Performance audit, Arizona Department of Economic Security, Division of Child Support Enforcement

              State of Arizona
Office
of the
Auditor General
PERFORMANCE AUDIT
Report to the Arizona Legislature
By Debra K. Davenport
Auditor General
Division
of
Child Support
Enforcement
ARIZONA
DEPARTMENT
OF
ECONOMIC SECURITY
January 2001
Report No. 01-01
The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee
composed of five senators and five representatives. Her mission is to provide independent and impar-tial
information and specific recommendations to improve the operations of state and local government
entities. To this end, she provides financial audits and accounting services to the state and political
subdivisions and performance audits of state agencies and the programs they administer.
The Joint Legislative Audit Committee
Representative Roberta L. Voss, Chairman
Senator Tom Smith, Vice-Chairman
Representative Robert Burns Senator Keith Bee
Representative Ken Cheuvront Senator Herb Guenther
Representative Andy Nichols Senator Darden Hamilton
Representative Barry Wong Senator Pete Rios
Representative Jeff Groscost Senator Brenda Burns
(ex-officio) (ex-officio)
Audit Staff
Dot Reinhard—Manager
and Contact Person (602) 553-0333
Catherine Dahlquist—Team Leader
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
2910 N. 44th Street, Suite 410
Phoenix, AZ 85018
(602) 553-0333
Additionally, many of our reports can be found in electronic format at:
www.auditorgen.state.az.us
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
January 11, 2000
Members of the Arizona Legislature
The Honorable Jane Dee Hull, Governor
Mr. John Clayton, Director
Department of Economic Security
Transmitted herewith is a report of the Auditor General, A Performance Audit of the Arizona
Department of Economic Security, Division of Child Support Enforcement. This report was
completed pursuant to the provisions of Laws 1996, Chapter 290.
As outlined in its response, the agency agrees with all of the findings and recommendations.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on January 12, 2001.
Sincerely,
Debbie Davenport
Auditor General
Enclosure
OFFICE OF THE AUDITOR GENERAL
Program Fact Sheet
Department of Economic Security
Division of Child Support Enforcement
Services: The Division of Child Support Enforcement administers Arizona’s federally
mandated child support program, which provides services to approximately 268,000 fami-lies.
Program staff provide the following services: 1) Locate—Find noncustodial parents
whose whereabouts are unknown using information from a variety of sources including the
Arizona Motor Vehicle Division and U.S. Postal Service; 2) Paternity establishment—
Obtain a legal determination of paternity for children born out of wedlock; 3) Support order
establishment—Obtain a court order that indicates the dollar amount the noncustodial par-ent
must pay each month to help raise his or her child; and 4) Collection enforcement—
Ensure noncustodial parents pay their child support obligation by using various remedies
such as income withholding and tax offsets.
Program Revenue: $60.3 million
(Estimated fiscal year 2000)
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
1998 1999 2000
Federal State County Other
Operating Entity and Caseload
by County
Apache
5,583
Navajo
8,632
Coconino
Mohave 5,678
11,010
Yavapai
6,083
Gila
4,366
La Paz
1,130 Maricopa
145,061
Pinal
13,111
Graham
Yuma 2,920
8,585
Pima
42,370 Cochise
5,507
Greenlee
418
Santa Cruz
1,477
Division County Attorney Private Contra ctor
Personnel: 1,017 employees
(as of September 30, 1999)
Temporary
(45)
Contract
(27) Division
(570)
Attorney
General
(102)
County
(273)
Program Mission:
“To provide effective and fair child
support services.”
OFFICE OF THE AUDITOR GENERAL
Facilities: The program operates out of 17
offices located around the State. The Division
leases facilities in Phoenix (4 locations), Flag-staff,
Safford, Kingman, and Yuma at a cost of
approximately $2,500,000 in fiscal year 2000.
The remaining offices are operated by the
Division’s county partners and private con-tractor
(see state map on previous page).
Equipment: In addition to standard office
equipment, the program also owns an interac-tive
voice response system to provide its cli-ents
with access to a wide range of program
and individual case information through the
telephone.
Program Goals (Fiscal Year 2000):
1. To increase child support collections;
2. To increase customer satisfaction;
3. To improve the program’s cost-effectiveness
ratio;
4. To increase the number of paternity estab-lishments
for children born out of wedlock;
5. To increase the establishment of legal obli-gations
of support; and
6. To increase compliance with court orders.
Adequacy of Performance Measures:
The program’s six goals appear to be aligned
with its mission. Its goals include 6 objectives
and 31 performance measures, including
quality, efficiency, and outcome measures.
The program could improve its measures by
also reporting the percentage of individu-als/
families needing services who receive
those services; for example, the percentage of
children needing paternity each year who
had it established.
i
OFFICE OF THE AUDITOR GENERAL
SUMMARY
The Office of the Auditor General has conducted a performance
audit of the Arizona Department of Economic Security (Depart-ment),
Division of Child Support Enforcement (Division). This
audit was completed pursuant to the provisions of Laws 1996,
Chapter 290, which requires the Office of the Auditor General to
review the Division’s customer service operations, privatization
efforts, debt calculation errors, Arizona Tracking and Location
Automated System operations, and effectiveness of Division
operations.1 This report is the second in a two-part series and
focuses on the Division’s effectiveness and automated system.2
The Division administers the federally mandated child support
enforcement program. In Arizona, individuals receiving public
assistance monies are automatically referred to the program. In
addition, individuals not receiving public assistance monies can
apply for and receive program services at no cost. These services
include locating noncustodial parents, establishing paternity,
and placing income withholding orders on noncustodial parents’
paychecks to ensure that child support is paid. The program
collected and distributed $184 million during fiscal year 1999 for
its approximately 268,000 cases. The program has received sev-eral
awards for its accomplishments including the Governor’s
Spirit of Excellence award for successfully centralizing child
support payment processing.
1 Amended by Laws 1999, Chapter 199, to extend the due and repeal
date.
2 The first report was issued in July 1999 (Auditor General Report No.
99-11) and covered customer service operations, privatization efforts,
and debt calculations.
Program services are
provided at no cost.
Summary
ii
OFFICE OF THE AUDITOR GENERAL
Program Effectiveness Improving,
But Additional Enhancements Needed
(See pages 15 through 20)
Over the past few years, the program has increased both the
amount of child support collected and the number of families
receiving support on a regular basis. Between fiscal years 1994
and 1999 the program doubled its annual distributed collections,
collecting $184 million during fiscal year 1999. The program has
also increased the percentage of regular payers and the percent-age
of cases receiving at least one payment during the year.
Despite these improvements, about 40 percent of the program’s
support-ordered cases still receive no child support. For exam-ple,
during fiscal year 1999 about 46,000 families received none of
the $112 million in support owed to them. Because of the signifi-cant
percentage of nonpayers, the program may fail to maximize
the federal incentive monies that it uses to help support the pro-gram’s
cost. The federal government generally pays 66 percent of
the program’s expenditures and also provides states with incen-tive
money when their programs achieve certain levels of per-formance.
During fiscal year 1999, the program received an esti-mated
$3.9 million in federal incentive monies.
Program Needs to Improve Its
Paternity Establishment Performance
(See pages 21 through 31)
The program needs to enhance its performance in establishing
paternity for the children in its caseload. While establishing pa-ternity,
which is identifying a child’s legal father, is a critical first
step in the child support process for many of the program’s
cases, the program has not been very successful in this area. Al-though
the program needs to establish paternity for more than
100,000 children in any year, during fiscal years 1997 to 1999 the
program established paternity for less than 10 percent of the
children needing it. Further, when the program does establish
paternity, the procedure often takes several months or even
years. For example, the median time for the program to establish
paternity during fiscal years 1997 to 1999 was 18 months.
Despite improvements,
about 40 percent of
support-ordered cases
receive no child support.
Summary
iii
OFFICE OF THE AUDITOR GENERAL
Establishing paternity can often be difficult because the mother
may not know the location of the alleged father and the program
must try and locate him to inform him of the program’s intent to
establish paternity. However, if the program’s performance does
not improve, it may fail to maximize the federal incentive dollars
it uses to support the program. Historically, about 6 to 7 percent
of the program’s revenue came from these incentive dollars. To
help improve its performance, the program should take a variety
of actions, including working with program stakeholders to
determine the feasibility of seeking additional administrative
authority to establish paternity; continuing to close cases accord-ing
to federal closure criteria; and examining and redistributing
caseloads more equally among its caseworkers.
