------------- Chapter 2:1.3

Despite the program's shifting emphasis away from recovery of welfare
costs, some state leadership--legislative and executive
decisionmakers--still expect CSE to generate revenue, according to
state CSE officials.  In the eight states we visited, many program
officials said that state leadership tended to focus more on the
program's revenue potential than on the social goals of promoting
families' economic security. 

Some state program directors told us that their states' interest in
CSE as a revenue generator makes it difficult for them to achieve a
balanced program.  For example, a senior Oregon program official said
that it is difficult to go to the legislature with a message
balancing both social and fiscal goals.  He explained that the only
way to get more money from the legislature is to emphasize the
program's money-making potential.  If the program's management went
to the legislature and talked about economic self-sufficiency for
custodial families, he believed they would lose the budget battle. 
Overall, he concluded, dollar goals are this program's clearest
mission and the easiest to defend. 

New York Office of Child Support Enforcement officials expressed
similar sentiments about their state legislature's goals.  These
officials believed the legislature's primary focus is on collections. 
As a result, state CSE officials made a deliberate decision to link
child support enforcement to revenue generation, rather than
presenting it as a programmatic expenditure along with other social
programs to obtain more resources for the program. 

To meet the fiscal expectations of their legislatures and executive
leaders, some state programs set priorities and risk audit findings
of deficiencies that could result in financial penalties.  For
example, OCSE's 1988 audit of Iowa's CSE program revealed medical
support enforcement deficiencies, and program officials were not
surprised.  The CSE director acknowledged that, in response to
legislative expectations that the program generate revenue, they had
focused their limited staff and automated resources on
revenue-generating program activities.  As a result, they did not
give medical support enforcement priority attention before the audit
because of the staff time and automated resources it would have
required. 


      WELFARE REFORM MAY FURTHER
      EXPAND CSE'S MISSION
-------------------------------------------------------- Chapter 2:1.4

Among other changes, some welfare reform proposals would expand the
responsibilities of CSE to create a central registry containing all
child support orders, even those not now enforced under the program. 
The states, through a central public agency, would be responsible for
collection and distribution of the payments.  All but one of the
proposals for including all orders in the program have criteria that
allow parents not to participate in the order registry and all would
allow parents not to participate with the central state collection
agency.  These proposals, however, might further move the focus of
the program's mission away from welfare recovery because a larger
portion of previously unserved non-AFDC families would be included. 


   PLANNING AND GOAL-SETTING
   EFFORTS FALL SHORT
---------------------------------------------------------- Chapter 2:2

In the face of multiple and sometimes competing expectations among
stakeholders, OCSE's past planning and goal-setting efforts have
failed to set program priorities or outcomes; they have focused on
OCSE's activities rather than on the CSE program as a whole.  OCSE
has not had a planning process that focused on outcomes for (1) the
program as a whole or (2) its role in leading the program. 
Furthermore, except for paternity establishment, national and annual
program goals that states are expected to achieve have not been
defined for the program.  The paternity establishment goals were
defined by the Congress when it legislated paternity establishment
standards in 1988.  While results-oriented planning has not been
legislatively required of OCSE in the past, it is recognized as an
important tool for effective program management, and GPRA now
requires it.\30

In response to the GPRA mandate for all federal agencies to develop
strategic plans by September 1997, OCSE has taken the initiative to
develop a strategic plan early.  In addition, OCSE is a GPRA
implementation pilot agency and, as such, is also preparing an annual
performance plan before one is required.  While this new planning
effort appears to be avoiding some past weaknesses by including
stakeholders and establishing long-term goals for the national CSE
program, several issues remain to be addressed as OCSE continues to
build its planning discipline. 


--------------------
\30 Our previous work (and that of others) has identified the
importance of strategic planning and outcome measurement to effective
program management.  See "Management Vision Needed" in Department of
Education:  Long-Standing Management Problems Hamper Reforms
(GAO/HRD-93-47, May 28, 1993) and explanation of strategic management
in Management of VA:  Implementing Strategic Management Process Would
Improve Service to Veterans (GAO/HRD-90-109, Aug.  31, 1990); Program
Performance Measures:  Federal Agency Collection and Use of
Performance Data (GAO/GGD-92-65, May 4, 1992); U.S.  Department of
Agriculture:  Revitalizing Structure, Systems, and Strategies
(GAO/RCED-91-168, Sept.  3, 1991); and Social Security:  Sustained
Effort Needed to Improve Management and Prepare for the Future
(GAO/HRD-94-22, Oct.  27, 1993). 


      PLANNING EFFORTS HAVE NOT
      FOCUSED ON OUTCOMES
-------------------------------------------------------- Chapter 2:2.1

Although expanding responsibilities established multiple priorities
for the CSE program over the years, OCSE had not engaged in a
planning approach that solicited stakeholders' ideas, identified
long-term goals for implementing the program's mission, or focused on
program outcomes.  Instead, previous planning efforts have
principally focused on OCSE, not the national program, with an
emphasis on process tasks and activities instead of on the desired
outcomes of these activities.  Past OCSE planning efforts were
abandoned or were focused primarily on implementing 1984 and 1988
amendments.  An early effort in 1980, entitled "Strategic Plan for
the 1980's," was developed by OCSE staff with input only from HHS
regional staff, not other stakeholders, but this plan was dropped a
year after it was produced. 

OCSE's more recent planning efforts, before its GPRA pilot status,
focused on its own activities rather than on what it planned to
accomplish with these activities.  For example, OCSE's plan listed
activities such as "award and monitor new technology transfer
contract" and "conduct judicial training conference using judicial
curriculum guide." However, the plan did not identify what outcomes
were expected or desired from these activities.  In addition, OCSE
did not develop or identify the indicators for measuring the
effectiveness of these activities in the plan, the tracking document,
or the periodic progress reports. 


      EXCEPT FOR PATERNITY
      ESTABLISHMENT, NATIONAL AND
      ANNUAL PROGRAM GOALS ARE
      MISSING
-------------------------------------------------------- Chapter 2:2.2

Although OCSE has advised state programs to develop goals, it has not
done so for the national program.  In the face of OCSE failure to set
national or annual goals, the Congress mandated performance standards
for state paternity efforts\31 in 1988 and amended them in 1993.\32
These paternity establishment standards effectively set a national
goal for all states to eventually attain and differing annual goals
for states, depending on their past paternity establishment
performance.  The standards hold all states accountable for improving
performance until they reach a maximum, rather than a minimum, level
of performance.  As shown in table 2.1, the paternity establishment
standard requires state programs to continuously improve on their
individual performance until at least 75 percent of the cases that
need paternity established have it established.  In addition, greater
proportionate improvement is required from low performers. 



                          Table 2.1
           
            Required State Paternity Establishment
               Percentages Based on Past Year's
                         Performance

              (For CSE cases requiring paternity
                        establishment)

Percentage established         Required annual increase
-----------------------------  -----------------------------
Less than 40                   6 percentage points

40 or greater but less than    5 percentage points
45

45 or greater but less than    4 percentage points
50

50 or greater but less than    3 percentage points
75

75                             None
------------------------------------------------------------
Source:  42 U.S.C.  652(g). 

In the absence of federally established goals in other areas, some
states have developed their own goals.  The Texas legislature, for
example, holds the CSE program accountable for meeting a series of
annual output and outcome goals.  Output goals are established for
such things as the number of (1) paternity actions filed, (2) notices
of delinquencies filed, and (3) income tax refund offsets submitted
to the Internal Revenue Service.\33 In addition, the Texas CSE
program has an efficiency goal for its collections-to-cost ratio. 
Outcome goals include the number of (1) paternities established, (2)
orders established or modified, and (3) collections obtained. 


--------------------
\31 The Senate Finance Committee stated in its report on the 1984 CSE
amendments that OCSE "has not fully implemented the requirements for
the establishment of standards of effectiveness." Child Support
Amendments, Report No.  98-387 (Apr.  9, 1984). 

\32 Because of technical problems with the modification, regulations
have not yet been issued implementing the revised standards. 

\33 Since our visit to Texas in 1993, the CSE program has changed its
output goals.  It no longer measures paternity actions filed. 


      OCSE IS BEGINNING TO BUILD
      RESULTS-ORIENTED PLANNING
      DISCIPLINE
-------------------------------------------------------- Chapter 2:2.3

In response to GPRA's mandate, OCSE is beginning to build a planning
discipline that includes stakeholders and defines expected results
and the means of measuring achievement, not just processes and
activities or the quantity of output.  OCSE is developing a strategic
plan intended to articulate the fundamental mission of the program
and establish long-range performance goals to implement its mission. 
Furthermore, unlike past planning efforts that did not include
program stakeholders, OCSE has assembled a core planning team of OCSE
and HHS regional office officials and state program representatives. 
In addition, OCSE has engaged state CSE program directors in the
planning process and held focus groups at a national CSE conference
to obtain comments and suggestions on its draft strategic plan from
advocates and CSE professionals. 

OCSE's August 10, 1994, draft strategic plan goes beyond what GPRA
requires of a strategic plan.  In addition to a program mission and
two general goals focusing on paternity and order establishment, OCSE
has defined numerous objectives and many quantitative performance
indicators for each goal.  In contrast to past planning efforts, the
objectives and performance indicators address such key areas as
paternity and order establishment and medical support enforcement as
well as collections.  Also, in terms of collections, an objective is
"to increase the collection rate" and various performance indicators
are listed that can be used to measure the accomplishment of this
objective.  Such an objective will help the program identify what
progress can be made in getting support payments for a larger
proportion of families rather than simply increasing the absolute
dollars collected. 

As a GPRA pilot project, OCSE has also developed an annual
performance plan for fiscal year 1995 before such a plan is required
from all federal agencies.  The annual performance plan is intended
to provide a direct link between the program's longer-term goals and
what state programs and OCSE's managers and staff will need to
accomplish each year.  According to GPRA and the Office of Management
and Budget guidance, such plans should include several elements such
as (1) one or more performance goals, (2) performance indicators that
will be used in measuring the goals, and (3) a description of the
means to be used to verify and validate measured values.  According
to an OCSE official, the performance plan was submitted to the Office
of Management and Budget by September 30, 1994, but it was not
available for our review.  However, another OCSE official said that
the performance plan is not so detailed as to contain outcome goals
for OCSE itself.  The same OCSE official said these matters may be
addressed in an in-house OCSE operating plan. 


      SOME ISSUES REMAIN TO BE
      ADDRESSED IN OCSE'S PLANNING
      EFFORTS
-------------------------------------------------------- Chapter 2:2.4

As of September 1994, OCSE's new planning efforts under GPRA had
avoided repeating some past planning weaknesses and omissions, but
OCSE had yet to address several important issues including outcomes
and effectiveness measures for its own activities.  However, OCSE
officials said they recognize that the planning process is ongoing
and that the strategic plan is a "living document" to which they
expect to make continuous revisions. 

OCSE's August 1994 draft strategic plan described some important
activities OCSE will undertake to achieve some of the plan's
objectives, but the plan does not define how OCSE will measure the
results of these activities or the outcomes expected from services
they currently provide to the states.  Failing to associate outcomes
with activities is a past weakness that OCSE has the opportunity to
correct through its current planning efforts, although it is not
required of the GPRA strategic plan.  For example, the plan states
OCSE will "conduct an in-depth assessment of OCSE regulations,
services, standards, and programs to identify contradictory and
confusing regulations, unnecessary or ineffective services, and
standards that do not contribute to customer service." However, OCSE
does not indicate how it will measure the accomplishments from this
activity.  In addition, OCSE has not defined outcomes for itself
regarding the services it provides to the states such as operating
the Federal Parent Locator Service and processing state requests for
federal tax refund interception by the Internal Revenue Service.\34
OCSE has also not provided outcomes for future timeliness of
regulations, responsiveness to states about audits and policy
questions, and regional HHS office commitment and feedback.  These
are the types of issues that OCSE will need to address if it is to
build a meaningful planning discipline.  An OCSE official told us
that OCSE's services and results will be addressed in subsequent OCSE
operating plans. 

Other issues that have not yet been addressed by the planning process
are the actions needed by OCSE or the Congress to align the existing
funding structure and audit approach with the CSE program's broad
mission.  However, an OCSE official told us that changes to the
funding structure and audit were contained in the Clinton
administration's welfare reform proposal submitted to the 103rd
Congress. 


--------------------
\34 Federal tax refunds may be intercepted by the Internal Revenue
Service and sent to state CSE programs to satisfy unpaid child
support obligations. 


   BETTER DATA ARE NEEDED FOR
   ACCURATE PERFORMANCE
   MEASUREMENT
---------------------------------------------------------- Chapter 2:3

Despite nearly 20 years of annual performance reporting, program data
remain seriously flawed because of inadequate reporting standards and
limited state reporting capabilities.  As we have reported in the
past, the resulting lack of accurate and consistent data hinders
meaningful planning, analysis, performance measurement, and
management improvement.\35 OCSE is attempting to improve program data
reporting, but its main effort has been on hold because of the
transition between administrations in 1993 and pending welfare
reforms that could alter reporting requirements.  Given these
circumstances, current data collection will not adequately support
the performance reporting GPRA requires. 


--------------------
\35 See Child Support:  Need to Improve Efforts to Identify Fathers
and Obtain Support Orders (GAO/HRD-87-37, Apr.  30, 1987). 


      STATES ARE REQUIRED TO
      REPORT PROGRAM DATA TO OCSE
      ANNUALLY
-------------------------------------------------------- Chapter 2:3.1

OCSE is mandated to prepare an annual report to the Congress no later
than 3 months after the end of each fiscal year using data reported
by the states.  This report is supposed to include, among other
information, program costs and collections, OCSE costs and staffing,
caseload size, and service data from the states.  Since 1977, there
have been 17 such annual reports with increasing amounts of
information about the CSE program. 


      OCSE HAS NOT DEVELOPED
      UNIVERSALLY UNDERSTOOD DATA
      REPORTING STANDARDS
-------------------------------------------------------- Chapter 2:3.2

OCSE has not developed universally understood or applied definitions
and procedures by which the individual state CSE programs can collect
and report data.  An unduplicated caseload count, essential for
accurate national program performance measurement, for example, is
difficult to obtain because of the lack of universally applied
definitions and procedures.  Within OCSE's definition of a "case,"
for example, differences occur in reporting because of different
state interpretations.  OCSE defines a CSE case as "every absent
[noncustodial] parent who is now or may eventually be obligated under
law for the support of one or more dependent children." Some
jurisdictions establish separate child support cases for each child
with a custodial mother for whom the father is not identified because
their fathers may be different; however, not all jurisdictions do
this.  Duplicate case counting can also occur when an AFDC case
becomes a non-AFDC case as the result of successful collection
efforts.  The family may be counted both as an AFDC case and as an
AFDC "arrears-only" case because delinquent child support is still
owed for the time the family was receiving AFDC. 

In addition, OCSE's description of when a case may be closed is open
to interpretation.  As a result, collection rate statistics as well
as total caseload figures can be misleading since all states are not
equally aggressive in closing cases.  OCSE has defined the criteria
for case closure, but it has not set a time frame within which a case
must be closed.  Consequently, states that keep cases open longer
than others may report higher caseloads and lower collection rates
than those that close cases as soon as they meet OCSE's case closure
criteria. 


      STATE DATA ARE NOT
      AVAILABLE, RELIABLE, OR
      CONSISTENT
-------------------------------------------------------- Chapter 2:3.3

Data basic to meaningful assessment of CSE program performance at the
state and local levels are not available from all states, reliable,
or consistent.  Information that is available in one of the states we
visited but not reported to OCSE, for example, includes the
proportion of cases needing different services, such as location of
the noncustodial parent, enforcement, wage withholding, and
collection monitoring.  Without this information, OCSE and state
programs cannot develop an accurate picture of caseload needs for
resource planning or measure progress in serving families.  For
example, simply knowing the absolute number of paternities
established in a given year does not give program managers or policy
analysts a way to measure the need for such a service. 