Program Needs to Continue to
Improve its Performance in
Establishing Child Support Orders
(See pages 33 through 39)
Similar to the paternity establishment area, the program needs to
improve its performance in establishing support orders. A sup-port
order is the court document that outlines the monthly dollar
amount of child support the noncustodial parent must pay.
However, the program establishes support orders for only 16
percent of the cases that need them at the beginning of each year.
In addition, during fiscal years 1997 to 1999 the median amount
of time the program took to establish a support order was about
16 months. Nevertheless, the program is increasing the number
of support-ordered cases in its caseload each year and should be
eligible for at least some of the federal incentive monies available
for this area.
The program should work with its stakeholders to assess the
feasibility of seeking authority to administratively establish sup-port
orders. Depending on the type of administrative authority
granted to the program, the program could establish support
orders without court involvement. Because the State has estab-lished
child support guidelines, the program has clear directions
for what things should be considered when calculating the
monthly dollar amount of child support due or any past-due
amounts. In addition, the program should continue to close cases
according to federal closure criteria.
The program should
review with its stake-holders
the feasibility of
seeking authority to
administratively estab-lish
support orders.
Summary
iv
OFFICE OF THE AUDITOR GENERAL
Collection Enforcement Actions Can
Be Targeted to Increase Effectiveness
(See pages 41 through 49)
The program has a variety of strategies it can use to enforce
payment of a child support order. The program has authority to
implement many of these strategies administratively, but some
of them, such as license suspension, require judicial involvement.
However, most enforcement actions can be started automatically
by the program’s computer system. The program has found
income withholdings and tax offsets to be two of its most effec-tive
enforcement techniques.
Although the program has a variety of enforcement strategies
available, the program needs to explore additional strategies
directed to nonpayers. Many of the enforcement strategies, such
as income withholdings, are designed for individuals with the
resources to pay. Yet, research suggests that many of the noncus-todial
parents who do not pay have limited ability to pay based
on their income and education levels, and intermittent employ-ment.
Therefore, similar to efforts underway in other states, the
program should consider sorting cases based on the ability to
pay. Sorting cases would allow the program to direct its en-forcement
efforts to those who have the resources to pay, while
referrals to job readiness and training services can be provided to
those noncustodial parents who are unemployed or otherwise
lack the ability to pay.
In addition, the program should consider some approaches for
reducing its large past-due child support balance, much of which
may be uncollectible. For example, some states have policies that
prevent the build up of large past-due balances for low-income
noncustodial parents, or policies that allow the state to forgive a
portion of the past-due balances owed to the state if the noncus-todial
parent successfully completes a work or training program.
However, forgiveness policies do not address the past hardships
endured by the custodial parent and children because of the
nonpayment of child support.
Many enforcement
actions are designed for
individuals with the
resources to pay.
Summary
v
OFFICE OF THE AUDITOR GENERAL
Program Has Successfully Established
Statewide Automated System
(See pages 51 through 53)
The program has effectively developed and implemented a state-wide
automated system known as the Arizona Tracking and Lo-cation
Automated System (ATLAS). ATLAS records comprehen-sive
information about the program’s cases and supports the pro-gram’s
major case management functions including locate, pater-nity
and support order establishment, debt calculation, financial
management, and payment disbursement. Arizona has consis-tently
been one of the first states to seek and receive federal certifi-cation
of its system. In addition, the program has instituted an
effective system of controls for helping ensure access to the system
is limited to appropriate users and that data is accurately entered
and maintained on the system.
vi
OFFICE OF THE AUDITOR GENERAL
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vii
OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS
Page
Introduction and Background.......................... 1
Finding I: Program Effectiveness
Improving, But Additional
Enhancements Needed................................ 15
Program Collecting More
Dollars for More Cases ................................................... 15
Many Families Still
Receive No Child Support.............................................. 17
Increased Effectiveness Depends on
Improvements in Three Key Areas................................ 20
Finding II: Program Needs to
Improve Its Paternity
Establishment Performance........................ 21
Limited Success
in Establishing Paternities.............................................. 21
Paternity Establishment
Performance May Fail
to Maximize Federal
Incentive Dollars ............................................................. 24
Some Case Characteristics
Impact Performance........................................................ 25
Program Should Continue
Its Efforts to Improve Paternity
Establishment Performance............................................ 27
Recommendations .......................................................... 31
Table of Contents
viii
OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS (Cont’d)
Page
Finding III: Program Needs to
Continue to Improve Its Performance
in Establishing Child Support Orders......... 33
Support Order Establishment
Area Has Two Significant Areas
for Improvement............................................................. 33
Program Increasing Percentage
of Support-Ordered Cases.............................................. 36
Division Should Develop
Strategy to Improve
Performance.................................................................... 38
Recommendations .......................................................... 39
Finding IV: Collection Enforcement
Actions Can Be Targeted
to Increase Effectiveness............................ 41
Program Uses a Variety
of Techniques to Enforce
Child Support Obligations ............................................. 41
Program Should Explore
New Ways to Reach Nonpayers .................................... 44
Recommendations .......................................................... 49
Finding V: Program Has Successfully
Established Statewide
Automated System ...................................... 51
ATLAS Has Developed Into
a Comprehensive Management System........................ 51
Table of Contents
ix
OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS (Cont’d)
Page
Finding V: (Concl’d)
System Successfully Passed
System Certification Reviews......................................... 52
Management Controls Help
Ensure Data Reliability................................................... 53
Agency Response
Tables
Table 1 Arizona Department of Economic Security
Child Support Enforcement Program
Statement of Revenues and Expenditures
Years Ended June 30, 1998, 1999, and 2000
(Unaudited)................................................... 8
Table 2 Arizona Department of Economic Security
Child Support Enforcement Program
Enforcement Remedies................................. 42
Table 3 Arizona Department of Economic Security
Child Support Enforcement Program
Frequency of Enforcement Remedies
Year Ended June 30, 1999............................. 43
Figures
Figure 1 Arizona Department of Economic Security
Child Support Enforcement Program
Percentage of Cases by Family History
of Public Assistance
As of June 30, 1999 ........................................ 3
Figure 2 Arizona Department of Economic Security
Child Support Enforcement Program
Child Support Enforcement Process
As of October 2000........................................ 4
Table of Contents
x
OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS (Cont’d)
Page
Figures (Cont’d)
Figure 3 Arizona Department of Economic Security
Child Support Enforcement Program
Operating Entity and Caseload by County
As of June 1999.............................................. 6
Figure 4 Arizona Department of Economic Security
Child Support Enforcement Program
Total Annual Distributed Collections
Years Ended June 30, 1994 through 1999
(Unaudited)................................................... 16
Figure 5 Arizona Department of Economic Security
Child Support Enforcement Program
Comparison of Growth Rates for
Total Arrears and Distributed Collections
Balances for Years 1994 through 1999
(Unaudited)................................................... 18
Figure 6 Arizona Department of Economic Security
Child Support Enforcement Program
Paternities Needed and Established
Years Ended June 30, 1997, 1998,
and 1999......................................................... 23
Figure 7 Arizona Department of Economic Security
Child Support Enforcement Program
Timeliness in Establishing Paternities
Years Ended June 30, 1997, 1998,
and 1999......................................................... 23
Table of Contents
xi
OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS (Concl’d)
Page
Figures (Concl’d)
Figure 8 Arizona Department of Economic Security
Child Support Enforcement Program
Support Orders Needed and Established
Years Ended June 30, 1997, 1998,
and 1999......................................................... 35
Figure 9 Arizona Department of Economic Security
Child Support Enforcement Program
Timeliness in Establishing Support Orders
Years Ended June 30, 1997, 1998,
and 1999......................................................... 35
Figure 10 Arizona Department of Economic Security
Child Support Enforcement Program
Percentage of Total Caseload with
Support Orders
Years Ended June 30, 1997, 1998,
and 1999......................................................... 37
Figure 11 Arizona Department of Economic Security
Child Support Enforcement Program
Percentage of Paying and Nonpaying Cases by
Monthly Amount Ordered
Year Ended June 30, 1999............................. 46
xii
OFFICE OF THE AUDITOR GENERAL
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1
OFFICE OF THE AUDITOR GENERAL
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance
audit of the Arizona Department of Economic Security (Depart-ment),
Division of Child Support Enforcement (Division). This
audit was completed pursuant to the provisions of Laws 1996,
Chapter 290, which requires the Office of the Auditor General to
review the Division’s customer service operations, privatization
efforts, debt calculation errors, Arizona Tracking and Location
Automated System operations, and effectiveness of Division
operations.1 This report is the second in a two-part series and
focuses on the Division’s effectiveness and automated system.2
Child Support Enforcement
Program Seeks to Help
Families Become Self-Sufficient
The Division administers the federally mandated child support
enforcement program. The program’s mission is to help custo-dial
parents become or remain self-sufficient, in part by ensuring
that noncustodial parents meet their child support responsibili-ties.
This program, outlined in Title IV-D of the Social Security
Act of 1975 and known as the IV-D program, was initially de-signed
to primarily serve custodial parents receiving public as-sistance
monies. As part of receiving public assistance monies,
the custodial parent assigns his or her right to child support col-lections
to the State. Then, when the State’s IV-D program col-lects
child support payments on that case, it uses that money up
to the court-ordered amount or the cumulative amount of the
public assistance grant, whichever is less, to help offset its pro-gram
costs. By establishing child support orders and collecting
1 Amended by Laws 1999, Chapter 199, to extend the due and repeal dates.
2 The first report was issued in July 1999 (Auditor General Report No. 99-11)
and covered customer service operations, privatization efforts, and debt
calculations.
The program was initially
designed to serve custo-dial
parents receiving
public assistance.
Introduction and Background
2
OFFICE OF THE AUDITOR GENERAL
on those orders, the program also works to eliminate families’
need for public assistance monies.
In 1984, the federal government expanded the IV-D program to
also provide services to individuals not receiving public assis-tance.
In Arizona, individuals who are not receiving public assis-tance
but who want help from the State can apply for and receive
the State’s IV-D child support services at no cost. Child support
cases for individuals not using the State’s IV-D services are
known as non-IV-D cases.
Child Support Enforcement
Process and Program Services
Arizona’s IV-D Child Support Enforcement Program provides a
variety of services to approximately 268,000 cases.1 A case con-sists
of a custodial parent, a noncustodial parent, and the legal
children of those parents. As illustrated in Figure 1 (see page 3),
the program’s cases primarily include families who currently
receive public assistance or received public assistance in the past.
However, the program’s cases also include families who have
never received public assistance but have applied to receive the
State’s IV-D services.
Process and services—The child support enforcement process
involves several steps. When a case enters the program, it may
progress through all the steps or only some of them (see Figure 2,
page 4). All cases start at intake, which involves opening the case
and gathering data on the custodial family and noncustodial
parent. Then, depending on the services needed, the case may
progress to paternity, which involves identifying the child’s or
children’s legal father; support order establishment, which in-volves
obtaining a court order that indicates the monthly dollar
amount the noncustodial parent must pay to help cover the cost
of raising his or her child(ren); and collections and enforcement,
which involves ensuring that the noncustodial parent pays his or
her child support obligation. The majority of the program’s cases
begin in the paternity function and thus require the program to
provide the complete array of services.
1 At the end of fiscal year 1999, the program had 268,408 open cases, involv-ing
414,255 children.
Introduction and Background
3
OFFICE OF THE AUDITOR GENERAL
In addition, if the program loses contact with the noncustodial
parent at any time throughout the process, the program will
initiate services to locate the parent. Locating the noncustodial
parent involves searching databases and using information from
a variety of resources, including the U.S. Postal Service, the In-ternal
Revenue Service, and the Arizona Motor Vehicle Division.
Benefits to children and families—The program’s services result
in many benefits for children and their families. Research has
found that children involved with their fathers are less likely to
become teen parents, less likely to be involved in the juvenile
justice system, and more likely to perform better in school. Estab-lishing
support orders and collecting on those orders is also im-portant.
Nationally, next to earnings, child support is the largest
source of income for poor, single, female-headed families. For
poor families who receive child support, this support amounts to
Figure 1
Arizona Department of Economic Security
Child Support Enforcement Program
Percentage of Cases by Family History of Public Assistance1
As of June 30, 1999
1 The program’s caseload also includes some cases for children who are in foster care. However, foster care
cases comprise less than 1 percent of the caseload.
Source: Auditor General staff analysis of automated data for cases open at any time between July 1,
1996, and June 30, 1999, provided by the Arizona Department of Economic Security, Division of
Child Support Enforcement.
Family currently receives
assistance (21%)
Family has never received
assistance (19%)
Family formerly
received assistance (60%)
Introduction and Background
4
OFFICE OF THE AUDITOR GENERAL
Figure 2
Arizona Department of Economic Security
Child Support Enforcement Program
Child Support Enforcement Process
As of October 2000
Source: Auditor General staff illustration of Arizona’s child support enforcement process.
No No
Public assistance
referral
Non-public assistance
application
Support
collected
?
Order
established?
Paternity
established?
Locate
Find the noncustodial parent by obtaining locate information from sources such as the
Arizona Motor Vehicle Division and the U.S. Postal Service.
About 84,000 cases needed locate services at July 1, 1999.
Intake
Open the
case and
gather
information
about the
parents and
children.
Paternity
Establishment
Identify the father legally
responsible for supporting
the child.
95,668 cases needed
paternity services at July
1, 1999.
Support Order
Establishment
Obtain a court order that
indicates the dollar amount
the noncustodial parent
must pay each month to
help raise their child.
43,378 cases needed
support order services at
July 1, 1999.
Collections
and Enforcement
Ensure the noncustodial
parent pays child support
by using various tools such
as income withholding and
tax offsets.
The program collected and
distributed $184 million
during fiscal year 1999.
Yes Yes
No
Custodial family
     
Yes
Introduction and Background
5
OFFICE OF THE AUDITOR GENERAL
an average of 26 percent (or $2,000) of the families’ annual in-come.
Further, when families receive at least some child support
during the year, their poverty rate drops significantly, from 33 to
22 percent.1
Organization and Staffing
Federal regulations require that each state name one entity re-sponsible
for administering the state’s IV-D child support en-forcement
program, and the Department of Economic Security,
Division of Child Support Enforcement has been named as Ari-zona’s
administering entity. However, as illustrated in Figure 3
(see page 6), a number of different entities along with the Divi-sion
perform local program operations, such as establishing pa-ternity
and enforcing child support orders. In Arizona, counties
have the first right to provide program services. Six counties
have exercised that right and their county attorney offices pro-vide
child support enforcement services. In seven counties, the
Division, in conjunction with the Attorney General’s Office, op-erates
the program. In the remaining two counties, the Division
has contracted with a private company to provide program ser-vices.
One-thousand seventeen employees statewide provide the vari-ous
child support enforcement program services.2 This number
includes 570 Division employees, such as the Assistant Director
and Deputy Assistant Director; regional managers, supervisors,
caseworkers, policy and procedures staff, program evaluation
staff, and systems and automation personnel; 102 Attorney Gen-eral
staff, 273 county employees, 27 private contractor personnel,
and 45 other temporary employees (clerical, accounting, pro-gramming,
and business analyst staff).
1 Turetsky, Vicki. What If All the Money Came Home? Center for Law and
Social Policy, June 2000.
2 The Division provided this number from its most recent count of employ-ees
that was done at the end of federal fiscal year 1999.
Introduction and Background
6
OFFICE OF THE AUDITOR GENERAL
Figure 3
Arizona Department of Economic Security
Child Support Enforcement Program
Operating Entity and Caseload by County1
As of June 1999
1 An additional 6,447 tribal cases within Apache, Coconino, and Navajo Counties are handled by the Navajo
Nation.
Source: Auditor General staff analysis of automated case data provided by the Arizona Department of Eco-nomic
Security, Division of Child Support Enforcement.
Division County Attorney Private contractor
Apache
5,583
Navajo
8,632
Coconino
Mohave 5,678
11,010
Yavapai
6,083
Gila
4,366
La Paz
1,130 Maricopa
145,061
Pinal
13,111
Graham
Yuma 2,920
8,585
Pima
42,370 Cochise
5,507
Greenlee
418
Santa Cruz
1,477
Introduction and Background
7
OFFICE OF THE AUDITOR GENERAL
Program Expenses and Income
As illustrated in Table 1 (see page 8), providing child support
enforcement services in Arizona cost an estimated $59 million
during fiscal year 2000. Funding for the program comes from
three primary sources—federal, state, and local monies. These
funding sources are more fully described in the following para-graphs:
n Federal monies—Two categories of federal monies contrib-ute
the majority of the program’s total revenue. First, federal
cost-sharing dollars generally reimburse 66 percent of the
program’s administrative expenditures, including personnel
costs, and professional and outside services. The program re-ceived
an estimated $39.8 million in federal cost-sharing
monies during fiscal year 2000.