Both OCSE and state program officials told us that statistical
analyses using the state-reported data to determine effective
practices among states would be highly flawed because of poor data
quality and inconsistent reporting.  The percentage of collections
from wage withholding, for example, is significantly underreported by
one state program we visited because of limitations in its payment
processing system, according to program officials.  While this
information is reported to the Congress, the state program does not
find it a key piece of information for managing its operations. 
OCSE's annual reports contain numerous footnotes submitted by states
to explain year-to-year variances in their reported data; these
footnotes reveal the nature and range of problems casting doubt on
the reliability of program data.  Explanations for data variances
provided in state notes include such problems as the following: 

contamination of information,

lax data entry by the local office,

local failure to report data,

previous counting methodology resulting in inflated statistics, and

adjustments in reporting methods. 

Cost data are also questionable because of varied state practices. 
States use different methods to collect and compute expenditure data,
including caseload distribution, cost allocation, time studies, and
educated guesses.  Accounts receivable reported by states differ
according to their procedures for writing off debts, including
statutes of limitations, judgment-setting practices, and public
assistance debts laws.  Furthermore, states cannot accurately break
down administrative costs by service, such as establishing paternity,
locating noncustodial parents, and distributing support collections. 


      OCSE HAS TRIED TO IMPROVE
      DATA AND ESTABLISH
      PERFORMANCE INDICATORS
-------------------------------------------------------- Chapter 2:3.4

Recognizing that data quality is crucial to better program
management, OCSE has made efforts to improve data quality and
establish outcome-based performance indicators; but its main effort
was suspended in late 1993 until changes to CSE as part of welfare
reform are known.  OCSE's main effort in this area, Measuring
Excellence Through Statistics (METS), was implemented specifically to
improve the quality of state statistical and financial data
submissions.  It involved meetings with state CSE directors and ACF
regional staff and soliciting comments from all state CSE directors. 
Active from February 1992 through late 1993, METS encompassed efforts
to revise the forms and instructions states are required to use to
report program data, develop ideas for focusing the audit process on
outcomes, and develop results-oriented performance measures.  As of
April 1993, most reporting definitions and procedures had been
completed, except for a definition for accounts receivable and a
procedure for counting interstate cases that would protect against
double counting.  More recently, in September 1994, an OCSE official
told us that the audit staff is trying to build on the METS effort by
looking into how states interpret OCSE's data definitions as well as
evaluating state data collection systems and the quality of state
data. 


      CURRENT DATA COLLECTION WILL
      NOT ADEQUATELY SUPPORT GPRA
      PERFORMANCE REPORTING
-------------------------------------------------------- Chapter 2:3.5

OCSE's current data collection from the states will not be adequate
to support GPRA's performance reporting requirements.  In addition to
strategic and annual performance planning, GPRA requires annual
performance reporting starting in March 2000 on what was actually
accomplished and what goals were not met.  This is a critical element
for measuring the success of the planning efforts because reporting
provides essential feedback to managers, policymakers, and the
public.  Therefore, it is important that data collected regarding CSE
results be accurate.  Annual planning will be more difficult if the
inaccuracies and inconsistencies of past reporting are allowed to
continue. 


   FUNDING STRUCTURE NEEDS
   REEXAMINATION
---------------------------------------------------------- Chapter 2:4

Although performance-based incentive payments and funding flexibility
are consistent with GPRA's focus on encouraging results-oriented
government,\36 several problems with CSE's funding structure,
including the incentive system, warrant reexamination.  In addition
to not having good data, a major problem is the weak link between
performance and incentives.  Since states may use incentive payments
to fund other programs, not all states reinvest incentive payments in
the program; instead they deposit the payments in the states' general
revenue funds to be used to fund other programs.  Also, states that
do reinvest the funds in CSE frequently use the payments to cover a
variety of CSE operational costs, thus reducing state investment in
CSE, rather than supplementing state investment.  Welfare reform may
change this practice because some proposals include new funding
structures. 


--------------------
\36 The National Performance Review led by Vice President Gore also
emphasized results-oriented government. 


      INCENTIVE STRUCTURE WEAKLY
      LINKED TO PERFORMANCE
-------------------------------------------------------- Chapter 2:4.1

Despite congressional expectations, the present incentive structure
is weakly linked to performance.  Since 1984, the incentive payments
have been expected to "encourage states to develop and improve
efficient, cost-effective child support programs which balance
services for AFDC and non-AFDC cases, both interstate and
intrastate."\37 But all states, regardless of their performance as
defined by collection-to-cost ratio, receive some incentive payments. 
In addition, continued minimal performance will still earn a state
incentive payments.  In contrast to the paternity establishment
standards, goals are not set for improvement in ratios either year to
year or over the long term.  In effect, the potential of this
structure as a management tool to change state performance is
limited.  OCSE has recognized the shortcomings in the existing
structure, but proposed changes have not yet been enacted. 

Under the present incentives structure, all states receive incentives
of at least 6 percent of their AFDC and non-AFDC collections,
regardless of their collections-to-cost ratio.  States achieving
ratios of between 1.4 and 2.8 can earn up to 10 percent of their
collections depending on their achieved ratio.  As the Congressional
Research Service has observed, "under the current financing
arrangement, states can run inefficient programs and still make a
profit from the CSE program."\38

In practice, few states earn the maximum incentive payments.  An
analysis of the collection-to-cost ratios for AFDC collections for
fiscal years 1986 through 1992 showed most states earned 6 to 7
percent incentive payments on AFDC collections.  In addition, fewer
than five states earned the maximum of 10 percent each year.  See
figure 2.1 for this distribution. 

   Figure 2.1:  Distribution of
   Child Support Enforcement
   Incentive Payments Based on
   AFDC Collection-to-Cost Ratio,
   Fiscal Years 1986-1992

   (See figure in printed
   edition.)

Source:  OCSE annual reports. 

During the same period, fiscal years 1986 through 1992, several
states earned non-AFDC incentives from 7.5 to 8.5 percent, and 6 to
18 states earned the maximum non-AFDC incentive.  However, few of
these states were able to take advantage of the full incentive earned
because the dollar amount of the incentive payments is capped at an
amount equal to 115 percent of the AFDC incentive payments.  See
figure 2.2 for this distribution. 

   Figure 2.2:  Distribution of
   Child Support Enforcement
   Incentive Payments Based on
   Non-AFDC Collection-to-Cost
   Ratio, Fiscal Years 1986-1992

   (See figure in printed
   edition.)

Source:  OCSE annual reports. 

Note:  States may not receive the full dollar amount reflected in the
percentages because the dollar amounts are capped at 115 percent of
the AFDC incentive payments. 

OCSE has recognized the limitations of the incentive payment
structure and has made two separate legislative proposals to make the
structure more performance-based.  In 1991, OCSE proposed rewards for
performance in such activities as paternity establishment, order
establishment, and AFDC terminations resulting from child support
collections.  It also suggested reducing incentives for
cost-effectiveness.  In addition, the proposal would have required
states to reinvest the incentives in CSE.  Officials at OCSE,
however, said that the proposal was not pushed because of the change
in administrations.  Currently, OCSE is proposing to eliminate
incentive payments and replace the entire funding structure with a
graduated matching formula that would recognize different levels of
state program performance.  Under this proposal, certain levels of
performance in at least five key areas would be rewarded with a
larger federal match:  (1) paternity establishment, (2) support order
establishment, (3) the portion of child support cases in which
payments are received, (4) the amount of collections compared to
support owed, and (5) cost-effectiveness.  Proposed legislative
language for this type of funding structure was incorporated in the
administration's 1994 welfare reform bill.\39


--------------------
\37 Child Support Enforcement Amendments of 1983, Committee on Ways
and Means, U.S.  House of Representatives, H.R.  Rep.  No.  98-527,
(Nov.  10, 1983), p.  41. 

\38 The Child Support Enforcement Program:  Policy and Practice, U.S. 
Congress, House Committee on Ways and Means, Subcommittee on Human
Resources (report prepared by the Congressional Research Service),
101st Cong., 1st sess., 1989, Committee Print WMCP 101-19. 

\39 The administration's proposal is contained in H.R.  4605 and S. 
2224 introduced in the 103rd Congress. 


      INCENTIVE FUNDS ARE
      SOMETIMES USED TO SUPPLANT
      RATHER THAN SUPPLEMENT OTHER
      STATE CSE FUNDING
-------------------------------------------------------- Chapter 2:4.2

Although many states do use at least some portion of the incentive
payments to fund their CSE programs, the funds are sometimes used as
part of the state match for federal funds rather than supplementing
the state CSE budget and further expanding the program.  In 1991,
HHS' Office of Inspector General reported that nine states had laws
or regulations that specifically mandated how incentives must be
used.\40 In those nine states, incentive payments were passed along
to local CSE operations or credited directly to the CSE program.  Of
the remaining states, 36 said they directed all or some portion of
incentive payments to CSE.  Those states indicated that they used
incentive payments for CSE activities, including ongoing CSE
operations, improving CSE automated systems, piloting CSE
demonstration projects, and funding additional CSE agency employees. 
Ten states had used incentive payments to fund special CSE projects
such as (1) a support order review and modification demonstration,
(2) contracting with a private collection agency to pursue very
difficult cases, and (3) automation development and preparation of
cases for data entry or conversion to new systems. 

Further work by the Office of Inspector General and a survey of
states conducted by Delaware found that incentive monies were used to
make up the states' share of the CSE programs' operating or
administrative costs.  In a follow-up audit of nine selected states
in 1991, the Office of Inspector General found, "Federal CSE
incentives generally were used for the CSE program, reducing or
eliminating the need for state/local general funds to fulfill
matching requirements."\41 In Arizona, for example, the audit
revealed that 70 percent of the incentive payments was used to reduce
state or local program costs.  The Inspector General concluded,
"[T]he primary impact of incentive payments is that state CSE
programs are funded, sometimes exclusively, by the federal government
through the federal cost share and incentives." In fiscal year 1992,
approximately 84 percent of states' total CSE administrative costs
were reimbursed by the federal government through matching funds and
incentive payments. 


--------------------
\40 See Child Support Incentive Payments, HHS, Office of Inspector
General, Report #OEI-05-91-00750 (June 1991).  "States" refers to the
50 states, the District of Columbia, the Commonwealth of Puerto Rico,
and the territories of Guam and the Virgin Islands. 

\41 See The Use and Equity of Child Support Enforcement Incentive
Payments at Selected States, HHS, Office of Inspector General, Report
#A-09-91-00034 (Apr.  22, 1992).  The nine states were Alabama,
Arizona, California, Kentucky, Michigan, New Mexico, New York,
Pennsylvania, and Washington. 


      WELFARE REFORM PROPOSALS
      INCLUDE DIFFERENT FUNDING
      STRUCTURES
-------------------------------------------------------- Chapter 2:4.3

Three of the eight welfare reform proposals we reviewed would
eliminate the existing incentive payment system and allow increasing
federal match rates for different levels of performance.  Under one,
for example, states could earn a 5-percent increase in the match rate
for improved performance establishing paternities and a 10-percent
increase for improved overall performance.  All three proposals would
reward paternity establishment performance.  In addition, one of the
three proposals would reward state compliance with program and
staffing standards.  The other two propose aligning the funding
structure with overall performance in a number of key areas, not just
cost-effectiveness.  Overall performance would include performance in
(1) the areas of support order establishment, (2) child support cases
in which payments are collected, (3) amount of collections compared
with support owed, and (4) cost-effectiveness, as defined by the
Secretary of HHS.  By changing the funding structure to one that uses
a matching formula exclusively, these proposals may eliminate some of
the complexity in the current arrangement.  The only expenditures
that would be matched with federal funds would be CSE program
expenditures.  States would no longer receive incentive funds that
(1) may be reinvested in the CSE program or spent elsewhere, (2) must
be shared with local jurisdictions, and (3) are complicated to
forecast because of the effect of the cap on non-AFDC incentives. 

Under all three proposals, the maximum federal matching rate a state
could achieve would be equivalent to 90 percent of the state's
costs--if that state achieved the highest level of performance. 
However, it is difficult to predict if any of the three proposals
would actually increase total federal costs.  We do not know how many
states, if any, will achieve maximum performance under two of the
proposals because the performance goals are not yet defined.  Under
the third proposal, a state would have to establish paternity in at
least 80 percent of the cases needing paternity establishment, meet
the program standards in at least 80 percent of the cases, and comply
with staffing requirements set by the Secretary of HHS.  To date,
very few states have been able to establish paternity in 80 percent
of the cases needing it, according to data reported by the states. 


OCSE HAS NOT EFFECTIVELY FULFILLED
ITS ROLE OF FOSTERING STATE CSE
PROGRAM DEVELOPMENT
============================================================ Chapter 3

Although the Congress envisioned that OCSE would take an aggressive
role in ensuring that states develop strong and effective CSE
programs, OCSE has not done so.  Specifically, the Congress tasked
OCSE with providing leadership, technical assistance, and standards
for the CSE program as well as monitoring state programs.  But as the
program evolved, OCSE's ability to direct, assist, and communicate
with state CSE programs did not keep pace with growing requirements. 
An HHS-wide reorganization left OCSE with little or no control over
HHS regional staff who deal with state CSE program staff.  In
addition, its financial resources were reduced, nearly eliminating
funding for training and technical assistance contracts to the
states.  Subsequently, communications between OCSE, HHS regional
staff, and state program officials deteriorated, and working
relationships became strained.  On several occasions, OCSE has
finalized regulations after the statutory effective dates of the
legislated provisions, creating uncertainties for state programs. 
Also, while OCSE audits--its principal tool for monitoring state
programs--have spurred state action in some cases, these audits have
focused more on compliance with administrative procedures than on
program outcomes.  The audits have provided limited insight into how
state programs could achieve better program results, and have come
too late to be useful to some states.  OCSE recognizes it needs to
revise its audit approach and is taking steps to do so.  Program
personnel in many of the states we visited wanted more training and
technical assistance from OCSE; some of these officials also
expressed a desire to be more involved as OCSE drafts regulations. 


   OCSE STAFF, FINANCIAL, AND
   TECHNICAL ASSISTANCE RESOURCES
   REDUCED
---------------------------------------------------------- Chapter 3:1

Since the mid-1980s, OCSE's ability to fulfill its mission has been
affected by an HHS-wide reorganization and workforce reductions.  The
number of staff directly accountable to OCSE and OCSE's financial
resources decreased.  OCSE's capacity to provide on-site technical
assistance to states, through both contracts and OCSE and regional
staff, has nearly been eliminated.  All areas in OCSE, such as policy
development, program operations, and audits, experienced staff
reductions; but today, more OCSE staff remain devoted to audits than
technical assistance. 


      HHS REORGANIZATION AND
      RESOURCE REDUCTIONS
-------------------------------------------------------- Chapter 3:1.1

As the result of a fiscal year 1986 HHS-wide reorganization, regional
staff devoted to CSE activities are no longer directly accountable to
OCSE but instead report to HHS regional administrators.  In 1986,
OCSE was combined with five other major HHS programs, including AFDC,
into the Family Support Administration to emphasize the family.  (In
1991, the Family Support Administration became the Administration for
Children and Families [ACF].) In addition to regional staff, OCSE's
budgetary and administrative functions and automated systems unit
were transferred to other Family Support Administration units.  This
reorganization changed the composition of OCSE staff and the amount
of resources OCSE had at its disposal.  To illustrate, in fiscal year
1986, before the reorganization, OCSE controlled 342 full-time
positions--95 in regional offices and 247 in OCSE's Washington, D.C.,
office and area audit offices located around the country.  In fiscal
year 1987, however, after losing control of CSE regional office
staff, OCSE's authorized positions dropped to 151. 