Second, the federal government distributes incentive pay-ments
to states to encourage and reward effective programs.
These incentive monies have generally provided about 6 to 7
percent of the program’s revenue. During fiscal year 2000, the
program received an estimated $3.9 million in federal incen-tive
monies.
n State monies—Two sources of state monies provide the next
biggest percentage of program revenues. The State General
Fund contributed an estimated $5.8 million during fiscal year
2000.
In addition, the program receives the State’s share of retained
earnings when a custodial parent applies for public assis-tance
and assigns his or her rights to child support payments
to the State. As long as the family is currently receiving pub-lic
assistance, the program can retain the child support pay-ments
collected on the families’ behalf up to the cumulative
amount of the public assistance grant.1 During fiscal year
1 State and federal laws govern the distribution of child support payments
among families, the State, and the federal government. The State can some-times
also retain child support payments collected on former public assis-tance
cases. However, because the federal government shares in the cost of
the program, the program sends a portion of its retained collections back to
the federal government.
Introduction and Background
8
OFFICE OF THE AUDITOR GENERAL
Table 1
Arizona Department of Economic Security
Child Support Enforcement Program
Statement of Revenues and Expenditures1
Years Ended June 30, 1998, 1999, and 2000
(Unaudited)
1998 1999 2000
(Actual) (Actual) (Estimated)
Revenues:
Federal cost-sharing grant $35,375,989 $40,285,936 $39,805,189
Federal incentives 3,615,621 3,868,175 3,905,591
State’s share of retained earnings 7,019,359 7,623,037 7,780,731
State General Fund appropriations:
Operating 2 1,293,600 2,310,700 4,056,600
Special line items 1,778,000 1,152,100 597,300
General administrative activities 3 1,944,553 1,401,632 1,158,262
County support 2,793,068 2,936,381 2,240,534
Other 4 19,147 666,498 763,862
Total revenues 53,839,337 60,244,459 60,308,069
Expenditures:
Personal services 19,672,740 21,268,774 22,461,806
Employee related 4,654,402 5,011,189 5,151,144
Professional and outside services 7,857,867 9,501,180 7,296,302
County expenditures 11,281,913 12,303,259 11,329,441
Central payment processing 1,340,774 2,205,591 2,713,306
Equipment acquisitions 2,354,629 3,357,508 3,123,339
Lease/rental payments 2,305,477 2,490,278 2,476,289
Other operating 4,136,082 4,291,270 4,747,717
Total expenditures 53,603,884 60,429,049 59,299,344
Reversions to the State General Fund 5 206,795 17,000 2,000
Total expenditures and reversions to the State General Fund 53,810,679 60,446,049 59,299,344
Excess of revenues over (under) expenditures and reversions
to the State General Fund $ 28,658 $ (201,590) 6 $ 1,009,725
1 This statement is presented on a budgetary basis and includes estimates for 2000.
2 In 1999, the Department transferred monies to the Division from other DES appropriations and in 2000 the Legislature
increased appropriations to fund revenue shortfalls and projected increased program costs.
3 The Department allocates support service costs to its various divisions. The State’s share of the support service costs allo-cated
to the Division was funded by the Department's State General Fund appropriation for general administrative activities
and is reported as revenue in this statement. The Division’s total allocated support service costs were $10,103,381,
$11,821,525, and $12,729,000, for 1998, 1999, and estimated for 2000, respectively.
4 Consists primarily of handling and payment processing fees. In 1999, changes in federal mandates consolidated the collec-tion
of non-Title IV payments with the Department. Consequently, the Division’s significant increase in its caseload con-tributed
to a significant increase in the related fees.
5 Includes Division-estimated reversions to the State General Fund. Since lapsing appropriations are not closed until two
years after the end of the fiscal year, total actual reversions are not available at the time of this report.
6 The excess of expenditures over revenues is offset by the Division’s beginning fund balance from prior year revenue
sources, including nonlapsing appropriations.
Source: The State of Arizona Appropriations Report and various reports of the Arizona Department of Economic Security Finan-cial
Management Control System for the years ended June 30, 1998, and 1999; and Division estimates of financial
activity for the year ended June 30, 2000 (actual amounts not available at the time of this report). County support and
expenditures were obtained from the Division’s records for the years ended June 30, 1998, and 1999.
Introduction and Background
9
OFFICE OF THE AUDITOR GENERAL
2000, the program retained approximately $7.8 million in col-lections
from public assistance cases.
n County monies—The six counties providing child support
enforcement services (Cochise, Gila, La Paz, Navajo, Pima,
and Pinal) as well as other county Clerk of the Court and Su-perior
Court contracted entities use local monies to help pay
for their program costs not covered by federal dollars. Dur-ing
fiscal year 2000, these county entities contributed an esti-mated
$2.2 million.
Significant Accomplishments
The program was last reviewed by the Auditor General’s Office
a year ago, and since that time, it has implemented all of the 17
recommendations outlined in the previous report (Auditor Gen-eral
Report No. 99-11). Generally, other initiatives the program
has undertaken to improve the program are discussed in this
report’s main findings. However, some of the notable accom-plishments
not discussed include:
n Centralized Payment Processing—In 1999, the Division
was awarded the Governor’s Spirit of Excellence award for
its efforts to centralize child support payment processing.
State and federal law required that payments for all child
support cases (IV-D and non-IV-D) be centralized no later
than October 1, 1999. The Division worked to establish a pri-vate
contract for this function (awarded to Lockheed Martin,
IMS) and all IV-D support payments were centralized by
1997. The Division then worked with the entities that play a
role in the child support process, such as the Child Support
Coordinating Council, Clerks of the Superior Court, and
Lockheed Martin to facilitate the transition of non-IV-D sup-port
payments to centralized processing. Effective December
1, 1998, all non-IV-D support payments were also centralized.
n Customer Service Improvements—The Division’s Mari-copa
County Customer Service Unit improved its perform-ance
since the Auditor General’s last review in 1999. In its 12-
month audit follow-up report, the Division reported that cus-tomer
hold times have been reduced from an average of 9.49
Introduction and Background
10
OFFICE OF THE AUDITOR GENERAL
minutes to 1.88 minutes (May 1999 to May 2000).1 Further,
the Division has increased the percentage of calls answered
in under five minutes from 11 to 94 percent. These improve-ments
were achieved principally by keeping positions filled
through the Division’s Call Center Staffing Pilot Project,
which has resulted in an average of 42 call center staff avail-able
each day compared to an average of only 31 a year ago.2
n New Enforcement Tool—Arizona was one of the first states
in the country to implement the Financial Institution Data
Match enforcement tool. The program launched three pilot
projects to fine-tune and assess this tool’s effectiveness. This
tool allows financial institutions to provide the program with
access to financial account records. The program uses these
records to determine if any of the accounts are held by delin-quent
noncustodial parents, and establish levies on them in
accordance with statutory requirements. The three pilot pro-grams
resulted in a total of 200 levies being issued. From
these levies, 142 bank accounts were frozen, resulting in the
collection of over $358,000 in past-due child support. The Fi-nancial
Institution Data Match tool is now being used by all
child support enforcement offices, and as of July 21, 2000, an
additional 50 levies have been issued and $92,000 in past-due
child support has been seized and collected.
n Cost-Effectiveness—Arizona has greatly improved its cost-effectiveness
measure over the past several years. Cost-effectiveness
is a federal incentive measure that compares the
dollars collected to the dollars spent for the program. Under
the newly defined federal measure, the program reports that
it achieved a cost-effectiveness rate of $3.72 for fiscal year
1 Information on customer hold times is taken from the Division's auto-mated
phone system. The system produces management reports that pro-vide
information on such items as the number of calls received per day, the
number of customer service agents available to answer the phones, and the
average hold times.
2 Under the one-year pilot project (December 1999 to 2000), the Division is
hiring 20 call center staff instead of staff with paralegal degrees (its stan-dard
practice). Call center staff receive the same extensive child support
and customer service tra ining as the paralegal staff.
Introduction and Background
11
OFFICE OF THE AUDITOR GENERAL
2000. This is almost a $2.00 increase from its 1995 rate of $1.77
using the current definition.