In addition to the loss of direct accountability from regional,
financial, and information systems staff, OCSE's staff devoted to
technical assistance, training, policy, planning, evaluation, audit,
and research and regulations\42

was also reduced.  From fiscal year 1980 to 1992, OCSE staff assigned
to these activities decreased from 181 to 151.  See figure 3.1.  From
fiscal year 1987 to 1992, staffing of the OCSE division responsible
for training and technical assistance declined 37 percent, from 43 to
27. 

   Figure 3.1:  Staff Directly
   Accountable to OCSE, Fiscal
   Years 1980-1992

   (See figure in printed
   edition.)

Note:  Fiscal year 1982 numbers not available. 

Source:  OCSE annual reports. 

OCSE financial resources were also reduced beginning in the
mid-1980s.  Along with the staff resources that were removed from
OCSE's control after the 1986 reorganization, OCSE's financial
resources were reduced by over 50 percent.  Part of this reduction
included about $2 million in contracts for technical assistance,
publications development, data processing, and other services.  From
fiscal year 1986 to 1987, these contracts declined from $5.3 million
to $3.2 million.  Total financial resources under OCSE's direct
control in fiscal year 1992 were $10.4 million compared with $21.3
million in fiscal year 1986 when the regions were under OCSE's
control.  See
figure 3.2. 

   Figure 3.2:  OCSE Financial
   Resources, Fiscal Years
   1980-1992

   (See figure in printed
   edition.)

Note:  The drop in OCSE's resources from $21.3 million in FY 1986 to
$9.8 million in FY 1987 reflects an HHS reorganization during FY 1986
in which OCSE lost direct control of regional CSE staff and
headquarters financial and information systems staff. 

Source:  OCSE annual reports. 


--------------------
\42 That is, excluding financial and information systems management,
and regional office staff transferred to other parts of ACF during
1986. 


      TECHNICAL ASSISTANCE AND
      TRAINING TO STATES GREATLY
      REDUCED
-------------------------------------------------------- Chapter 3:1.2

Despite its mission to provide technical assistance to state CSE
programs, OCSE's resources for both direct and contracted work of
this kind have been reduced.  Throughout the 1980s, OCSE funded
several contracts for training and technical assistance, but today
has none.  Also during the 1980s, particularly the early 1980s, both
OCSE headquarters and regional staff provided extensive, direct,
on-site technical assistance to the states and conducted formal
management studies of local and state programs.  Joint management
studies are no longer done and on-site technical assistance is
minimal in most regions.  In fiscal year 1992, fewer than a quarter
of OCSE's staff were devoted to providing training and technical
assistance.  Of OCSE's fiscal year 1992 staff of 151, 86 people, or
57 percent, were devoted to conducting compliance audits.  OCSE funds
for contracted training and technical assistance have been
eliminated.  OCSE officials said that in the early 1980s the office
had contracting authority for $3 million in training and technical
assistance.  By fiscal year 1990, however, this had been reduced to
$1 million and by fiscal year 1993 to $300,000.  OCSE officials said
they had no funds for contracted training and technical assistance in
fiscal year 1994.  OCSE's total contracts for publications
development, printing, data processing, and other services, as well
as training and technical assistance, were reduced from $7.1 million
in fiscal year 1985 to $2.1 million in fiscal year 1992.  At least
six technical assistance efforts funded through contracts in the
1980s are no longer funded:  (1) transferring best practices; (2)
training state, local, and federal personnel; (3) assisting states in
drafting legislation; (4) providing orientation and training to state
judges and judicial and quasi-judicial staff; (5) providing links
with the legal community of court clerks, the private bar, and
prosecutors; and (6) publishing educational articles. 

In addition, in the first half of the 1980s, when HHS regional
offices were still directly in the chain of command to OCSE, they
provided extensive on-site technical assistance to state programs;
they no longer do.  They conducted formal management studies of local
and state programs, sponsored conferences for judges, and met with
and testified before state legislative committees.  Regional staff
also made presentations before public interest groups; state and
local officials, including legislators, court personnel, judges,
attorneys, and child support administrators; and others; and
participated in educational panels.  They also helped write
television and radio public service announcements, assisted in
drafting state legislation, and appeared on television and radio talk
shows.  At the time of our review, most HHS regions were providing
minimal on-site technical assistance to states. 

OCSE and regional office staff jointly conducted comprehensive
management reviews of state programs and provided on-site technical
assistance during the early 1980s.  Today, OCSE staff's technical
assistance efforts are limited primarily to participating in national
conferences, distributing pamphlets and self-help guides, writing
letters, making telephone calls, and posting information on
electronic bulletin boards.  In fiscal year 1981, OCSE's program
operations division performed 14 management reviews; whereas in
fiscal year 1993, OCSE officials said they no longer do management
reviews. 

The OCSE division director responsible for technical assistance told
us the small staff and travel budget devoted to technical assistance
severely limits their ability to compile and disseminate best
practices and provide direct on-site training and assistance to state
programs.  In February 1993, 25 OCSE staff were devoted to training
and technical assistance.  At the same time, the travel budget for
these staff was limited to $10,000.  The OCSE official said that
staff responsible for technical assistance are able to meet with
regional offices only once a year; they have monthly telephone
conference calls in lieu of more frequent personal contact. 


   HHS CURRENT ORGANIZATION FOR
   CSE HAS NOT BEEN THE MOST
   EFFECTIVE
---------------------------------------------------------- Chapter 3:2

The current organization of CSE responsibilities within HHS has not
been the most effective for providing program leadership.  OCSE's
ability to communicate, direct, and assist state programs is limited. 
For example, OCSE has no direct control over HHS regional resources
for CSE, has no process for feedback from the regions on CSE work,
and receives no definite up-front commitment of regional office
resources to CSE.  Furthermore, state CSE programs must deal with
several points of contact at the federal level.  Under this
organization, misunderstandings and miscommunications of program
policy and requirements have occurred between states, HHS regional
offices, and OCSE. 


      REGIONAL OFFICE CSE
      RESOURCES NOT ACCOUNTABLE TO
      OCSE
-------------------------------------------------------- Chapter 3:2.1

OCSE has no direct control over CSE regional resources and no formal
process for feedback from the regions.  Before the 1986
reorganization that created the Family Support Administration (which
later became ACF), regional CSE staff were directly accountable to
OCSE.\43 Under the current organization structure, all regional staff
report to regional administrators for ACF.  These administrators must
balance resources among all ACF programs, including CSE, to meet
mandated ACF program requirements.  However, there is no process for
getting firm, up-front regional office commitment of resources to the
CSE program--OCSE can only set priorities for areas of state programs
to be examined by regions. 

In addition, there is no formal process for regional office feedback
to OCSE on the results of their expenditure of resources on CSE. 
ACF's director of regional operations staff officials told us that it
was impossible to determine the dollars and staff time spent by the
HHS regional offices for CSE state technical assistance, training, or
program reviews because of the intermingling of funds that occurred
after the 1986 reorganization.  Also, OCSE officials did not know if
certain regional efforts cited in ACF's strategic plan for
performance by regions were accomplished; they said the regions had
not reported on them.  For example, the plan stated that regions were
going to develop joint plans with states to increase AFDC recovery
and the number of paying cases, but OCSE did not know what had been
done. 


--------------------
\43 The April 1991 reorganization combined the Family Support
Adminstration, HHS' Office of Human Development Services and the
Maternal and Child Health block grant programs administered by the
Public Health Service into ACF, where OCSE remains today. 


      SEVERAL POINTS OF CONTACT
      FOR STATES
-------------------------------------------------------- Chapter 3:2.2

HHS' organization of CSE responsibilities affects communication with
state programs.  Currently, states must deal with at least five
different HHS units for their CSE programs as illustrated in figure
3.3.  An HHS regional official said it is confusing for the states to
be dealing sometimes directly with OCSE for some things and other
times with the regions.  The nature of these contacts is summarized
in table 3.1. 

   Figure 3.3:  HHS Points of
   Contact for State CSE Programs

   (See figure in printed
   edition.)

Note:  Highlighted boxes show states' points of contact within HHS. 



                         Table 3.1
          
            HHS Points of Contact for State CSE
                          Programs

HHS organizational
unit                  Nature of contact
--------------------  ------------------------------------
OCSE, Washington,     Federal tax refund intercepts;
D.C.                  checks of Internal Revenue Service
                      information; federal parent locator
                      service; requests for waivers of
                      program requirements; and
                      verification of social security
                      numbers with the Social Security
                      Administration

HHS regional offices  State plan submission and approval;
                      exemption requests; required data-
                      reporting reviews; and financial
                      systems reviews

ACF Office of         Matters concerning certification of
Information Systems   child support computer management
and Management,       information systems
Washington, D.C.

OCSE area audit       Compliance audit scheduling and
offices and           issues
Washington, D.C.

HHS Office of         Independent investigations of the
Inspector General     CSE program
----------------------------------------------------------

      POOR COMMUNICATION BETWEEN
      OCSE, STATES, AND REGIONS
-------------------------------------------------------- Chapter 3:2.3

The HHS reorganization placing CSE regional office staff in a
different chain of command rather than having them report to OCSE
impaired CSE communications between OCSE, the regions, and the
states.  An HHS regional CSE official said the added layers of
bureaucracy impeded communication with states and their communication
with OCSE.  Similarly, OCSE officials confirmed there have been
communication breakdowns with the regions.  They said that regional
staff have misconstrued information and communicated inaccurate
information to the states. 

States have complained of vague and inconsistent policy
interpretations from OCSE and HHS regions.  One state CSE director
described communication channels as "convoluted layers," similar to a
"black hole" where things just "disappear." In addition, state
representatives testified in 1991 before the congressionally
established Commission on Interstate Child Support that CSE policy
was often interpreted differently by HHS regional offices and OCSE
auditors.\44

During our visits to eight states in summer 1993, program officials
in one state cited OCSE guidance about the requirement to review and
adjust support orders every 3 years as an example of unclear and
untimely communication.  Though the required implementation deadline
was October 1993, these state officials were not clear what date
should be used as the base date for the 3-year review cycle in
situations in which families go off AFDC and later go back on.  They
could not discern from the regulations which of at least three
possible dates could start the review cycle:  (1) the date the family
first went on AFDC, (2) the date the family went off AFDC, or (3) the
date the family went back on AFDC. 


--------------------
\44 Supporting Our Children:  A Blueprint for Reform, U.S. 
Commission on Interstate Child Support (Washington, D.C.:  Government
Printing Office, 1992), p.  249.  The Commission was charged by
statute to make recommendations on improvements to the interstate
establishment and enforcement of child support awards. 


   WORKING RELATIONSHIPS STRAINED
---------------------------------------------------------- Chapter 3:3

Working relationships between state programs and OCSE and HHS regions
have been more adversarial than cooperative.  State officials cite
the need for more technical assistance and timely regulations from
OCSE rather than policing of processes.  According to state
officials, the untimeliness of regulations has made it more difficult
for them to comply with the law.  In some cases, the late issuance of
regulations caused them to go back to their legislature to request
additional legislative changes.  State officials also want more input
into regulations development. 


      STATES WANT MORE TECHNICAL
      ASSISTANCE
-------------------------------------------------------- Chapter 3:3.1

Many state officials we talked with want more technical and training
assistance from OCSE and HHS regions, like that done in the past. 
State officials want more nationwide training from OCSE and help in
developing their own training capabilities.  They believe the HHS
regional offices need to be more proactive in sharing information
with the states and helping states provide additional support to one
another. 


      SOME STATES AND HHS REGIONAL
      STAFF TRYING NEW MODEL FOR
      COOPERATIVE TECHNICAL
      ASSISTANCE
-------------------------------------------------------- Chapter 3:3.2

In the face of diminished OCSE resources for technical assistance,
states in two federal regions are developing model approaches to
providing technical assistance and training.\45 States in one region
have established a steering committee composed of the chief executive
officers of states' human service agencies and the ACF regional
administrator.  The ultimate goal is better coordination of human
services.  Under the steering committee, four work groups address (1)
child support enforcement, (2) welfare reform, (3) child welfare
services, and (4) administration and organizational issues.  The
child support enforcement work group is focusing on common training
needs and federal-state communication. 

In another region, state child support training coordinators are
forming a regional training network.  The idea originated during a
national training conference in 1991.  The group plans to share
materials, attend each others' training sessions, develop training
packages for line workers, and serve as consultants to each other and
to their CSE directors. 


--------------------
\45 The regions are Region VII and X.  Region VII is Iowa, Kansas,
Missouri, and Nebraska.  Region X is Washington, Oregon, Idaho, and
Alaska. 


      UNTIMELY REGULATIONS MAKE
      STATES' IMPLEMENTATION MORE
      DIFFICULT
-------------------------------------------------------- Chapter 3:3.3

Some officials from the states we visited complained that OCSE's late
issuance of federal regulations made it difficult for them to pass
required state legislation and comply with the law in time and
damaged the program's credibility with state legislatures.  As shown
in table 3.2, for example, final regulations implementing
requirements in the 1988 amendments for wage withholding on
delinquent non-AFDC cases and all new or modified CSE cases were
issued in July 1992, almost 1-1/2 years after the November 1990
statutory effective date. 



                         Table 3.2
          
           Statutory Effective Dates and Dates of
             Final Regulations for Selected CSE
                    Program Requirements

                              Statutory       Dates of
                              effective       final
Program requirement           dates           regulations
----------------------------  --------------  ------------
Wage withholding on           November 1990   July 1992
delinquent non-AFDC cases
and all new or modified IV-
D cases\a

Presumptive state             October 1989    May 1991
guidelines\b

Medical support in all        August 1984     September
orders\c                                      1988
----------------------------------------------------------
\a Wage withholding is a procedure by which automatic deductions are
made from wages or income to pay a debt such as child support.  It
may be voluntary or involuntary. 

\b Presumptive guidelines are a standard method for setting child
support orders based on the income of the parent(s) and other
factors.  Child support orders set according to the guidelines are
presumed to be correct.  Judges and others must use the state
guidelines or demonstrate that the application of the guidelines
would be unjust or inappropriate in a particular case. 

\c Medical support includes (1) legal provision for payment of
medical and dental bills or (2) access to the noncustodial parent's
medical insurance or (3) both. 

In the absence of federal regulations, states are left to interpret
laws on their own.  When regulations are issued later, they may have
provisions in them that make state law incorrect or otherwise require
state CSE program officials to go back to their legislatures for
changes.  In 1989, at the time of proposed regulations governing use
of presumptive state guidelines, OCSE proposed additional
requirements only 1 month before the statutory effective date--long
after such requirements should have been known.  State officials
complained that some requirements would cause undue burden on those
who had taken steps in good faith to achieve compliance but now would
be out of compliance. 

Even when OCSE has responded to legislation by issuing regulations
promptly, state officials often find themselves having to address
later revisions.  For example, regulations establishing time frames
for distribution of support in interstate cases were required by
statute to be issued by August 1989 and were, but OCSE made
significant modifications--in essence finalized the
regulations--almost 2 years later in May 1991. 


      SOME STATES WANT A MORE
      COLLABORATIVE APPROACH TO
      DEVELOPING REGULATIONS
-------------------------------------------------------- Chapter 3:3.4

Some program officials in the states we visited suggested a new
approach to developing regulations in which OCSE would solicit more
involvement from states earlier in the process.  Some believed that
OCSE does not get enough state input before proposing regulations or
does not adequately respond to state comments on the impact of
implementing new policies and proposed regulations.  These officials
believed the approach currently used for developing federal
regulations provides for state comments too late and does not
encourage a federal-state dialogue.  They would like to see states
involved before proposed regulations are drafted, when OCSE is
wrestling with the issues.  One program official suggested an
alternative approach in which OCSE would identify issue areas and use
HHS regional CSE specialists to discuss the issues with the states
and collect ideas from the states for OCSE.  Program officials in
other states believed this approach would allow states to participate
in the process well before the regulations are drafted and public
comments are solicited.  They also believed this approach would save
time by reducing state comments later, after the draft regulations
are published.\46


--------------------
\46 What the states suggested is essentially similar to "regulatory
negotiation" recommended by the Administrative Conference of the U.S. 
in 1982 and 1985.  The conference noted that "bringing interested
parties together in a cooperative setting at the front end of the
rulemaking process .  .  .  has the capacity to reduce the likelihood
of litigation, to produce faster and less costly rulemaking--and to
create objectively better rules." David M.  Pritzker and Deborah S. 
Dalton, Negotiated Rulemaking Sourcebook, Office of the Chairman,
Administrative Conference of the United States (Washington, D.C.: 
Jan.  1990). 