Audit Scope
Laws 1996, Chapter 290, defined the scope of this performance
audit of the child support enforcement program to include five
areas: customer service, privatization efforts, debt calculation,
Arizona Tracking and Location Automated System (ATLAS),
and overall effectiveness. An initial report issued by the Office of
the Auditor General in July 1999 (Report No. 99-11), focused on
the first three areas. In addition, the report also included infor-mation
on the program’s funding and appeals process. This re-port
focuses on the remaining two areas: overall effectiveness
and ATLAS, the statewide automated system. This report pre-sents
findings and recommendations in five areas:
n The program’s improvement in collecting more child support
dollars but continued inability to collect from a significant
percentage of cases.
n The program’s limited performance in establishing paterni-ties,
and the steps needed to improve its performance.
n The program’s stable but modest performance in establishing
legal obligations to pay child support, and the additional ap-proaches
needed to improve its performance.
n The program’s current collection enforcement strategies and
the potential tactics the program should consider for getting
more noncustodial parents to pay.
n The program’s success in establishing a statewide automated
case management system.
Methodology
A variety of methods were used to assess the program’s effec-tiveness
and ATLAS operations.
Introduction and Background
12
OFFICE OF THE AUDITOR GENERAL
Methods used to assess effectiveness—To assess the program’s
overall effectiveness, auditors worked with the program to ob-tain
a data extract from its statewide case management system
(ATLAS) of all open cases as of July 1, 1996 through June 30,
1999. The data extract included numerous types of information
on each case, such as critical or milestone dates (i.e., paternity
establishment date and support order establishment date); the
types and amounts of child support owed and collected; and
custodial, noncustodial, and child demographics. Auditors used
the information from the data extract to quantify and describe
the program’s performance over fiscal years 1997 to 1999 in its
major functional areas—paternity establishment, support order
establishment, and enforcement and collections. In addition,
auditors used the information to develop statistical models that
could help determine which variables impact the program’s
success in these major functional areas. The variables used in the
statistical models included items such as whether the custodial
parent received public assistance, whether the case needed locate
services, and case participants’ demographic information.
Methods used to review automated system—Several steps were
also taken to review the program’s statewide automated system,
ATLAS. ATLAS is used to record case participants’ demographic
information as well as all actions taken on each case. Prior to the
program running the data extract mentioned above, auditors
reviewed a sample of 70 cases from 8 regional offices to assess
the completeness and accuracy of the system’s data.1 Cases were
selected randomly from each office’s file room. Auditors verified
that all cases were documented on the system and assessed the
accuracy of critical information, such as the type of and date
when paternity was established, as well as the type and amount
of the child support obligations.
In addition, auditors conducted numerous interviews with the
staff at these offices to assess the management controls used to
ensure data is accurately entered and updated, and to review the
program’s data reliability improvement efforts. Auditors also
reviewed reports produced by federal auditors and other entities
1 Auditors selected offices from the following counties to ensure that each
different type of program administration (Division, County Attorney, and
private contractor) was reviewed: Gila, Graham/Greenlee, Maricopa,
Pima, a nd Yavapai.
Introduction and Background
13
OFFICE OF THE AUDITOR GENERAL
regarding the reliability of ATLAS data and the quality of the
program’s management controls. Auditors found the program’s
data to be generally reliable and accurate. Only a few exceptions
were noted, such as incorrect case-open dates and out-of-wedlock
indicator codes. These problems primarily impacted
older cases, those cases opened prior to fiscal year 1997 and
when the program converted to ATLAS, but did not prevent
auditors from using the data to evaluate the program’s perform-ance.
Reliable national data lacking—While Arizona’s data was de-termined
to be generally reliable, auditors were unable in most
instances to compare Arizona’s performance to other individual
states or national averages. Although each state is required to
establish a statewide automated case management system and
use this system to maintain and report specific pieces of data to
the federal government, not all states have established these
systems or had their systems certified by the federal government,
in contrast to Arizona. Therefore, auditors determined, after
reviewing literature regarding the status of other states’ progress
toward establishing reliable/certified systems and reviewing the
data compiled in national reports, that the national data con-tained
some significant errors that render it unreliable. The one
exception is that the nationally reported financial information is
generally considered reliable since it is reviewed through other
means, such as state financial audits.
The audit was conducted in accordance with government audit-ing
standards.
The Auditor General and staff express appreciation to the Direc-tor
and Deputy Director of the Arizona Department of Economic
Security; the Assistant Director, Deputy Assistant Director and
staff of the Division of Child Support Enforcement; and the child
support enforcement staff from the offices of the Attorney Gen-eral,
county attorneys, and private contractor for their coopera-tion
and assistance during the audit.
14
OFFICE OF THE AUDITOR GENERAL
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15
OFFICE OF THE AUDITOR GENERAL
FINDING I PROGRAM EFFECTIVENESS
IMPROVING, BUT ADDITIONAL
ENHANCEMENTS NEEDED
The program has significantly improved its effectiveness in re-cent
years. It is collecting more money than ever before, for more
cases. However, 40 percent of the program’s cases that have
support orders still receive no child support payments. To con-tinue
to enhance its effectiveness, the program will need further
improvement in establishing paternities and support orders, and
enforcing and collecting on support orders.
Program Collecting More
Dollars for More Cases
The program has improved its performance in collecting child
support. Specifically, it has increased the amount of child sup-port
collected annually and the percentage of cases regularly
receiving child support payments.
Program has improved collections performance in several ar-eas—
Over the past several years, the program has improved its
collections performance in three areas:
n Increased total annual distributed collections—Between
fiscal years 1994 and 1999, the program has doubled its total
annual distributed collections.1 In fiscal year 1999, the pro-gram
collected and distributed $184 million, an increase of
$92 million from fiscal year 1994. Total collections are com-prised
of monies paid for current-year and past-due child
support, and spousal support.
1 Distributed collections refer to payments applied to child support obliga-tions
that have been disbursed to the family, retained by the State, or for-warded
to another state.
Finding I
16
OFFICE OF THE AUDITOR GENERAL
Most of the money being collected is for current-year child
support. For example, in fiscal years 1997 through 1999, cur-rent-
year child support accounted for 84 to 86 percent of total
annual distributed collections. Figure 4 presents the total dol-lar
amount collected for fiscal years 1994 through 1999.
The program's improvement in total collections has far ex-ceeded
national performance. According to the 23rd Annual
Report to Congress (2000), national child support collections
increased by 80 percent since 1992; whereas Arizona's collec-tions
increased 211 percent during that same time period.
Additionally, for four of the past five years (1995 through
1999) Arizona has ranked in the top five states nationally for
increased collections.
n Increased percentage of regular payers—Since 1992, the
program has increased the percentage of cases in its total
caseload receiving regular child support payments. This per-
Figure 4
Arizona Department of Economic Security
Child Support Enforcement Program
Total Annual Distributed Collections
Years Ended June 30, 1994 through 1999
(Unaudited)
$91.8
$107.0
$127.6
$143.7
$159.0
$183.6
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Millions
1994 1995 1996 1997 1998 1999
Source: U.S. Department of Health and Human Services, Office of Child Support Enforcement Quarterly Report of
Collections OCSE-34; and Auditor General staff analysis of automated data for cases open at any time be-tween
July 1, 1996, and June 30, 1999, provided by the Arizona Department of Economic Security, Division of
Child Support Enforcement.
Finding I
17
OFFICE OF THE AUDITOR GENERAL
formance measure counts the number of cases receiving
regular support and divides that number by the total number
of program cases, including those without support orders. In
a 1992 performance audit of the program (Auditor General
Report No. 92-7), it was reported that only 3 percent of the
program's cases were receiving regular child support pay-ments.
However, in fiscal year 1999, approximately 11 per-cent
of all cases, or 24 percent of the program's cases with
support orders established, were receiving between 90 to 100
percent of the current-year child support due them. Current-year
child support is the amount of child support ordered to
be paid in the current year and does not include amounts
that were due in prior years.
n Increased percentage of caseload receiving child sup-port—
The program has annually increased the percentage of
its total caseload receiving any child support. This measure
counts the total number of cases receiving at least one pay-ment
during the year, regardless of the amount paid, and di-vides
that number by the total number of program cases.
Over fiscal years 1997 through 1999, the program has in-creased
the percentage of cases receiving support from 20 to
27 percent. Additionally, this percentage matched the na-tional
average in 1998, the most current national figures
available. Further, of the program cases with support orders
in place, 58 percent received at least some support during fis-cal
year 1999.
Many Families Still
Receive No Child Support
Despite the program's improved performance, many families
still receive no child support. Specifically, there are a significant
percentage of cases in which the program fails to obtain any
collections. As a result, the program may fail to maximize federal
incentive dollars that could be used to help support the pro-gram’s
cost.