   AUDITS PROVIDE LIMITED INSIGHT
   INTO PROGRAM OUTCOMES, BUT
   STILL SPUR STATE ACTIONS
---------------------------------------------------------- Chapter 3:4

OCSE compliance audits as presently structured provide only a partial
picture of state performance.  The audits provide little insight into
ultimate case outcomes and the extent to which the actions taken have
been productive.  The audits focus on compliance with federal
requirements for written procedures and service delivery and thus
highlight what state programs have not done, rather than what state
programs have accomplished and what methods have been particularly
successful.  In addition, audits are untimely with final formal audit
reports sometimes issued a full 2 years after the period of
performance audited.  Although state officials complained that audits
are too late to be a useful management tool for them, they
acknowledged that the audits and the threat of penalties have helped
their programs get state legislative attention and resources.  To
ensure compliance with OCSE regulations for program standards in
anticipation of audits and to improve program management, some states
are developing internal auditing and monitoring capabilities.  OCSE
is attempting to make the audits more outcome-focused and timely. 


      AUDITS ASSESS COMPLIANCE
      WITH ADMINISTRATIVE
      PROCEDURES MORE THAN
      OUTCOMES
-------------------------------------------------------- Chapter 3:4.1

Despite congressional pressure to measure states' program
effectiveness, OCSE has continued to rely on an audit approach that
has over 50 compliance criteria and three performance indicators to
judge program effectiveness.  The performance indicators are limited
to measuring three outcomes:  AFDC and non-AFDC collections-to-cost
ratios and AFDC recovery rates; they do not address other CSE
functions such as paternity and order establishment.  The compliance
criteria include 29 criteria with numerous subcriteria for auditing
state compliance with federal requirements for certain procedures,
such as written procedures for publicizing the availability of
support enforcement services.  In addition, there are 23 criteria
with numerous subcriteria for ensuring that states are providing
child support services in accordance with their approved state plans. 

In the past, OCSE has considered an effective state program one that
is in substantial compliance with both aspects of the audit: 
performance indicators and compliance criteria.  To determine
substantial compliance with the performance indicators, the level of
state performance reached in each of the three performance indicators
is assigned a numerical score.  A state's combined score must equal
or exceed 70 for substantial compliance.  To determine substantial
compliance with the criteria, OCSE auditors examine state written
procedures to determine whether they (1) comply with federal laws and
regulations and (2) are used in 75 percent of the cases sampled.  In
addition, each sampled case may be audited for more than one
criterion.  For example, a case may be reviewed for its compliance
with both location and paternity establishment criteria. 
Furthermore, a case may fail one criterion but pass another, and thus
be counted as deficient in one instance and acceptable in
another--regardless of the case's ultimate outcome. 

OCSE believes that this audit approach is performance-based.  In
addition, OCSE believes the audits provide clear indicators of state
program performance because they highlight what services were not
provided by states during the audited period.  However, determining
compliance--the extent to which procedures are in place and actions
are taken on cases--does not include an assessment of the
effectiveness of the states' procedures in achieving the desired
outcomes such as paternity and support order establishment.  In
addition, while many states have failed the compliance criteria, only
3 states have also failed to achieve a score of at least 70 on the
performance indicators since fiscal year 1986.  Therefore, audit
results present a limited view of state performance. 


      AUDITS TOO LATE TO BE USEFUL
-------------------------------------------------------- Chapter 3:4.2

The usefulness of compliance audits for judging state performance is
also limited because they are not done in a timely fashion.  In some
instances, final formal audit reports were issued 2 years after the
period of performance audited.  In addition, OCSE has yet to audit
state implementation of the Family Support Act of 1988 because the
audit regulations are not yet final. 

State officials, HHS regional staff, and advocates shared the view
that the audits' usefulness is limited.  State officials expressed
confusion over the timing and purpose of the audits and believed that
penalties were often applicable to past conditions that no longer
exist.  In addition, some HHS regional CSE specialists told us the
audit reports are too late to be useful to the states. 


      STATES SAY AUDITS PROVIDE
      SOME IMPETUS FOR CHANGE
-------------------------------------------------------- Chapter 3:4.3

Although state officials complained about the utility and timing of
compliance audits, some acknowledged positive effects from audits. 
Program officials acknowledged that audits and penalties or the
threat of penalties\47 have helped their programs get state
legislative attention and resources.  With the attention of their
legislatures, states were able to make a number of legislative,
procedural, and system changes to correct deficiencies and hire
additional staff.  In addition, some states said the audits were
useful in getting offices to use the administrative process. 


--------------------
\47 Approximately $21 million in audit penalties have been assessed
Ohio, New Mexico, Arizona, Mississippi, the District of Columbia,
Guam, the Virgin Islands, and Puerto Rico as a result of OCSE
compliance audits since 1975. 


      SOME STATES HAVE DEVELOPED
      THEIR OWN PROGRAM MONITORING
      STRATEGIES
-------------------------------------------------------- Chapter 3:4.4

Some states have developed their own internal audit procedures and
monitoring systems to ensure compliance with federal standards and
provide more timely performance evaluation for program management. 
Although OCSE is not yet auditing state programs for requirements of
the 1988 amendments, some states are auditing themselves against
these requirements.  OCSE considers a number of state efforts
exemplary and highlighted seven states' internal monitoring programs
in an information memorandum to all states in early 1993.  In
addition, our review of eight states identified some additional
efforts. 

In California, for example, county performance is reviewed annually,
feedback from state evaluators is described as immediate, and
follow-up on corrective action plans for noncompliance is quarterly. 
California formed a separate unit that does the reviews in 21 small
counties.  That unit also validates reviews done in 37 larger
counties by local staff who are trained by the state in the review
methodology and funded by the state.  Several counties have
incorporated software in their case management systems for tracking
time frames, which has helped the state prepare for statewide
automation by increasing the uniformity of case management throughout
the state.  An analysis of the review efforts showed marked
improvement in county compliance with federal program operation
standards. 

In another state, Delaware, the quality control system that has been
developed evaluates not only the performance of the CSE agency but
also that of the Delaware Family Court.  An automated sampling
process ensures that cases selected had activity in the specified
program area being examined during the specified time period. 


      OCSE IS TRYING TO CHANGE ITS
      AUDIT PROCESS
-------------------------------------------------------- Chapter 3:4.5

Over the last few years, OCSE has been trying to change the audit
process, and its officials are on record that the audits need to be
more outcome-oriented.  Working with state CSE program directors and
the National Governors' Association, OCSE has been exploring ways to
make the audits more outcome-oriented and has taken both a regulatory
and legislative approach to effect a change. 

In September 1993, OCSE published proposed revisions to existing
audit regulations that officials did not believe required any
statutory changes.  In the proposed approach, achievement of desired
case outcomes in sampled cases would take priority over compliance
with process and time frames in determining substantial compliance. 
If a desired outcome, such as paternity establishment, was achieved
in a case during the time period audited, the case would be
considered compliant; deviations from the process or time frames
leading to that outcome would not be counted as noncompliant.  If a
desired outcome was not achieved, then the case would have to meet
process and time frame criteria. 

The proposed regulations, however, would not add new performance
indicators or revise the current indicators that are limited to
cost-effectiveness and AFDC recovery.  OCSE has chosen to delay
revisions to the performance indicators until more refined indicators
can be devised and states have had sufficient time to implement the
new standards. 

While the proposed audit regulations would reduce some requirements,
they would add others, making their net effects on audit timeliness
difficult to predict.  Although the proposed audit regulations
combine and consolidate current criteria, they would add many
significant criteria to allow the auditing of compliance with
provisions of the 1988 amendments.  The proposed regulations narrow
the focus of audits to 14 of 52 existing criteria.  These 14 criteria
reflect service areas that at least 10 percent of the states have
failed in the past.  However, all of at least 17 additional criteria
(with numerous subcriteria) would be audited for compliance with the
1988 amendments.  Moreover, the substantial compliance standards for
maintenance of records and case closure would be raised from 75
percent to 90 percent of cases sampled. 

While the revised audit regulations have not been finalized, OCSE
officials have decided that further changes need to be made to the
audit process to focus more on outcomes and less on detailed process
requirements.  To do this, however, OCSE officials believe that the
statutory mandate for comprehensive audits must be changed.  Proposed
legislative language effecting this change was incorporated in the
administration's welfare reform proposal.  Pending further
legislative action, OCSE has suspended its scheduled compliance
audits for 1994.  Instead, audit staff are evaluating state data
collection and reporting systems as noted earlier in chapter 2. 


   PROPOSED WELFARE REFORMS WOULD
   PLACE GREATER DEMANDS ON OCSE
---------------------------------------------------------- Chapter 3:5

While the federal CSE role varied among the eight welfare reform
proposals we reviewed, all would give some new responsibilities to
OCSE,\48 but few would add resources for technical assistance or
change the audit process.  Under some of the proposals, OCSE would be
required to develop and coordinate new or expanded national automated
information systems.  Others would require OCSE to work with the
states in such areas as training development and establishing
staffing standards.  New responsibilities placed directly on the
states may also require greater technical assistance efforts and
communication by OCSE and within HHS to ensure effective state
implementation. 


--------------------
\48 The proposals generally assigned the responsibilites to the
Secretary of HHS, but presumably implementation responsibility would
be delegated to OCSE. 


      SOME WELFARE REFORMS PROPOSE
      LARGER COORDINATING ROLE AND
      MORE RESPONSIBILITIES FOR
      OCSE
-------------------------------------------------------- Chapter 3:5.1

A number of the proposals we reviewed would require OCSE to develop
and coordinate new or expanded automated information systems, develop
a comprehensive training program for federal and state program staff,
and conduct staffing studies of each state's program.  Four of the
proposals, for example, would direct OCSE to develop a national
database of all child support orders issued or enforced by state CSE
programs.  Six proposals would require reporting of newly hired
employees to state or federal agencies, and one of these would also
require OCSE to maintain a database of the newly hired employees
through a modified W-4 tax withholding reporting procedure. 

Also, additional responsibilities for OCSE for training and staffing
standards for state programs were included in some of the welfare
reform proposals.  Two proposals specifically called for OCSE to
provide training as well as technical assistance to states.  One of
these proposals would require OCSE to develop (1) a core curriculum
and training standards for state programs to follow and (2) national
training for state CSE program directors.  In addition, these two
proposals would direct OCSE to conduct staffing studies in each
state, and a third would set a deadline for HHS to set staffing
requirements as already required under section 452(a)(2) of the
Social Security Act. 


      NEW STATE RESPONSIBILITIES
      COULD REQUIRE MORE TECHNICAL
      ASSISTANCE AND EFFECTIVE
      COMMUNICATION FROM OCSE
-------------------------------------------------------- Chapter 3:5.2

Under many of the welfare reform proposals we reviewed, states would
also have new mandates and requirements that may require more
technical assistance and effective communication from OCSE for
implementation.  For example, seven proposals would impose new
requirements affecting states' paternity establishment programs.  One
called for OCSE to develop regulations for voluntary paternity
acknowledgment in nonhospital settings.  Another would give state CSE
programs authority to determine if an AFDC applicant is cooperating
in the paternity establishment effort.  However, OCSE is responsible
for developing the standards state programs must use if they believe
the custodial parent should be exempt from cooperation.  In addition,
there are proposed mandates for states to establish such measures as
employee reporting, professional license suspension if child support
is delinquent, less judicial case processing, central collections and
distribution, cost-of-living adjustments in new or modified child
support orders, and inclusion of delinquent child support payers in
their job search and training programs for welfare recipients.  While
some states are implementing some of these now, others may need
assistance from OCSE to enact and implement these requirements. 

In addition, under many of the proposals, states would be required to
enhance their current systems and establish new databases.  These
state efforts would require technical assistance and monitoring
activities by OCSE program staff and ACF management information
systems personnel to ensure efficient development and capacity for
linking state systems to a national system where necessary.  Seven of
the proposals we reviewed, for example, would require states to
establish central or automatically linked local registries that would
have a record of all child support orders being enforced by the CSE
program.  Some of these proposals would require all child support
orders issued in the state to be included. 


      SPECIFIC FUNDING SCHEME
      PROPOSED FOR TECHNICAL
      ASSISTANCE
-------------------------------------------------------- Chapter 3:5.3

One proposal included a provision for a specific funding scheme for
federal activities assisting state programs.  Under this proposal,
funds from the federal portion of recovered AFDC payments would be
used to fund a wide range of activities.  Among these activities
would be information dissemination, technical assistance, training of
state and federal staff, and operation of the federal databases
containing child support orders and employee information. 


      AUDITS TARGETED FOR CHANGE
      UNDER SOME WELFARE REFORM
      PROPOSALS
-------------------------------------------------------- Chapter 3:5.4

OCSE would be required under three of the welfare reform proposals to
change the audit process to different degrees.  One proposal
specified the process be streamlined to (1) be less burdensome on
states in substantial compliance, (2) produce more timely analysis of
states not in substantial compliance, and (3) possibly shift
resources to providing technical assistance.  Another proposal
required OCSE to create, after a year of study, a new process--with
new criteria, standards, and reporting--that emphasizes outcomes. 

Finally, a third proposal would make the most specific and immediate
changes.  This proposal would require (1) all states to have an
annual monitoring and reporting capability that meets OCSE standards
and (2) OCSE to change the focus of its audits to verifying state
data, data systems, and financial management.  Since this proposal
would also change the incentive structure to reward states for
achieving certain levels of performance in key areas, such as
paternity and order establishment, data verification performed by the
audits would be critical to the accuracy of performance assessment
and incentive adjustments.  This proposal incorporates the statutory
change desired by OCSE. 


STATE CSE PROGRAMS USE MULTIPLE
STRATEGIES TO ADDRESS COMMON
BARRIERS TO STATE CSE EFFORTS
============================================================ Chapter 4

Despite substantial federal funding, mandates, and oversight, CSE is
still very much a state program in which state and local leadership,
operating in unique political and fiscal environments, is primarily
responsible for program performance.  Our work in eight states\49 and
our past studies--and the research of others-- suggest that state
programs face common barriers hindering their CSE efforts and are at
different points in developing the specific management and
enforcement tools they need to overcome or reduce the barriers. 
State programs must deal with increased caseloads; limits in their
computer systems' capacity to serve those caseloads; limited control
over local program activities; a need to garner legislative support
for new state CSE initiatives; and poor communication between CSE and
AFDC staff that impedes CSE's ability to provide services to AFDC
clients. 

The states we visited had developed multiple strategies to deal with
these barriers.  Over the years, all had added some staff, increased
their use of administrative rather than judicial case processing, and
developed innovative enforcement tools such as requiring employers to
report newly hired employees to a central state registry and using
state tax data to locate noncustodial parents.  In addition, these
states all recognized automation as a critical tool for dealing with
a variety of barriers and were expanding their computer capacity. 
State programs used a variety of techniques, such as having a
legislative liaison office, to convince state legislatures to enact
laws needed to authorize new enforcement tools.  States also have
made changes to improve CSE-AFDC coordination, such as locating both
programs in the same state agency. 

Table 4.1 provides an overview of the various barriers identified in
our review and the strategies state CSE programs initiated to
overcome them.  As shown in the table, multiple strategies are often
used to address different barriers.  Appendix III presents selected
information about the state CSE programs we visited. 



                         Table 4.1
          
          Barriers States Face and Some Strategies
                      to Overcome Them

Barriers            Strategies
------------------  --------------------------------------
Increasing          More staff
workloads and
resource            Administrative rather than judicial
constraints         processes for establishment and
                    enforcement of paternity and support
                    orders

                    Innovative practices such as new-hire
                    reporting to reach difficult
                    populations

                    Increased use of automation

                    Contracts with private collection
                    firms

                    Volunteers

Limited computer    Enhancing existing and acquiring new
system capacity     computer software and technology

Dispersed program   Automation used to
control and lack
of procedural       --centralize program data and
uniformity          functions

                    --standardize case processing
                    procedures

                    --monitor compliance with processing
                    standards

Lack of             Legislative activism and consensus-
legislative         building through
support for
initiatives and     --assigned staff to promote program
resources           mission to legislature

                    --public awareness campaigns and
                    lobbying efforts emphasizing goals and
                    achievements

                    --communication with advocacy groups
                    and others

                    --improved program management and
                    services

Inadequate          Communication initiatives and program
communication       liaisons
between AFDC and
CSE programs        Mutual education and training programs
                    for staff

                    Staff co-location

                    Revisions to intake and referral
                    process
----------------------------------------------------------

--------------------
\49 Arizona, Iowa, Kentucky, Massachusetts, New York, Oregon, Texas,
and Virginia. 


   EXPERIENCES OF EIGHT STATES
   ILLUSTRATE COMMON BARRIERS
   IMPEDING STATE CSE EFFORTS
---------------------------------------------------------- Chapter 4:1

To varying degrees, the eight state CSE programs we reviewed have
experienced and continue to experience common barriers.  These
barriers include (1) increasingly complex and growing workloads
coupled with resource constraints, (2) limited computer system
capacity, (3) dispersed program control and lack of uniform
procedures, (4) lack of legislative support, and (5) inadequate
communication between the AFDC and CSE programs. 


      STATE AND LOCAL PROGRAMS
      MUST DEAL WITH MORE
      DEMANDING WORKLOADS AND
      RESOURCE CONSTRAINTS
-------------------------------------------------------- Chapter 4:1.1

State and local CSE programs must deal with more demanding workloads
despite constrained resources.  State programs are confronting (1) a
growing number of cases that more frequently need paternity
establishment, (2) increasing time-consuming interaction with
custodial parents, (3) limited ability to reach some noncustodial
parents, and (4) federal requirements for medical support enforcement
and case review and modification.  At the same time, state budgets
have been seriously cut back and some states are seeking ways to
"downsize" their governments. 

As a result of rising out-of-wedlock birth rates, paternity
establishment is becoming an increasingly large aspect of CSE.  In
Texas, for example, as of June 1993, more than 40 percent of Texas'
total caseload needed paternity established, according to state
figures (see figure 4.1).  As described in chapter 1, paternity
establishment is the first step in obtaining child support.  It can
be time-consuming and involve genetic testing and judicial hearings
as well as CSE efforts to interview custodial parents and locate the
alleged fathers. 

   Figure 4.1:  Texas CSE Caseload
   Profile, June 1993

   (See figure in printed
   edition.)

In addition, AFDC custodial parents' reluctance to cooperate with CSE
staff has been cited by program staff across the country as
contributing to the workload difficulty.  Staff in the eight states
we visited also cited contacts from increasing numbers of non-AFDC
custodial parents as part of their growing workload. 

Program officials in all eight states also expressed frustration with
the difficulty of pursuing noncustodial parents who are self-employed
or change jobs frequently.  CSE officials explained that the
inability to reach such parents with existing resources and
enforcement tools impeded collections and overall program
performance. 

The expanding CSE program mission also increased CSE case complexity. 
In addition to the traditional establishment and enforcement
services, program resources are being devoted to medical support
enforcement and review and modification of support orders.  The
additional case complexity and the resources required are reflected
in the longer time it takes to train new caseworkers and bring them
up to a full-performance level.  In Kentucky, officials said it takes
15 months to bring a new caseworker up to the full-performance level;
whereas, it used to take 9 months. 

At the time of our visits, states were beginning to wrestle with
review and modification requirements that became effective October
13, 1993.  Based on the results of state demonstrations of the review
and modification process, some state program officials anticipated
further resource shortfalls.  The demonstrations revealed that the
process is very labor intensive, with two states estimating the need
for 11 to 13 percent more staff to meet the requirements.  One
researcher noted that review and modification "can require
considerable persistence to obtain accurate income information from
parents, perform one or more guideline calculations, try to obtain an
order agreeable to both parties, and prepare the case for court if
necessary.  In addition, part of the workload burden derives from the
specifications of the Family Support Act, which imposes a complex
scheme of notices and timeframes."\50

Although staffing levels have increased over time for all the states
we reviewed, program personnel told us that the programs were still
understaffed relative to caseload size and the amount of work
required for a typical child support case.  Program officials'
estimates of worker caseload ranged from 300 to 2,500 cases per
worker.\51 In commenting on workload difficulties, a New York local
CSE official estimated that his office was 40 percent understaffed. 
In addition, a 1992 Arizona Auditor General report noted that
staffing levels were inadequate to address rapidly growing caseloads. 
Telephone inquiries alone can consume staff time.  State officials in
Iowa and Texas, for example, reported that centrally located
operators handle an average of 7,000 and 31,000 calls a month,
respectively.  These calls are in addition to the calls made to those
states' automated inquiry systems and do not include the number of
calls handled directly by field staff. 

Although CSE programs have received substantial federal funding and
state funding increases over the years, they have not always escaped
budget cuts.  The Iowa program, for example, experienced a reduced
legislative appropriation in 1991 along with all other state
agencies.  A number of CSE officials in the states we visited
expressed concern that state funding for the program remains
insufficient and resources are thinly spread. 


--------------------
\50 Robert G.  Williams, Ph.D., President, Policy Studies, Inc., in
testimony before the Subcommittee on Human Resources, Committee on
Ways and Means, U.S.  House of Representatives (Mar.  15, 1994). 

\51 See Interstate Child Support:  Wage Withholding Not Fulfilling
Expectations (GAO/HRD-92-65BR, Feb.  25, 1992).  In a survey of 136
local CSE offices, the median estimate was 1,000 cases per worker. 


      LIMITED COMPUTER SYSTEMS
      CAPACITY A BARRIER TO STATES
-------------------------------------------------------- Chapter 4:1.2

Despite nearly 15 years of 90-percent federal funding and a
requirement that CSE have statewide computer systems by October 1995,
some state CSE programs lack the systems capacity to serve growing
caseloads and address additional federal case processing
requirements.  In extreme cases, such as Virginia and Kentucky in
1993, states still do not have single statewide computer systems. 
Instead, they rely on multiple stand-alone systems or manual
processing to manage and track caseload actions.  In Kentucky, for
example, the largest portion of the state's caseload was being
tracked by both a largely manual system in the state area office and
a local computer system in a corresponding county attorney's office. 
Kentucky officials noted this arrangement caused duplication of
casework between state and county offices.  In both Virginia and
Kentucky, multiple systems and the absence of integrated databases
make case processing and tracking more difficult and require more
manual intervention. 

Oregon's CSE program was among the first to implement automated CSE
systems but now suffers from aging technology and strained capability
to carry out federally required CSE functions such as case initiation
and enforcement.\52

Oregon, although it implemented a system between 1975 and 1978, is
now in virtually the same situation as some other states developing
systems for the first time.  Over the years, Oregon made incremental
enhancements to its system to handle increased caseload complexity
and federal case processing requirements.  Unfortunately, these
incremental enhancements have strained the system's functional and
data storage capacities.  A 1991 OCSE review noted major deficiencies
and recommended Oregon replace its current system. 

Automated systems in Massachusetts and Iowa also continue to have
limitations.  Massachusetts, a leader in using automation to seize
noncustodial parents' bank assets, still has a limited system for
case management.  The current system provides little support for case
initiation, management, and automated tracking of efforts to locate
parents, paternity establishment, and court proceedings.  Caseload
intake and noncustodial parent location functions are primarily
handled manually by CSE personnel.  In contrast, Iowa's automated CSE
system has extensive case tracking and reporting capabilities, but
its ability to seize bank assets is hindered by its current
automation capacity.  As of June 1993, Iowa lacked the technology to
identify assets and levy administrative liens automatically.  One
program official said that the ability to do a tape-to-tape match of
CSE records with self-employment tax and asset records would be an
"invaluable" enforcement tool. 


--------------------
\52 Other functional requirements under federal law include case
management, financial management, security, and reporting. 


      PROGRAM CONTROL IS DISPERSED
      AND UNIFORMITY IS LACKING
-------------------------------------------------------- Chapter 4:1.3

Personnel in most of the state programs we visited were frustrated
with the dispersed and variable nature of their program structure,
but not all to the same degree.  Program personnel in New York,
Kentucky, and Oregon complained that multiple and autonomous
particpants (for example, judges, county attorneys, local
governments) with competing priorities prohibited centralized control
and posed a barrier to state CSE program performance.  These programs
lacked uniform statewide procedures and as a result had difficulty
implementing statewide CSE initiatives.  Our previous work and the
research of others have identified dispersed program control as a
barrier to improving CSE.\53

According to one study, involvement by the courts, prosecutors,
advocacy groups, local human services agencies, and the CSE agency
itself creates a complex interplay of competing traditions and values
likely to have a limiting effect on the local implementation of any
reform effort.\54

In a state where county governments exercise significant control of
program operations, the New York CSE program has experienced
difficulties providing program direction and implementing statewide
practices.  Clients obtain CSE services through 58 Department of
Social Services district offices.  In the districts, local
commissioners control program operations and have considerable
autonomy in determining local management philosophies, organizational
structure, and case processing procedures and priorities that often
conflict with the state CSE program's initiatives.  State reviews of
district offices from 1982 to 1992 also documented that local
districts have failed to implement state procedures and staffing
recommendations and fully utilize the automated information system,
among other issues. 

Kentucky has experienced similar difficulties managing the program as
a result of fragmented authority and court and county attorney
involvement.  In certain places, judges use their own individualized
procedures rather than following uniform state procedures.  As a
result, the state procedures manual is replete with different
procedures required in different counties.  Some judges, for example,
will not honor support orders from other counties within the state
when the custodial parent lives in their jurisdiction; they establish
new orders and will not collect arrears under orders from other
counties within the state. 

Even states with greater centralized program control, such as
Massachusetts, Virginia, Iowa, and Texas, have had some difficulty
implementing uniform procedures despite having direct control over
caseworkers and legal staff in local offices.  While lines of
authority are more clearly defined and initiatives are more easily
coordinated from the program's headquarters, control and uniformity
issues do arise primarily in relation to the courts. 


--------------------
\53 GAO/HRD-87-37, Apr.  30, 1987. 

\54 Charles F.  Adams, Jr., David Landsbergen, and Larry Cobler,
"Welfare Reform and Paternity Establishment:  A Social Experiment,"
Journal of Policy Analysis and Management, Vol.  11, No.  4, (1992),
p.  667. 


      LACK OF LEGISLATIVE SUPPORT
      AFFECTS STATE PROGRAMS'
      ABILITY TO IMPLEMENT
      INITIATIVES
-------------------------------------------------------- Chapter 4:1.4

Despite successful efforts in some states, many CSE programs have
experienced legislative opposition to proposed initiatives over the
last decade.  Some state programs we visited tried but were unable to
obtain legislative support to implement new processes and tools.  In
at least two cases, however, legislative support was withheld because
of historically poor program management. 

Examples from the eight state programs we visited illustrate the
importance of legislative support to adopting practices considered
innovative by program officials.  In 1993, the Massachusetts
legislature failed to support the CSE program's proposal for certain
administrative enforcement techniques opposed by the courts and
interest groups.  The proposal called for implementing in-hospital
paternity establishment, administrative order establishment, and
administrative review and modification of orders.  While in-hospital
paternity establishment passed, other elements did not.  The CSE
director explained that the legislature was not convinced that
administrative processes would be more efficient than judicial
processes.  In addition, the legislature was concerned that due
process rights would not be protected if the courts were not involved
in all child support matters. 

CSE officials in other states we visited told us legislatures had
been reluctant to approve additional enforcement tools.  In New York,
past proposals for new-hire reporting and driver and professional
license revocation authority failed because of the legislature's
concern that the measures would hurt business.  Iowa's CSE program
has also been unable to obtain legislative support for a central lien
index that would allow the program to quickly identify property held
by noncustodial parents and place liens on it.  Real estate
professionals strongly opposed the measure. 


      INADEQUATE COMMUNICATION
      BETWEEN AFDC AND CSE RESULTS
      IN BACKLOGS AND DELAYS
-------------------------------------------------------- Chapter 4:1.5

Inadequate communication has resulted in incomplete AFDC referrals to
CSE programs and contributed to caseload backlogs and processing
delays.  Communication between AFDC and CSE is important because CSE
relies on AFDC staff to conduct initial intake interviews and obtain
noncustodial parent information.  Over the years, ineffective
communication between the two programs has been cited by OCSE and
other studies as a barrier to performance.  In addition, in our 1987
report we found that poor coordination between welfare and CSE
agencies resulted in inadequate information about noncustodial
parents, including identity, location, and earnings data.\55 The
experiences of the state programs we reviewed suggest that very
little has changed. 

CSE personnel in the states we visited cited problems with the
interaction between AFDC and CSE.  Referrals from the AFDC program
frequently lacked information CSE staff needed to do their work,
either because the AFDC staff did not collect the information or the
parent did not provide it.  AFDC personnel appeared to be reluctant
to penalize AFDC recipients who did not cooperate in providing needed
information.  As a result of incomplete referrals, CSE workers spent
time and resources tracking down additional information,
reinterviewing clients, and providing services to clients unwilling
to identify the absent parent. 


--------------------
\55 GAO/HRD-87-37, Apr.  30, 1987. 


   SOME STATES HAVE DEVELOPED
   SUCCESSFUL STRATEGIES TO
   ADDRESS PROGRAM BARRIERS
---------------------------------------------------------- Chapter 4:2

The eight state CSE programs we visited have implemented or are in
the process of implementing many strategies to reduce or eliminate
program barriers.  The design, implementation, and success of some of
the common strategies reflect the political and fiscal environment
and CSE program history in each of the states. 

Multiple strategies are directed at growing workload size and
complexity.  These strategies include hiring more staff and
increasing the use of (1) administrative rather than judicial
processes, (2) innovative enforcement techniques, (3) automation, and
(4) contracts with the private sector.  In addition, one state is
making extensive use of volunteers to extend staff resources.  Some
of these strategies, such as increased automation and private
contracting, are also helping to improve program control and
uniformity within state programs.  Because automation is recognized
as a critical tool for dealing with a variety of problems, all the
states we visited are enhancing their automated capabilities.  In
addition, some state programs are actively working with their state
legislatures and others, such as judges and county officials, to
build consensus for initiatives and legislative support.  Some state
programs have also found ways to improve communication with the AFDC
program. 

Although opportunities exist for all states to implement these
approaches, we found that some state programs demonstrated more
initiative than others in such areas as legislative activism. 
However, we also saw instances where legislative activism was not
completely successful.  In addition, most of the barriers have not
been completely eliminated and will continue to require extensive
state effort. 


      MULTIPLE STRATEGIES HELP
      STATES ADDRESS WORKLOADS AND
      SUPPLEMENT LIMITED RESOURCES
-------------------------------------------------------- Chapter 4:2.1

No single strategy is used to meet the demands of a growing workload. 
Despite limited resources, all CSE programs we reviewed have added
some staff over the years.  They have also increased their reliance
on administrative processes, innovative enforcement tools, and
automation to address growing and more complex caseloads.  In
addition, some of the programs have engaged the private sector to
extend staff resources through contracts with collection agencies and
volunteer recruitment. 