Many families receive no child support—Although the program
has increased the proportion of its caseload receiving child sup-port
payments, many families are still not receiving payments.
Specifically, for each of fiscal years 1997 to 1999, about 40 percent
The percentage of cases
receiving child support
has increased each year.
Finding I
18
OFFICE OF THE AUDITOR GENERAL
Figure 5
Arizona Department of Economic Security
Child Support Enforcement Program
Comparison of Growth Rates for
Total Arrears and Distributed Collections Balances
for Years 1994 through 1999
(Unaudited)
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
$1,500
$1,600
Millions
1994 1995 1996 1997 1998 1999
Total arrears balance Total annual distributed collections
Source: Auditor General staff analysis of automated data for cases open at any time between July 1, 1996, and June 30,
1999, provided by the Arizona Department of Economic Security, Division of Child Support Enforcement;
and the 19th through 21st Annual Report to Congress prepared by the U.S. Department of Health and Human
Services, Office of Child Support Enforcement.
of the cases with support orders for current-year support re-ceived
no child support payments. During fiscal year 1999 these
families, approximately 46,000, did not receive the $112 million
in support due to them.
Because about 40 percent of Arizona's support-ordered cases are
not paying, the program's outstanding balance is growing at a
faster rate than its increase in collections (see Figure 5). At the
end of fiscal year 1999, the program's uncollected child support
balance was $1.5 billion. This outstanding balance is increasing
by approximately 16 percent annually. Further, according to the
most recent figures published by the federal Office of Child Sup-port
Enforcement, Arizona has one of the largest past-due bal-ances
of all the 54 states and jurisdictions. Arizona's balance is
exceeded by only seven other larger states—California, Michi-
Finding I
19
OFFICE OF THE AUDITOR GENERAL
gan, New Jersey, New York, Ohio, Pennsylvania, and Texas.
Furthermore, Arizona's uncollected past-due child support ac-counts
for 3.2 percent of the national total and exceeds the State's
share of the national caseload, which is only 1.7 percent.
Program’s collection performance may fail to maximize federal
incentive dollars—Despite the program’s improved collection
performance, the program may fail to maximize federal incen-tive
monies because its performance is below the maximum
requirement. A new federal incentive program will be com-pletely
implemented by federal fiscal year 2002. To receive all
available federal incentive monies for the collection area, the
program must meet the following performance levels.1
n Current-year support collected—The program must collect
80 percent of the current-year support due. The program
may be eligible to receive a reduced amount of incentive
monies if its performance falls between 40 and 80 percent. In
fiscal year 1999, the program collected only 45 percent of the
current-year support due. The program reports that its per-formance
in this area is the same for fiscal year 2000. The na-tional
average in 1998 for this performance measure was 51
percent.
n Percentage of cases with a past-due collection—The
program must collect at least one payment for past due sup-port
from 80 percent of the cases owing past-due support.
The program may be eligible to receive a reduced amount of
monies if its performance falls between 40 and 80 percent. In
fiscal year 1999, the program received a payment on 51 per-cent
of its cases, and the program reports that it also received
a payment on 51 percent of its cases in fiscal year 2000. The
1998 national average for this measure was 39 percent.
1 The federal incentive collections measures also evaluate th e program’s
cost-effectiveness. However, auditors’ data extract did not include the nec-essary
information to calculate this measure.
Finding I
20
OFFICE OF THE AUDITOR GENERAL
Increased Effectiveness Depends on
Improvements in Three Key Areas
For the program to continue increasing its effectiveness, it will
need to improve its performance in each of the three key proc-esses:
establishing paternity, establishing support orders, and
enforcing and collecting on support orders. The following three
report Findings (see Findings II, III, and IV), address the pro-gram’s
performance and specific improvements that it can make
to enhance the its performance.
21
OFFICE OF THE AUDITOR GENERAL
FINDING II PROGRAM NEEDS TO
IMPROVE ITS PATERNITY
ESTABLISHMENT PERFORMANCE
The program needs to enhance its paternity establishment per-formance.
Even though paternity establishment is a key initial
step in the child support enforcement process, the program’s
performance in establishing paternities has been limited. While
several factors contribute to the program’s performance, such as
the inability to locate the legally responsible father, the low rate
at which paternities are established has consequences for the
program. While the program has already undertaken several
initiatives designed to increase its performance in the paternity
establishment area, it should explore and implement additional
strategies that will help improve its performance, such as seeking
additional administrative authority.
Limited Success
in Establishing Paternities
Although establishing paternity, which is identifying a child’s
legal father, is a critical first step in the child support process for
many cases, the program has had limited success in establishing
paternities. Paternity must be legally determined before a child
support order is issued and child support payments can be
collected. However, relatively few paternities have been estab-lished
compared to the number of paternities needed. Further,
when paternities are established, it has typically taken the pro-gram
several months or years to do so. Consequently, many
cases remain in this initial function, year after year.
Paternity establishment critical component of the child support
process—Before a father can be ordered to support a child born
out of wedlock, paternity must be determined. Paternity estab-lishment
occurs through one of several methods. It can be estab-lished
administratively through Arizona’s Hospital Paternity
Paternity must be
established before a child
support order is issued.
Finding II
22
OFFICE OF THE AUDITOR GENERAL
Program. This method uses hospital and birthing center staff to
collect information from new parents upon the birth of a child
and obtain a signed paternity acknowledgement form that is
then submitted to Arizona’s Department of Health Services—
Office of Vital Records. The program establishes paternity by
obtaining voluntary acknowledgements or genetic test results
from cooperative custodial parents and alleged fathers. In addi-tion,
cases may be referred to the courts if the custodial parent or
alleged father do not cooperate with the program.
Program establishes relatively few paternities—Although more
than 100,000 children in the program’s caseload need paternity
established in any year, the program has had modest success in
establishing paternities. The performance measure in the pater-nity
area is reported by child, while most other child support
performance measures are reported by case.1 However, for each
of the past three fiscal years, the program has established pater-nity
for fewer than 10 percent of the children needing it. Figure 6
(see page 23) shows that between fiscal years 1997 and 1999, the
annual number of paternities established increased from 10,829
to 12,042, or from 8.1 percent to 8.8 percent of those children
needing paternity established.
Paternity establishment is often a lengthy process—When the
program did establish paternity, it often took several months or
even years. For example, the median time to establish paternity
was 1.5 years from the date of application for the children who
had paternity established during fiscal years 1997 to 1999. Fur-thermore,
as illustrated in Figure 7 (see page 23) more than half
(59 percent) of the paternities took one or more years to estab-lish.
2 Figure 7 (see page 23), also shows that 32 percent of the
paternities took more than three years to establish.
1 A case typically consists of one custodial parent, one noncustodial parent,
and one or more child(ren).
2 Paternities established through the Hospital Paternity Program were
excluded from this analysis. In addition, due to inconsistent date informa-tion,
795 paternities established between fiscal years 1997 and 1999 were
also excluded.
The program has annu-ally
established paternity
for fewer than 10 percent
of the children needing it.
Finding II
23
OFFICE OF THE AUDITOR GENERAL
Figure 6
Arizona Department of Economic Security
Child Support Enforcement Program
Paternities Needed and Established1
Years Ended June 30, 1997, 1998, and 1999
134,508
10,829
144,471
10,449
136,672
12,042
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
1997 1998 1999
Total number of children needing paternity established as of the first day of the fiscal year
Number of children with paternity established during the fiscal year
1 A case typically consists of one custodial parent, one noncustodial parent, and their children. More than one child per
case may need paternity establishment services; therefore, paternities are counted on a child basis. Most other statistics
are reported on a case basis. Paternities needed for each year are calculated by counting the total number of children
who still need paternity established as of the first day of the fi scal year.
Source: Auditor General staff analysis of automated data for cases open at any time between July 1, 1996, and June 30,
1999, provided by the Arizona Department of Economic Security, Division of Child Support Enforcement.
Figure 7
Arizona Department of Economic Security
Child Support Enforcement Program
Timeliness in Establishing Paternities
Years Ended June 30, 1997, 1998, and 1999
Source: Auditor General staff analysis of automated data for cases open at any time between July 1, 1996, and June 30,
1999, provided by the Arizona Department of Economic Security, Division of Child Support Enforcement.