         SOME STATE PROGRAMS HAVE
         HIRED MORE STAFF
------------------------------------------------------ Chapter 4:2.1.1

Most state programs we visited have been moderately successful in
adding staff over the years, although some have experienced staff
cuts and hiring freezes as well.  In Texas, for example, as its CSE
caseload tripled between 1984 and 1992, program personnel more than
tripled.  Massachusetts' CSE program recently raised its staffing
level approximately 25 percent.  The Kentucky program also
experienced two large increases of 30 percent and more in 1979 and
1989, but more recently, staffing was cut in 1992 and 1993 by 6 and 7
percent, respectively. 


         ADMINISTRATIVE PROCESSES
         ALLOW GREATER EFFICIENCY
------------------------------------------------------ Chapter 4:2.1.2

In most of the states we visited that have implemented administrative
alternatives to court processing for such actions as paternity
establishment, order establishment, and review and modification, CSE
personnel believe the administrative process has added or will add to
their programs' efficiency.  However, the type and extent of
administrative processes used in these states vary. 

State program personnel in some of the states we visited believed
that administrative processes have reduced court involvement, created
greater procedural uniformity, and allowed CSE programs to serve
increasing workloads more efficiently.  Iowa, for example, has had
extensive administrative procedures for years and continues to add to
them.  The Iowa CSE program expanded its administrative means for
paternity establishment because program officials believed it would
make the process faster and cheaper by reducing the amount of
attorney and court time.  In addition, Iowa is implementing an
administrative process for the review and modification of support
awards to more efficiently meet federal time frames for review and
modification of support orders. 

In contrast, the Texas program has traditionally relied on the
judicial process for order establishment and enforcement.  In the
past few years, however, as court backlogs have grown, it has added
administrative alternatives.  Texas is now implementing an
administrative process for order establishment that relies on a
mediation conference with the parents instead of a court hearing to
set the award amount.  In promoting this approach to the Texas state
legislature, program personnel estimated that more than 50 percent of
the caseload could be resolved using the administrative process. 


         INNOVATIVE ENFORCEMENT
         TOOLS AND APPROACHES
         EXTEND PROGRAM'S REACH
------------------------------------------------------ Chapter 4:2.1.3

The eight states we visited are using innovative enforcement tools to
extend their CSE programs' reach in locating noncustodial parents or
their assets or to create greater incentives to pay support.  These
tools include requiring employer reporting of newly hired employees,
using state tax data to locate noncustodial parents, and requiring
noncustodial parents who do not pay child support to perform
community service or revoking their professionl, trade, or driver's
licenses. 

Like several other states around the country, Massachusetts, Iowa,
Oregon, and Virginia have implemented mandatory employer reporting of
newly hired employees for a number of industries and professions. 
The Texas legislature also recently approved new-hire reporting. 
Texas employers, however, are not required to participate but are
encouraged to volunteer. 

To reach self-employed noncustodial parents and nonwage income,
Iowa's legislature authorized its CSE program and Department of
Revenue and Finance in 1993 to implement a tax record matching
procedure to identify self-employed individuals with child support
obligations.  Self-employed noncustodial parents with delinquent
child support obligations are sent a notice on Department of Revenue
and Finance letterhead requiring the payment of child support and the
quarterly submission of a state estimated tax form.  For individuals
who do not comply, CSE tries to identify interest- bearing assets
from the tax return and attempt garnishment. 

Iowa's CSE program has also obtained legislative authority to order
noncustodial parents who claim they are unemployed to seek
employment.  Failure to seek employment can serve as evidence to the
court in determining a willful failure to pay.  Iowa has also given
the courts the power to impose community service as an alternative
sentence for contempt of court or failure to pay child support. 

Other practices that program officials believe will enhance
collections include revocation or suspension of professional
licenses.  Arizona and Oregon are among at least 18 states that have
obtained authority to revoke or block renewal of professional
licenses. 


         AUTOMATION INCREASES
         EFFICIENCY
------------------------------------------------------ Chapter 4:2.1.4

CSE officials in the states we visited commonly noted that a greater
reliance on automated enforcement and parent-locating tools has
allowed their programs to do more work with fewer staff and
resources.  In general, all eight states have expanded their use of
automation for case processing and asset attachment and are making a
considerable number of collections through automated wage withholding
and interception of other income such as unemployment benefits and
tax refunds.  In New York, for example, automated enforcement
techniques produce an estimated 75 percent of total collections. 

Since 1992, Massachusetts has begun to automate a number of
innovative enforcement tools.  Accordingly, the CSE program
implemented a "Mass Enforcement" initiative that focuses on cases
with the greatest potential for collections and uses computerized
file matches to identify employment and asset information. 

Increased automation has helped to free up line staff from
administrative duties and allow them to do more casework.  For
example, staff from some states said that innovations such as
computerized voice-activated response systems using "800" numbers
have allowed them to spend more time working cases and less time
responding to simple telephone inquiries about payments.  Iowa
program officials said they were able to reduce their central payment
inquiry staff from 14 to 8 as the result of a voice-activated
response system that informs callers when a payment has been received
by the state. 


         CONTRACTING WITH THE
         PRIVATE SECTOR EXTENDS
         LIMITED STAFF RESOURCES
------------------------------------------------------ Chapter 4:2.1.5

Contracting with private sector companies extends limited state
program staff in a variety of ways, although not all the states we
reviewed are using contractors.  New York, for example, is
contracting with a vendor for centralized collections and payment
processing.  Previously, payments were made and processed at 58
district offices throughout the state.  The state estimates that a
privately operated centralized collections process will save the
program between $5 million and $6 million a year. 

Increased workloads and resource considerations have also caused
Massachusetts, Texas, and Virginia to contract for collection
services.  Massachusetts contracts with two private companies to make
collections on a small number of difficult cases.  Texas started
using a private contractor in 1993 to supplement staff resources. 
The contractor is expected to pursue collections on cases that are at
least 6 months delinquent and have arrears of $150 or more.  Virginia
also relies on a contractor to make collections, but only in AFDC
cases in arrears, which represent about 5 percent of the program's
total caseload.  Virginia recently created two additional district
offices, expanding from 19 to 21, by using a private firm to run all
operations of the new offices.  This contract has allowed the
Virginia program to expand services geographically while staying
within its state-mandated staffing levels. 


         VOLUNTEERS AND WELFARE
         TRAINEES ENHANCE STAFF
         RESOURCES
------------------------------------------------------ Chapter 4:2.1.6

One state--Texas--supplements staff resources with volunteers,
including student interns and trainees referred by the AFDC program. 
These unpaid staff answer telephones, file, and perform other office
duties.  In Texas' fiscal year 1993, volunteer staff put in 130,000
hours in field operations and on special projects.  The volunteers'
field office hours represented approximately one full-time equivalent
in each of the 58 field offices.  The volunteer program director
estimated that in addition to the office hours, field office
volunteers made 225 community presentations about CSE, including the
responsibilities of parenthood and paternity, that reached
approximately 175,000 people.  HHS' Regional Office VI is very
supportive of the volunteer program and has approved federal matching
funds for computer equipment used by volunteers. 


      STATES ARE IMPROVING
      AUTOMATION CAPACITY
-------------------------------------------------------- Chapter 4:2.2

All state CSE programs are planning and developing statewide systems
to meet federal certification requirements by October 1995.  For some
states, like Oregon and Texas, this has meant abandoning old,
patched-together systems in favor of entirely new systems.  As a
result of a 1991 OCSE review that noted deficiencies in Oregon's
current system, state officials decided to identify, transfer, adapt,
and implement an automated system that was already implemented in
another state. 

In addition, some states, like Arizona, are implementing statewide
computer systems for the first time.  In December 1992, Arizona
implemented a new computer system that has increased capacity. 
According to Arizona officials, more than 300,000 cases are now in a
centralized database.  The new system has allowed the program to
implement automated tax intercepts, credit bureau reporting, and
lottery intercepts.  The system also has an improved location
capacity because of additional connections with other computer data
systems.  Arizona CSE personnel said the computer system helped them
monitor the stages of each case better and had improved automated
interfaces. 


      AUTOMATION AIDS CENTRALIZING
      PROGRAM CONTROL AND
      UNIFORMITY
-------------------------------------------------------- Chapter 4:2.3

Automation has helped some states centralize program control, ensure
uniformity in procedures, and centralize a number of CSE functions. 
In general, the strategy has been to automate more processes and
transfer control from local offices to the central CSE administration
in the state. 

At the time of our review, New York was beginning to use automation
and a private contractor to transfer collection processing from the
58 district offices to the state office.  With centralized
collections, payments from noncustodial parents are received at one
central location, posted by the system, and distributed automatically
to the custodial parents.  Before this initiative, the collection
process was primarily manual and controlled by local Department of
Social Services offices throughout the state.  New York has also used
automation to centralize many other functions, including lottery
intercepts, tax intercepts, administrative penalties for nonpayment,
and document generation. 

Iowa provides another example of standardization through automation. 
The Iowa CSE director said automation has given the program a single
process for handling cases and that staff no longer have a choice of
how to proceed with actions such as order establishment.  In
addition, the program's case tracking system allows the CSE program
to centrally monitor and document case actions in terms of federal
case processing time frames.  Reports showing case actions that are
not in compliance with the time frames are shared with staff at all
levels. 


      LEGISLATIVE ACTIVISM USED TO
      GARNER SUPPORT FOR PROGRAMS
-------------------------------------------------------- Chapter 4:2.4

The CSE programs we visited have used a variety of techniques to
increase legislative support.  These techniques include legislative
liaisons, public awareness campaigns, lobbying efforts, consensus
building among stakeholders, and other initiatives to improve
internal management and case processes.  In many instances, such
efforts have resulted in additional program resources, authority to
implement innovative practices, and greater program control.  These
efforts, however, have not always been successful.  Some state
programs continue to have difficulties obtaining necessary
legislative support. 

In Texas during the 1993 legislative session, senior program
officials, in addition to the program's legislative liaison, lobbied
the state legislature and made compromises in wording and procedures
to institute an administrative process.  This lobbying effort
included an orientation session for all legislators and staff at the
start of the session.  During the orientation, CSE staff explained
the CSE program and what kind of assistance the program can give
legislators responding to constituent inquiries.  CSE convinced the
legislature that the judicial process took longer than necessary and
kept the program from achieving its potential. 

The Texas CSE program also uses other measures to reach legislators,
judges, and county officials to build program credibility and a
consensus for action.  The program is required by law to report back
to the legislature on program outputs and outcomes.  This requirement
has helped keep the legislature informed about the effectiveness of
CSE initiatives.  In addition, units of the CSE litigation division
work with judges on standardizing court procedures and processes to
improve CSE and establishing case law with carefully selected cases. 
The CSE director and staff also work with county law enforcement and
judicial officials to identify program improvements. 

The Massachusetts CSE program has taken several actions to obtain
legislative support for its initiatives, and program officials
believe this support has allowed the program to become one of the
most aggressive in the country.  The program has a legislative
liaison who meets regularly with each member of the legislature and a
cadre of key supporters to discuss upcoming legislation.  In
addition, the liaison generates statistical packages highlighting
program impacts for the legislature.  To improve program credibility,
the Massachusetts CSE program also sponsors public service
announcements and holds press conferences to publicize collections
figures.  The program also publishes a "10 Most Wanted List" of
nonpaying noncustodial parents and other pamphlets. 

As a result of its efforts to gain the legislature's support, the
Massachusetts CSE program has had more successes than failures. 
Successful legislative initiatives have included (1) a statute that
requires all employers to report new hires within 14 days of starting
employment; (2) an administrative lien provision that creates a child
support lien when a child support order is due and unpaid; (3)
voluntary paternity acknowledgment; (4) authority to enforce
court-ordered health insurance provisions by directly contacting the
employer or insurance providers; and (5) access to employment,
utility, and licensing records to locate noncustodial parents. 
However, the CSE program has been unable to get its entire package of
legislative initiatives, which include administrative processes for
new and modified orders, passed in the legislature. 


      ACTIONS TAKEN TO IMPROVE
      COMMUNICATION BETWEEN CSE
      AND AFDC
-------------------------------------------------------- Chapter 4:2.5

Although problems remain, the state CSE programs we visited have
implemented initiatives to improve communication with AFDC.  Some
approaches are aimed at improving the referral process, while others
have focused on improving cooperation through procedural revisions,
education programs for welfare and child support personnel, and other
more innovative techniques. 

Oregon appears to have been more successful than the other states in
confronting and reducing this particular barrier to performance. 
Oregon CSE officials voiced a positive view about the program's
relationship with the AFDC program and staff and attributed this view
to several factors.  The CSE director believed that good
communication was due, in part, to both CSE and AFDC having the same
oversight agency and a single computer system.  In addition, past
problems with referral data had been corrected through education and
refinement of AFDC intake documentation.  The CSE program developed a
training program for AFDC staff on how to enter information necessary
and useful to CSE efforts directly onto the computer system.  The CSE
and AFDC programs also refined the AFDC intake document to obtain
child support information.  These efforts reduced the amount of
information AFDC staff were required to get from clients for CSE
purposes and improved cooperation between the programs. 

Some of the other states we visited are looking at ways to improve
the quality of data from the AFDC intake process and to better
communication at senior management levels in each program.  For
example, Arizona recently conducted a study of the intake interview
and referral process and was planning to establish a pilot office in
which CSE personnel would be co-located with AFDC staff.  CSE
personnel will conduct intake interviews to ensure that the necessary
information is obtained and will educate their AFDC counterparts
about appropriate information gathering approaches. 

The Texas CSE program is examining the intake process in coordination
with AFDC staff and is focusing on mutual education, training
programs, and discussions with AFDC management.  AFDC and CSE
management staff meet quarterly to discuss common issues and to
ensure cooperation.  Program officials believe cooperation has
improved as a result of these regular meetings.  In addition,
liaisons have been established for both agencies to assist personnel
throughout the state with case processing problems. 


   WELFARE REFORM COULD INCREASE
   STATES' WORKLOAD BUT COULD HELP
   SOME MAKE CHANGES
---------------------------------------------------------- Chapter 4:3

All eight welfare reform proposals we reviewed contained new mandates
for state CSE programs.  In some instances, these mandates would add
to the workload states are already struggling to address as well as
add more automation requirements.  However, the mandates would give
some state programs the enforcement tools, such as new-hire reporting
and driver's license suspension, that they have been unable to obtain
from state legislatures.  In addition, these mandates would help some
state programs achieve greater centralization and control of their
operations. 


      WELFARE REFORM COULD
      INTENSIFY SOME BARRIERS
      STATES ARE FACING
-------------------------------------------------------- Chapter 4:3.1

All the welfare reform proposals we reviewed would expand state
program responsibilities to different degrees and potentially
intensify some of the barriers states are now facing.  For example,
under at least one proposal, the CSE caseload would be expanded to
include all child support orders, even those not now enforced under
the Social Security Act.  While a portion of these new cases may
never need enforcement services, they would still be subject to the
requirement that all cases be automatically reviewed and considered
for modification every 3 years.  In addition, three of the proposals
require state programs to make greater paternity establishment
efforts through outreach and voluntary paternity acknowledgment.  Two
proposals would require state parent locator services to be used to
handle requests from noncustodial parents to locate custodial parents
for enforcement of visitation issues. 

Welfare reform proposals may further strain state automated
information systems.  As indicated in chapter 3, most of the
proposals would require state programs to have automated central
child support order registries or the capability to integrate local
registries.  In addition, one of the proposals would require state
programs to match employer reports of new employees with the state
order registry.  Another would require state programs to have
automated on-line access to information in any database maintained by
the state. 


      WELFARE REFORM PROPOSALS
      PROVIDE NEW ENFORCEMENT
      TOOLS FOR SOME STATE
      PROGRAMS AND REQUIRE GREATER
      CENTRALIZATION
-------------------------------------------------------- Chapter 4:3.2

The welfare reform proposals we reviewed would provide new
enforcement tools to some states and require greater centralization
of operations for some as well.  For example, seven proposals would
require employers to report new hires either to a state or federal
unit that then makes the information available to all states.  In
addition, two proposals require states to set up central collection
and disbursement agencies to handle all child support payments
throughout the state.  Furthermore, one proposal offers additional
federal funding as an incentive to centralize all of CSE under one
state-controlled organization.  Also, two proposals provide for
driver's license suspensions. 


CONCLUSIONS AND RECOMMENDATIONS
============================================================ Chapter 5

The history of the CSE program is one of progressively expanded
responsibilities.  Despite annual federal and state funding of nearly
$2 billion, the CSE program is struggling to keep up with the needs
of an ever-expanding constituency of welfare, working poor, and
middle income families.  Given nationwide trends toward increasing
numbers of out-of-wedlock births, federal and state governments are
likely to continue to face many challenges in managing their
programs.  In addition, welfare reform proposals we reviewed suggest
that OCSE and the states may be tasked with greater responsibilities
in the near future. 

To date, OCSE has been less than effective in the leadership role the
Congress envisioned when it established the national CSE program.  As
program mission and caseload have expanded over time, OCSE has
continued to lack some important management tools, including a
clearly articulated program mission, programwide planning and
goal-setting, and a means to measure progress toward goals.  At
present, OCSE does not have accurate and consistent data on state
program performance.  OCSE needs such data if it is to assess program
performance and take action to improve it.  OCSE will also need these
data if it is to successfully implement the management reforms
required under GPRA.  OCSE's ability to lead effectively would also
be helped by a funding structure that is better aligned with the
current realities of CSE's mission and that could help promote
service improvement at the state and local levels.  In addition,
OCSE's working relationships with state programs in recent years have
been characterized as more adversarial than cooperative. 
Miscommunications between OCSE, HHS regional staff, and state program
staff over CSE policy interpretation and other matters have fueled
states' dissatisfaction.  HHS' current organizational structure,
which divides CSE responsibilities between OCSE staff and HHS
regional staff not accountable to OCSE management, bears some
responsibility for these ongoing difficulties in the federal-state
partnership that is at the core of the CSE program. 

OCSE's audits of state programs are perhaps its most important
management tool, and some state program staff said that OCSE audits
had spurred state action.  But the audits have focused on monitoring
state compliance with federally prescribed administrative procedures. 
As a result, the audits give OCSE and state program directors limited
insight into the ultimate outcomes of program activities, such as
whether paternities were established, noncustodial parents located,
and collections achieved.  OCSE is aware of the audits' limitations
and has taken some actions to change the audits.  Our work confirms
and reinforces a need to reengineer OCSE audits.  Such a
reengineering could not only help federal-state program relations but
also serve as a means for OCSE and state program staff to obtain
accurate and consistent performance data--key management data that
could help OCSE and states as they seek to better serve the families
that depend on CSE efforts. 

In this chapter, we make some specific recommendations.  We believe
implementing GPRA's management reforms may help OCSE improve its own
program management as well as serve states better.  But whether
through GPRA implementation or through other means, some rethinking
of federal management tools, processes, and relations with state CSE
programs is needed if the issues we have identified are to be
addressed.  We recognize that the CSE program faces many difficult
tasks and that even given optimum CSE program management, some
noncustodial parents may never be located and others may never be
able to pay support.  But continued and strengthened efforts by OCSE
and states would seem virtually certain to help some families.  Such
efforts are all the more important if OCSE is to be given new
authorities and responsibilities under welfare reform. 


   GPRA CAN HELP OCSE DEVELOP
   NEEDED MANAGEMENT TOOLS
---------------------------------------------------------- Chapter 5:1

As a result of the GPRA mandate and OCSE's pilot project status, OCSE
is beginning to build a planning and measurement discipline that
focuses on outcomes.  Such a process should enable OCSE to better (1)
communicate program expectations, (2) identify the tasks needed to
accomplish the outcomes, (3) identify the data needed to assess
accomplishments, and (4) use the information from performance
assessment for policy decisions and plan revisions.  OCSE's actions
to date show promise, but we believe some of the issues we have
identified remain to be addressed. 

As of September 1994, OCSE had developed a draft strategic plan that
exceeds what GPRA requires and had avoided repeating some past
planning weaknesses.  To develop the plan, OCSE has sought comments
and involvement from key stakeholders such as the regional HHS CSE
personnel and state program representatives.  In addition, OCSE had
defined a program mission, vision, and two general goals with
objectives and many quantitative performance indicators for each
goal.  The draft mission statement affirms the broad scope and
expanded mission the program has assumed over the years.  The goals
focus on paternity and order establishment in support of this broad
mission, and the objectives and performance indicators specifically
address outcomes not only for collections but for noncollection
activities such as medical support enforcement as well. 

Articulating the broadness of the mission and establishing outcomes
should help to clarify the program's mission among the stakeholders. 
In addition, through a welfare reform proposal, OCSE is attempting to
align the existing funding structure and audit approach with the
broad mission OCSE has defined.  Such an alignment is important for
stakeholders to clearly understand program priorities.  In addition
to the strategic plan, OCSE has also developed an annual performance
plan as required by GPRA.  According to GPRA, the annual plan is
intended to provide a direct link between the program's longer-term
goals and what state programs and OCSE's managers and staff will need
to accomplish each year. 

Setting demanding but realistic long-term and annual measurable
outcomes for the national program and for state programs will be
challenging.  The variation among states in adopting innovative
practices, such as voluntary paternity acknowledgment and early
employer reporting of newly hired employees, suggests a need for OCSE
to work with each state program individually to set goals that
require continuous improvement from year to year.  One way to do this
would be for OCSE and states to set goals that reflect and build on
past state performance, similar to the approach used for the
paternity establishment standards.  We believe that an
individualized, cooperative, goal-setting effort would encourage
greater state responsibility and accountability for achieving the
goals and the data used to measure performance.  A cooperative
process would seem more likely to promote such accountability than
having OCSE or the Congress imposing annual goals on state programs. 

OCSE's planning efforts, however, will need to address some of the
issues we have raised in this report, including data quality and
OCSE's own outcome goals.  Improving data quality is essential if
OCSE and the states are to achieve effective annual performance
reporting and OCSE has taken some preliminary steps toward this end. 
However, OCSE needs to define data definitions and set standards to
promote consistent data reporting.  Building on initial efforts to
clarify definitions and obtain consistent state reporting, OCSE
officials said OCSE audit staff are currently investigating (1) data
definitions used by states, (2) state data collection systems, and
(3) state data quality.  However, these officials did not have a plan
or timetable for the completion of this effort.  Furthermore, once
measurable outcome goals have been established for the program, OCSE
and the state programs will need to identify the key data needed for
annual performance reporting and develop the necessary definitions. 
Data quality, however, relies heavily on state program efforts. 
States will thus need to assume greater accountability for the
quality of data they submit. 

Another important issue for OCSE to consider is its own performance
as both a partner with and manager of state program efforts.  While
OCSE has expressed an intention to assess its processes for serving
the states, it has yet to set goals for itself regarding the future
timeliness of regulations, responsiveness to states about audits and
policy questions, and regional HHS office commitment and feedback. 
Given the failure of OCSE's past planning efforts to focus on
outcomes, measurement, and continuous improvement, we believe OCSE
will need to address these issues in future planning. 


   FUNDING STRUCTURE SHOULD BE
   REDESIGNED
---------------------------------------------------------- Chapter 5:2

Our work identified several problems with the current program funding
structure that, taken together, suggest that the funding structure
should be redesigned.  The current incentive payment structure has
not been aligned with the expanding CSE mission.  Furthermore, it
does not meaningfully encourage continuous improvement, nor does it
provide for the cost sharing between state and federal governments
originally envisioned for the program.  Instead, the incentive
payments make it possible for states to shift most, if not all,
program costs to the federal government. 

If incentive payments are to promote better state performance, we
believe they need to be aligned with performance expectations as
defined in the mission priorities and goals established in the
strategic plan.  For example, if such a plan recognizes a broader CSE
mission and includes measurable outcome goals for collection and
noncollection results, such as paternity and order establishment and
medical support enforcement, then the incentive payment structure
should be used to reward state improvements and maintenance of the
highest level of performance in these areas.  We endorse the concept
of performance-based funding embodied in the incentive payments and
believe this concept should be retained in the redesigned structure. 


   THE FEDERAL-STATE PARTNERSHIP
   NEEDS TO BE REINVENTED
---------------------------------------------------------- Chapter 5:3

OCSE should continue to work with states to find new ways to
strengthen the federal-state partnership that is at the core of the
CSE program.  New ways to deliver technical assistance and training,
as well as new ways to develop regulations, would be important steps
to this end.  In addition, long-standing communication problems
between state officials, HHS regional staff, and OCSE staff, problems
due in part to the current organizational structure, will need to be
addressed. 

We encourage OCSE to explore more cooperative approaches to
developing regulations and delivering technical assistance and
training.  In chapter 3, we described some initiatives states would
like to see or are trying for developing regulations and delivering
technical assistance.  These may be potential models for OCSE to
consider or develop further in working with the states. 

As part of reinvigorating the state-federal partnership, we believe
HHS and OCSE officials should consider alternatives to the current
federal organizational structure for the CSE program, since this
structure has produced ineffective communication and accountability. 
To this end, OCSE's strategic planning can help clarify OCSE's role
by establishing performance goals for the agency.  As with the CSE
program, these goals should be focused, as much as possible, on
results such as more timely issuance of regulations and
responsiveness to states.  The needed organizational changes,
therefore, should support not only CSE program mission priorities,
but OCSE's agency performance goals as well.  In developing a better
functioning organization, we believe HHS should consider (1) what the
role of regional HHS personnel is, (2) how regional resources should
be spent on CSE, (3) what mechanisms are necessary to ensure
accountability to OCSE by regional and ACF staff outside of OCSE who
are working on CSE priorities, and (4) where federal resources should
be devoted to foster state goal achievement. 


   THE AUDIT IS A CANDIDATE FOR
   REENGINEERING
---------------------------------------------------------- Chapter 5:4

Whatever changes may be made to the CSE program, we believe it is
essential that the federal government maintain a program monitoring
function to ensure that children who need financial support are being
effectively served.  However, in view of the problems we and others
have identified with the program's audits, we believe, and OCSE
agrees, that the scope and approach of this monitoring function need
to be reconsidered.  While the audits have spurred state action in
some cases, we believe it is time for the program audit role to be
reexamined and reengineered to provide a monitoring capability that
is not only more outcome-oriented, but supports accurate state
performance reporting as well. 

Two existing conditions make this an opportune time to change the
audit approach.  First, GPRA implementation demands accurate,
consistent data and assessment of progress toward stated
goals--elements the current program lacks.  GPRA annual performance
reporting, therefore, should provide insights about program outcomes
that the current audit approach has been unable to provide.  To
ensure these insights are based on sound data, however, the data, not
the administrative procedures, should be subject to audit.  The OCSE
audit role, when placed within the GPRA framework, can be shifted
from ensuring compliance to ensuring data integrity and investigating
performance problems identified in annual performance reporting, thus
achieving a more outcome-oriented approach. 

A second condition that enables serious reconsideration of the
existing audit approach is the growth of state-initiated
self-monitoring.  As we noted in chapter 3, a number of states are
conducting their own program audits or evaluations using
OCSE-promulgated program standards or their own evaluation criteria. 
These state program monitoring efforts can have a more timely effect
on state operations than OCSE audits and reduce the need for OCSE to
conduct the type of detailed audits of state administrative
procedures it has in the past.  OCSE is currently considering ways to
use state monitoring efforts, including replacing the existing
federal audit approach with required annual state monitoring and OCSE
review of the results. 

OCSE agrees that the audit needs to be reengineered but believes its
ability to make significant changes to the audit process is
constrained under current law.  Existing legislation requires OCSE to
conduct periodic comprehensive audits of state programs to ensure
substantial compliance with all federal requirements. 


   WELFARE REFORM PRESENTS
   OPPORTUNITIES AND ADDITIONAL
   CHALLENGES FOR CSE
---------------------------------------------------------- Chapter 5:5

Welfare reform proposals could have various effects on the CSE
program.  Adding federal mandates, as reflected in the welfare reform
proposals we reviewed, may result in a more standard national CSE
program.  In addition, welfare reform holds some promise for a
redesigned funding structure and audit approach.  However, under
welfare reform, OCSE would likely need to assume more
responsibilities despite its limited capacity and organizational
accountability.  Any reform is likely to require greater federal
leadership than has been exhibited in the past to achieve reform
goals. 

While increasing requirements would challenge OCSE's leadership
capacity, some of the welfare reform proposals provide opportunities
for better alignment among stated priorities and incentive funding. 
In addition, some target the audit process for change.  By focusing
financial rewards on performance in critical areas in addition to
cost-effectiveness, the proposed funding structures emphasize the
importance of activities such as paternity establishment that may not
bring immediate collections.  Furthermore, by focusing the audits
more on program outcomes and the quality of the data used to measure
the outcomes rather than on compliance with certain requirements,
welfare reform provides the opportunity to improve information for
future decision-making. 

Many of the current proposals for welfare reform would add to OCSE's
responsibilities for providing technical assistance and training and
for monitoring state programs.  As demonstrated by our findings in
this report and our earlier testimony,\56 OCSE is already struggling
with existing requirements in these critical support areas.  Absent
the reengineering of some OCSE processes, such as the audit, and an
organizational structure with clear lines of authority and OCSE
accountability, welfare reform seems likely to present OCSE with
serious difficulties in achieving desired results. 

In addition, new requirements in the various welfare reform proposals
would force legislative action in some states where the CSE programs
have been unable to obtain the authority to pursue certain measures. 
However, the new requirements would also expand the authority and
responsibilities of state CSE programs, requiring more stringent
paternity establishment procedures, central registries, centralized
collections, and work requirements for noncustodial parents, among
others.  Some of the new requirements could also add to the confusion
about CSE's mission, goals, and priorities described in chapter 2. 
Given all these likely impacts of welfare reform on OCSE, it is all
the more important that changes be made to address the current lack
of alignment among stated priorities, expectations, performance
measurement, and incentive funding. 


--------------------
\56 Child Support Enforcement:  Federal Efforts Have Not Kept Pace
With Expanding Program (GAO/T-HEHS-94-209, July 20, 1994). 


   RECOMMENDATIONS TO HHS
---------------------------------------------------------- Chapter 5:6

We recommend that the Secretary of HHS take three actions.  First,
direct OCSE to address the following issues in its future planning
efforts, in conjunction with major program stakeholders such as the
Congress, state program managers, regional CSE specialists, and
appropriate advocacy groups: 

individualized state performance goals based on such factors as past
state performance, demographics, and degree of automation;

data quality improvement;

funding-structure changes that will retain the current
performance-based approach but make it supportive of mission
priorities; and

methods for improving federal-state communication and working
relationships. 

Second, the Secretary should direct OCSE to establish performance
goals that are linked to the fulfillment of OCSE's mission.  In this
process, we believe OCSE should consider setting outcome goals, in
addition to output goals, in the areas of timely regulatory
development, clear policy direction and responsiveness to state
programs, cooperative planning, and technical assistance. 

Third, the Secretary should establish an organizational structure and
reporting mechanisms for OCSE that support program priorities, set
OCSE performance goals, and provide greater federal CSE program
accountability among the regional staff and activities. 

We recognize that during the 103rd Congress the Secretary sought
statutory changes to reform OCSE's audit approach and to change the
program funding structure within the context of welfare reform. 
Because we believe changes to the audit approach and funding
structure are essential for the program, we recommend that the
Secretary continue to pursue the statutory initiatives to these ends,
as appropriate. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 5:7

HHS provided written comments on a draft of this report (see app. 
V).  HHS stated that our report was comprehensive and presented a
balanced appraisal of the CSE program's accomplishments over the past
decade.  It commented, however, that the funding levels for OCSE
training and technical assistance activities in the last decade
should be depicted in the context of increasing stringency in the
federal budget for nearly all discretionary spending. 