More than 3 years
(32%)
Less than 3 months
(11%)
Between 3 and 6
months (13%)
Between 6 and 12
Between 2 and 3 years months (17%)
(10%)
Between 1 and 2 years
(17%)
Finding II
24
OFFICE OF THE AUDITOR GENERAL
Many cases remain in the paternity function—As a result of the
program’s limited success in establishing paternities, many cases
remain in the paternity establishment area. At the end of fiscal
year 1999, there were 122,327 children who still needed paternity
services. Time is of the essence in paternity establishment. Re-search
has shown that when there are significant case-processing
time lags, the fathers have often moved, and caseworkers are
forced to repeat work to locate them in a constant “catch-up”
effort.1 However, many of these children have been in the pater-nity
function for several years. For example, 54 percent of the
program’s paternity cases (51,769) have been in the paternity
function for more than three years. Some of them have been in
the function for nearly ten years, dating back to 1990.
Paternity Establishment
Performance May Fail
to Maximize Federal
Incentive Dollars
If paternity establishment performance does not improve, the
program may fail to maximize its federal incentive monies. The
federal government is phasing in a new incentive program. To
receive all available federal incentive monies for the paternity
establishment area, the federal government requires that at least
80 percent of the total children in the program’s IV-D caseload
that were born out of wedlock have paternity established. The
program may be eligible to receive a reduced amount of incen-tive
monies if its performance falls between 50 and 80 percent.
This measure is broader than just the number and percentage of
paternities established each year (see Figure 6, page 23) because
it looks at the entire caseload and not just the cases in the pro-gram’s
paternity establishment area. For federal fiscal year 2000,
the program reported its paternity performance at 69 percent,
making it eligible for a reduced amount of incentive monies.
Arizona received an estimated $3.9 million in federal incentive
dollars for the child support program in fiscal year 2000.
1 Turetsky, Vicki. Pointing the Finger at Moms: Child Support Cooperation
Provisions in the Conference Welfare Bill. Center for Law and Social Policy,
revised January 11, 1996.
Time is of the essence in
establishing paternity.
Finding II
25
OFFICE OF THE AUDITOR GENERAL
Some Case Characteristics
Impact Performance
Certain caseload characteristics pose barriers for the program
and impact its performance. While some of these characteristics
are common to all state child support programs, others are
unique to Arizona’s program.
n Characteristics that impact all state child support pro-grams—
There are some case features that pose problems for
child support programs across the nation. One common
problem is locating an alleged father so that he can be noti-fied
of the program’s intent to begin paternity establishment
actions. It is often difficult to obtain current addresses for al-leged
fathers because they frequently move around and do
not have permanent jobs. In Arizona, at the beginning of fis-cal
year 2000, an estimated 60,000 (63 percent) of its paternity
cases needed locate services.
Another common problem facing paternity caseworkers is a
lack of information about the alleged father. Often the mother
does not know the alleged father’s name, date of birth, social
security number, address, or employer. Yet, many of the pro-gram’s
automated locate searches rely on this information. At
the beginning of fiscal year 2000, 49,561 (52 percent) of the
cases still needing paternity services were missing social se-curity
numbers. In addition, several thousand of these cases
were also missing the name of the alleged father.
Program personnel also indicated that custodial parents are
sometimes reluctant to provide information. For example, the
mother may not want to have any contact with her
child(ren)’s father or may fear that any unreported cash or in-kind
support from the father will stop if he is required to es-tablish
paternity.
n Characteristics that impact Arizona’s child support
program—Some case features pose particular problems for
Arizona’s program. Arizona has a comparatively high out of
wedlock birth rate. Specifically, approximately 38 percent of
its annual births are to unwed mothers, as compared to 32
A common problem is
lack of information about
the alleged father.
Finding II
26
OFFICE OF THE AUDITOR GENERAL
percent nationally.1 Only four states have higher out of wed-lock
birth rates than Arizona.2 Therefore, more cases are
likely to enter Arizona’s program at the beginning stages and
need the full range of services.
Additionally, Arizona’s large tracts of reservations and prox-imity
to Mexico pose jurisdictional barriers to establishing pa-ternity.
Specifically, to establish paternity through the judicial
process, Arizona courts must have jurisdiction over the indi-vidual,
and they do not have this for individuals living and
working on a reservation or in Mexico. Using program data,
auditors estimated that at least 7 percent of the program’s pa-ternity
cases had alleged fathers living and working on a
reservation.3
Finally, high caseloads may be contributing to the program’s
limited performance in paternity establishment. Although
the size of caseworkers’ caseloads have decreased considera-bly
since the previous report in 1992 (Auditor General Report
No. 92-7), there continues to be a wide range in caseload size
among caseworkers. Analysis of caseworker caseloads at the
end of fiscal year 1999 found that while the median number
1 U.S. Department of Commerce. U.S. Census Bureau. Economic and
Statistics Administration. Data User Services Division. Statistical Abstract of
the United States, National Data Book, 1999. Based on registered births to
unmarried women in 1997.
2 States with higher out of wedlock birth rates in 1997 (most recent figures
available) were the District of Columbia (6 3.6 percent), Louisiana (43.9 per-cent),
Mississippi (45.5 percent), and New Mexico (43.5 percent).
3 Program efforts to address the jurisdictional issue include working with
the various Arizona tribes to assist them with their own child support en-forcement
programs. Additionally, because determining jurisdiction is a
complex issue, the Attorney General’s Office developed a criteria matrix
that it uses to make a final determination on whether or not a case falls
within the program’s jurisdiction.
Arizona courts do not
have jurisdiction over
some individuals on
reservations.
Finding II
27
OFFICE OF THE AUDITOR GENERAL
Item 1: Maine’s Administrative Process for
Establishing Pate rnity
Designed to permit easy transfer of default and contested cases to the
courts, Maine’s process emphasizes due process. It begins by serving
the alleged father with a notice of the program’s intent to establish
paternity and offering him the opportunity to deny paternity, ac-knowledge
paternity, or request genetic testing. If paternity is ac-knowledged
voluntarily or through genetic testing, the program will
administratively establish a support order. These procedures are
generally carried out by child support agents without attorneys.
Contested and default cases (i.e., those in which the alleged father fails
to respond or appear) are transferred to court without the necessity of
additional service of process.
of cases was 690, they ranged from 179 to 4,023 per paternity
caseworker.1 Consequently, some caseworkers continue to be
overwhelmed and have difficulty effectively managing their
caseloads. One paternity caseworker with a caseload of more
than 2,000 cases indicated that she could not effectively man-age
her cases and another indicated that her office needed
help in order to “touch” all their cases.
Program Should Continue
Its Efforts to Improve Paternity
Establishment Performance
Although faced with some unique challenges, the program
should continue to explore and implement strategies to over-come
these barriers and enhance its paternity performance.
n Explore expanding administrative authority to establish
paternity—The program should explore expanding its ad-ministrative
authority to establish paternity. Currently, the
only completely administrative procedure available to estab-lish
paternity is through the Hospital Paternity Program.
Administrative authority would allow caseworkers to estab-
1 Because program offices employ various strategies for case processing, a
caseworker may handle only one specific type of case (paternity) or may
handle multiple types (paternity and support order establishment). There-fore,
paternity caseworkers were identified as those individuals whose
caseloads consisted of at least 80 percent paternity cases.
Finding II
28
OFFICE OF THE AUDITOR GENERAL
lish paternity without attorney or court intervention. Maine
uses administrative authority to establish paternity (see Item
1, page 27, for a description). As a result of this process,
Maine has been able to reduce the number of cases needing
paternity establishment to 5 percent of its total caseload. Ad-ditionally,
Maine is closer to its goal of establishing paternity
in all cases within one year of the child’s birth, or location of
the alleged father.
Additional administrative authority could help improve the
program’s performance and allow it to redirect some of its
legal staff to other tasks. However, to ensure additional au-thority
benefits all parties involved, the program should ex-plore
the feasibility of making this change with its many
stakeholders.
n Continue to identify and close cases with insufficient
information to proceed—Another important step the pro-gram
should take is to identify and close cases with insuffi-cient
information to proceed. Closing these cases will reduce
the program’s caseload, allowing paternity caseworkers to
focus their efforts on workable cases. In fiscal year 2000, the
federal government established additional closure guidelines
that allow child support programs to close cases that are
missing data needed to locate the noncustodial parent. For
example, when a case is missing the alleged father’s address
and social security number, the program may now close the
case after one year of regular and diligent effort to locate the
alleged father. At the beginning of fiscal year 2000, the pro-gram
had more than 49,000 cases needing paternity services
that were missing the alleged father’s social security number.