In addition, HHS stated that our recommendations were well taken. 
For most of the recommendations, HHS provided additional information
about actions it has already taken or is planning that we believe are
responsive to our recommendations.  However, we remain concerned that
HHS' comments do not (1) indicate that OCSE is establishing
performance goals for itself, (2) address the organizational
accountability weaknesses we have identified, and (3) specify a plan
for obtaining statutory changes for the funding structure and audit
approach. 

With respect to our first recommendation regarding issues important
to OCSE's planning efforts, HHS commented that OCSE has taken or is
planning several actions that we consider responsive.  It is planning
to develop individual annual performance plans with state CSE
agencies that will contain specific performance goals taking into
consideration factors we mentioned and others.  In terms of improving
data quality, OCSE has recently started refining standard definitions
for data elements and plans to meet with regional and state staff to
achieve consensus on common terminology.  In addition, OCSE is
seeking to improve federal-state communication and working
relationships through state visits by OCSE's deputy director and
through developing various forums for more interaction with the
states. 

In response to our second recommendation regarding the establishment
of OCSE performance outcome goals that are linked to its mission,
OCSE intends to develop an internal performance plan.  While HHS
provided additional information about the steps OCSE is taking to
enhance training and establish staffing standards, it did not
indicate that the performance plan will contain goals, either outcome
or output, for OCSE.  We believe that such outcome goals are
essential for OCSE to (1) clarify its role and relationship to state
programs, (2) focus on results, and (3) better hold regional
resources accountable.  We have clarified our recommendation to
emphasize that OCSE should establish what outcomes it wants to
accomplish with its actions. 

With respect to our third recommendation on organizational structure
and reporting mechanisms, HHS described a recent reorganization, but
its comments do not indicate how this reorganization will ensure
regional office accountability for federal CSE activities.  HHS
states that ACF has reorganized so that the 10 regional
administrators report directly to a new ACF Director of Regional
Operations rather than the Assistant Secretary for ACF.  In addition,
an Assistant Director for Child Support Regional Operations has been
established to assist in the direction and coordination of child
support activities by the regions.  HHS comments do not indicate,
however, what reporting mechanisms it will use to obtain an up-front
commitment of regional staff and travel resources to CSE and
accountability for results of CSE activities.  We continue to believe
that such commitment is necessary to ensure that OCSE knows what
regional resources are devoted to CSE and how regional actions will
support OCSE's performance goals and foster state goal achievement. 

Finally, HHS' comments do not specify plans for changing the audit to
make it more outcome-oriented or for reintroducing legislation to
change the program funding structure.  We continue to believe that
the Secretary should pursue statutory initiatives as appropriate to
bring about needed changes.  We have clarified the language of our
recommendation to this effect. 


DESCRIPTIONS OF BASIC CSE SERVICES
=========================================================== Appendix I

Client intake involves opening a case record and compiling data on
the custodial family and noncustodial parent.  The custodial parent
is interviewed and referral (from AFDC or other states' agencies) and
application forms are screened to determine if the information
provided is complete and accurate.  Outside contacts may be necessary
to secure all needed information. 

Noncustodial parent locator services include efforts at local, state,
and federal levels to identify a noncustodial parent's address,
social security number, place of employment, or the like.  This might
include efforts to directly contact individuals; contacts with public
and private institutions, such as credit bureaus, state and federal
income tax agencies; and computer tape matches. 

Paternity establishment is the identification of the legal father of
a child, usually through the courts or expedited through hearings in
a quasi-judicial or administrative body.  Paternities are established
in either of two ways:  (1) through voluntary acknowledgment by the
father or (2) if contested, through a determination based on
scientific and testimonial evidence.  Initiation of the paternity
process varies depending on whether the mother is an AFDC recipient. 
Mothers who receive AFDC assistance are required by law to cooperate
in locating and identifying the father of the child for whom aid is
requested.  Mothers who do not receive AFDC, however, are under no
legal obligation to establish paternity and may voluntarily seek CSE
services. 

Support order establishment and review and modification involves the
development of a support order that legally obliges the noncustodial
parent to pay child support and provide medical insurance coverage
when available at reasonable cost.  It also involves the periodic
review and adjustment of the order at least every 3 years in AFDC
cases and upon parental request in non-AFDC cases.  The CSE agency
must assist custodial parents in initiating an action in court or
through an administrative or expedited legal process that will
produce such an order.  The CSE agency helps in the determination of
a child's financial needs and the extent to which the noncustodial
parent can provide financial support and medical insurance coverage. 

Enforcement refers to a wide array of techniques at the disposal of
CSE agencies to enforce payment on delinquent cases or to ensure
regularity and completeness of current accounts.  These techniques
include bonds and security deposits, federal and state tax
intercepts, garnishments, liens, and wage withholding, among others. 

Collections processing refers to the processing, recording, and
distributing of child support collections from noncustodial parents. 
On AFDC cases, if the monthly collection is insufficient to
disqualify the family from AFDC, the family receives its full monthly
AFDC grant plus the first $50 of the support payment.  The remainder
of the support payment is distributed to reimburse the state and
federal governments in proportion to their assistance to the family. 
On non-AFDC cases, and in AFDC cases where the family's income
including the support payment is sufficient to make it ineligible for
AFDC, support payments are paid directly to the family. 


MAJOR REQUIREMENTS OF THE 1984 AND
1988 CSE AMENDMENTS
========================================================== Appendix II


   CHILD SUPPORT ENFORCEMENT
   AMENDMENTS OF 1984
-------------------------------------------------------- Appendix II:1

In the event of arrearages, automatic wage withholding for IV-D cases
and based on application in non-IV-D cases\57

"Expedited processes" to establish and enforce support
orders--defined as faster, more efficient and under which presiding
officers are not judges

Withholding of state tax refunds if parents are delinquent in support
payments

Imposition of liens against real and personal property for amounts of
overdue support

Permit establishment of paternity up to a child's 18th birthday

Security bonds required of noncustodial parents to secure overdue
support payments

Consumer credit bureaus receive upon request data on overdue support
of any noncustodial parent

Nonbinding state guidelines for child support available to judges and
other officials

Non-AFDC families charged service fees

Annual notices of support collections to AFDC recipients

Noncustodial parents may be charged late payment fees

Federal incentives to local offices

Continuation of CSE services after AFDC termination

CSE services for children in foster care cases

Enforcement of spousal support\58

CSE services publicized

Equal provision of CSE services to AFDC and non-AFDC families

Inclusion of provision for medical support in orders

Withholding federal tax refunds of non-AFDC families

Extension of Medicaid eligibility when support collections result in
termination of AFDC


--------------------
\57 IV-D cases are those enforced under Title IV-D of the Social
Security Act.  Non-IV-D cases are not enforced under Title IV-D but
may apply for services other than enforcement. 

\58 Enforcement of legal obligations for support of a spouse or
former spouse who is living with a child or children to whom an
individual owes child support. 


   FAMILY SUPPORT ACT OF 1988
-------------------------------------------------------- Appendix II:2

Immediate wage withholding on orders:  new and modified IV-D;
delinquent non-IV-D (November 1990); and all new non-IV-D (January
1994)

Recording of parents' social security numbers at children's births

Paternity establishment performance standards

State guidelines for child support as a rebuttable presumption

Periodic review of state child support guidelines

Time standards for response to requests for services

States give information to the Federal Parent Locator Service

Civil and voluntary paternity acknowlegment procedures encouraged

Extend the paternity statute of limitations up to a child's 18th
birthday

Genetic testing in contested cases

Periodic review and modification of support orders

Monthly notices of collections

Statewide automated systems

Time standards for distribution of collections


SELECTED CHARACTERISTICS OF EIGHT
STATE CSE PROGRAMS, 1992-1993
========================================================= Appendix III

                                                            Massachusett
Characteristic           Arizona        Iowa      Kentucky             s            New York             Oregon             Texas            Virginia
------------------  ------------  ----------  ------------  ------------  ------------------  -----------------  ----------------  ------------------
Caseload                 195,189     126,321       242,768       210,594           1,007,058            195,347           696,761             294,148
AFDC                     100,197      60,351       141,372       140,748             510,494            105,087           353,056             150,026
Non-AFDC                  94,992      65,970       101,396        69,846             496,564             90,260           343,705             144,122

Administrative expenditures (in millions)
-----------------------------------------------------------------------------------------------------------------------------------------------------
Federal share              $20.9       $11.1         $21.8         $29.4              $101.1              $14.1             $66.5               $34.1
State share                  8.7         5.5           9.9          14.9                50.5                7.0              32.6                15.9
Total                      $29.6       $16.6         $31.6         $44.3              $151.6              $21.1             $99.1               $50.0
Incentive payments         $ 1.5       $ 6.6         $ 4.4         $10.2              $ 19.0              $ 4.2             $ 8.9               $ 4.7
 to states
 (estimated)
Full-time                    900         346           831           831               2,979                410             2,057                 935
 equivalent
 staff\a

Administration
-----------------------------------------------------------------------------------------------------------------------------------------------------
State administered             X           X             X             X                                      X                 X                   X
County                        \b                        \c                                 X                 \d
 administered

Operational organization
-----------------------------------------------------------------------------------------------------------------------------------------------------
Centralized                                X                           X                                   AFDC                 X                   X
Decentralized                  X                         X                                 X           non-AFDC                \e
Placement of CSE          social      social        social                   social services    social services  attorney general     social services
 office in state        services    services      services       revenue
 government

Predominant case process
-----------------------------------------------------------------------------------------------------------------------------------------------------
Judicial                       X                         X             X                               non-AFDC                 X
Administrative                           X\f                                                               AFDC                                     X
Mixed or quasi-                            X                                               X
 judicial
HHS region number              9           7             4             1                   2                 10                 6                   3

Selected enforcement tools
-----------------------------------------------------------------------------------------------------------------------------------------------------
New-hire reporting            no       yes\g            no           yes                  no              yes\h       voluntary\i               yes\j
License revocation         yes\k          no            no         yes\l                  no              yes\m                no                  no
-----------------------------------------------------------------------------------------------------------------------------------------------------
Notes:  Caseload, expenditure, and staffing data reported by the
states for fiscal year 1992; other information in this table as of
June 1993 unless otherwise indicated.

Some numbers may not add to totals shown because of rounding. 

\a Total number of full-time equivalent staff employed by the state
agency and any local agencies as well as the number of full-time
equivalent staff employed by an agency (public or private) working
under cooperative agreement or a purchase-of-service agreement with
the CSE agency. 

\b Five of 15 programs are operated by local county attorneys under
contract with the state. 

\c In all counties, many services, such as paternity and order
establishment and enforcement on cases needing paternity
establishment, are provided through county attorneys under contract. 

\d Under contracts with the state CSE office, AFDC cases are handled
by branch offices of the state department of justice and non-AFDC
cases are handled by county district attorneys. 

\e Payment processing is not centralized. 

\f Iowa adopted administrative paternity establishment effective July
1, 1993. 

\g Effective January 1, 1994. 

\h Legislation passed November 1993 for a pilot project limited to
eight employment classifications through June 1995. 

\i Effective September 1, 1993. 

\j Effective July 1, 1993. 

\k Trade, professional, sport, and business licenses. 

\l Trade, professional, and driver's licenses as of August 1994. 

\m Trade and business licenses. 


SELECTED CSE PROGRAM REQUIREMENTS
IN EIGHT WELFARE REFORM PROPOSALS
========================================================== Appendix IV


Provision                           H.R. 4318   H.R. 4414   H.R. 4126       H.R. 4566      S. 2224        S. 1795        H.R. 3500      H.R. 4476
----------------------------------  ----------  ----------  --------------  -------------  -------------  -------------  -------------  -------------
Program requirement
-----------------------------------------------------------------------------------------------------------------------------------------------------
Revised audits                      X                                                      X                                            X

Strengthened paternity              X           X                           X              X              X              X              X
establishment provisions

National support order registry     X           X           X                              X                                            X

National directory of newly hired                                                          X                                            X
employees

Nationwide reporting of newly       X           X           X               X              X                             X              X
hired employees and employee
support obligations

Expanded role of Federal Parent                 X           X               X              X              X              X              X
Locator Service

Training programs                                                                          X                                            X

State program databases                         X           X               X              X              X              X              X

Expanded service population         X                       X                              X                                            X

Revised collection distribution                             X                              X                                            X
priority

Revised funding structure           X                                                      X                                            X

State staffing studies or           X                                                      X                                            X
standards


New state authority/mandates
-----------------------------------------------------------------------------------------------------------------------------------------------------
Driver's license restrictions                                                              X                                            X

Periodic review and modification                                                           X                                            X
of orders

Professional license suspension                                                            X                                            X

Support order registry                          X           X               X              X              X              X              X

Centralized collection and                                                                 X                                            X
distribution

Administrative process                                                                     X                                            X

Work by noncustodial parents                                                               X              X              X
-----------------------------------------------------------------------------------------------------------------------------------------------------



(See figure in printed edition.)Appendix V
COMMENTS FROM THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES
========================================================== Appendix IV



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


GAO CONTACTS AND STAFF
ACKNOWLEDGMENTS
========================================================== Appendix VI

GAO CONTACTS

David P.  Bixler, Assistant Director, (202) 512-7201
Sarah A.  Morrison, Project Director
Cathy Pardee, Deputy Project Director, (202) 512-7237

ACKNOWLEDGMENTS

In addition to those named above, the following individuals made
important contributions to this report:  Linda Baker co-authored the
report; Daniel Bertoni and Dylan Jones led the data collection in
four states and co-authored portions of the draft; Barbara Bordelon
provided guidance about GPRA implementation; Leslie Albin edited the
report; Kevin Kumanga provided guidance from past GAO work; Craig
Winslow provided legal assistance; and Dan Brier, Alice Spargo,
Gerard Grant, Harry Johnson, and George Scott provided


RELATED GAO PRODUCTS
============================================================ Chapter 1

Child Support Enforcement:  Federal Efforts Have Not Kept Pace With
Expanding Program (GAO/T-HEHS-94-209, July 20, 1994). 

Child Support Enforcement:  Credit Bureau Reporting Shows Promise
(GAO/HEHS-94-175, June 3, 1994). 

Child Support Enforcement:  States Proceed With Immediate Wage
Withholding; More HHS Action Needed (GAO/HRD-93-99, June 15, 1993). 

Child Support Assurance:  Effect of Applying State Guidelines to
Determine Fathers' Payments (GAO/HRD-93-26, Jan.  23, 1993). 

Child Support Enforcement:  Timely Actions Needed to Correct System
Development Problems (GAO/IMTEC-92-46, Aug.  13, 1992). 

Child Support Enforcement:  Opportunity to Defray Burgeoning Federal
and State Non-AFDC Costs (GAO/HRD-92-91, June 5, 1992). 

Medicaid:  Ensuring That Noncustodial Parents Provide Health
Insurance Can Save Costs (GAO/HRD-92-80, June 17, 1992). 

Interstate Child Support:  Wage Withholding Not Fulfilling
Expectations (GAO/HRD-92-65BR, Feb.  25, 1992). 

Interstate Child Support:  Mothers Report Less Support From
Out-of-State Fathers (GAO/HRD-92-39-FS, Jan.  9, 1992). 

Interstate Child Support:  Better Information Needed on Absent
Parents for Case Pursuit (GAO/HRD-90-41, May 24, 1990). 

Child Support:  State Progress in Developing Automated Enforcement
Systems (GAO/HRD-89-10FS, Feb.  10, 1989). 

Interstate Child Support:  Case Data Limitations, Enforcement
Problems, Views on Improvements Needed (GAO/HRD-89-25, Jan.  27,
1989). 

Child Support:  Need to Improve Efforts to Identify Fathers and
Obtain Support Orders (GAO/HRD-87-37, Apr.  30, 1987). 