Therefore, at a minimum, the program should evaluate these
cases for potential closure.1
The program recently developed an automated closure pro-cedure.
Its automated system will now assess cases against
federal closure criteria. Depending on the criteria met, the
system will automatically initiate a notification to the custo-dial
parent that their case will be closed unless additional in-
1 The case can be reopened if the custodial parent can subsequently provide
the program with new information that could lead to paternity establish-ment.
Federal guidelines allow
cases to be closed when
there is insufficient
information to proceed.
Finding II
29
OFFICE OF THE AUDITOR GENERAL
formation is provided to assist the program in locating the al-leged
father. Otherwise, the system will generate a worklist
item notifying the caseworker that a specific action is needed
to proceed with case closure.
n Examine caseload distribution—Because there is a wide
range of variation among caseworker caseload size, the pro-gram
should reassess how it distributes cases. Currently, a
variety of approaches are used. For example, offices fre-quently
assign cases based on the first letter of the custodial
parent’s last name. Therefore, one caseworker may handle all
cases from A to L while another has M through Z. In addi-tion,
some offices assign cases based on the individual case-worker’s
experience level. As a result, supervisors should
routinely review their caseworkers’ caseloads and make the
necessary adjustments to ensure, to the maximum extent
possible, that caseloads are equitable and manageable.
n Increase use of specialized paternity establishment
caseworkers—The program may need to temporarily ex-pand
the use of contract caseworkers. The program reports to
have successfully used contract paralegal staff in Maricopa
County to help increase the number of paternities established
and close cases where the custodial parent no longer wants
services. The program hired 11 temporary paralegal staff, at
an annual cost of $136,408 during fiscal year 1999, and con-tinues
to use these temporary staff.
Similarly, the program could consider creating a team of pa-ternity
investigators for difficult paternity cases. North Caro-lina
created such a team and was able to obtain names and
identifying data in 60 percent of the cases referred to the
team. Colorado and Nevada also use similar specialized
teams to investigate paternity cases or locate alleged fathers.
n Increase educational outreach activities—The program
should continue to expand its outreach efforts for the Hospi-tal
Paternity Program (HPP). The HPP is a statewide pro-gram
available in all hospitals and birthing facilities. Its pur-pose
is to encourage parents of children born out of wedlock
to voluntarily acknowledge (establish) paternity at the time
of the child’s birth. Currently, paternity acknowledgements
may be executed at hospitals, birthing centers, child support
Finding II
30
OFFICE OF THE AUDITOR GENERAL
offices, family assistance offices, and the vital records office.
Parents may also request a paternity acknowledgement form
through the mail. Yet, in a U.S. Department of Health and
Human Services report, it was recommended that states also
look at expanding their voluntary paternity acknowledge-ment
services through additional sites such as Head Start
agencies, Women, Infants, and Children (WIC) centers, and
high schools.1
n Explore additional automation changes—The program
already has many automated features designed to obtain in-formation
on its paternity cases. For example, the program’s
automated system—ATLAS—searches information from
other systems throughout the State and country to obtain in-formation
to locate alleged fathers.
The program should consider expanding its automated
search processes to include searches of neighboring states’
birth records for paternity acknowledgements filed in other
states. Oregon located 200 paternity acknowledgements by
searching Washington’s vital statistics records. Additionally,
the program could explore providing its caseworkers with
direct automated access to Arizona’s birth records so the
caseworkers could conduct their own searches and thus re-duce
the number of cases incorrectly coded as needing pater-nity
services at intake.
1 U.S. Department of Health and Human Services. Office of the Inspector
General. Paternity Establishment: Use of Alternative Sites for Voluntary Pater-nity
Acknowledgement. July 1999.
Finding II
31
OFFICE OF THE AUDITOR GENERAL
Recommendations
1. The program, in conjunction with its stakeholders, should
explore expanding its administrative authority to establish
paternity.
2. The program should close those paternity cases meeting
federal closure criteria to allow paternity caseworkers to fo-cus
their efforts on remaining cases.
3. The program should develop a procedure requiring supervi-sors
to routinely review caseworker caseloads and redistrib-ute
cases as needed to ensure caseloads are manageable.
4. The program should consider temporarily expanding its use
of contract paternity caseworkers statewide to increase the
number of paternities established.
5. The program should explore the possibility of establishing a
specialized unit of paternity caseworkers to resolve difficult
paternity cases.
6. The program should seek to expand its use of alternative
sites for executing voluntary paternity acknowledgements.
7. The program should continue to expand its use of automa-tion
by exploring the feasibility of:
a. Conducting periodic matches of its paternity caseload
with neighboring states’ birth records to uncover pater-nity
acknowledgements filed in other states; and
b. Providing caseworkers with direct automated access to
Arizona’s birth records so they can conduct their own
birth record searches.
32
OFFICE OF THE AUDITOR GENERAL
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33
OFFICE OF THE AUDITOR GENERAL
FINDING III PROGRAM NEEDS TO CONTINUE
TO IMPROVE ITS PERFORMANCE
IN ESTABLISHING CHILD
SUPPORT ORDERS
The program needs to improve both the proportion of cases
receiving support orders and the timeliness with which support
orders are established. Similar to the paternity establishment
area, the program establishes support orders for only a relatively
small proportion of the cases that need them and it often takes a
long time to do so. Since child support cannot be collected until a
support order is established, many custodial families are not
receiving child support payments. However, because the pro-gram’s
performance is improving, it should be eligible to receive
some federal incentive monies. Nevertheless, the program
should take steps to continue to improve its performance, includ-ing
exploring seeking additional administrative authority to
establish orders.
Support Order Establishment
Area Has Two Significant Areas
for Improvement
In the support order establishment functional area, the pro-gram’s
goal is to obtain a court order that sets forth the monthly
dollar amount the noncustodial parent must pay for child sup-port.
However, this functional area still has two significant prob-lems
—only a small percentage of cases receive orders each year,
and the process of obtaining an order is often lengthy. As a re-sult,
many cases remain in this functional area.
Support order establishment occurs after paternity—If paternity
services are not needed or once the program has established
paternity, the program establishes a child support order. Estab-lishing
an order involves determining how much money a non-custodial
parent must contribute monthly to help pay for the cost
of raising his or her child(ren). Support order dollar amounts are
based on the State’s child support guidelines which take into
Finding III
34
OFFICE OF THE AUDITOR GENERAL
account such things as the gross income of both the custodial and
noncustodial parents as well as the number and ages of their
children. Program caseworkers request the custodial and non-custodial
parents provide income documentation, such as tax
returns, and use this information to help calculate how much
money each parent should contribute based on their total in-come.
Once the custodial and noncustodial parents agree to the
calculation, the program must obtain a court order that sets forth
the child support dollar amount. If the parties do not agree to the
dollar amount calculated by the program or do not want to work
with the program, the case will be handled through the courts
using the same information and guidelines.
Program establishes relatively small proportion of orders each
year—The program’s ability to collect child support is held up
because it obtains support orders for only a small percentage of
the cases that need them each year. For example, during fiscal
year 1999, the program established support orders for about
9,200 (or about 16 percent) of the approximately 58,000 cases that
needed them (see Figure 8, page 35). However, the number of
cases needing support orders between fiscal years 1997 to 1999
decreased by 37 percent from about 92,000 to 58,000. This de-crease
is the result of the program establishing support orders
and closing cases in accordance with federal criteria. For exam-ple,
the program can close a case if it is unable to locate the non-custodial
parent, and it has tried to locate them on at least a quar-terly
basis for three years.
Support order establishment is often a lengthy process—Also
problematic is the length of time the program is taking to estab-lish
some support orders. During fiscal years 1997 to 1999, the
median time to establish a support order was about 16 months.
As illustrated in Figure 9 (see page 35), 29 percent of the child
support orders took over three years to establish.1
1 Due to inconsistent date information, 1,273 cases with support orders
established between fiscal years 1997 and 1999 were excluded from this
analysis.
The program established
support orders for 16
percent of cases needing
them.
Finding III
35
OFFICE OF THE AUDITOR GENERAL
Figure 8
Arizona Department of Economic Security
Child Support Enforcement Program
Support Orders Needed and Established1
Years Ended June 30, 1997, 1998, and 1999
91,991
8,465
70,539
9,453
58,155
9,168
0
20,000
40,000
60,000
80,000
100,000
1997 1998 1999
Total number of cases needing support orders established as of the first day of the fiscal year
Number of cases with child support orders established during the fiscal year
1 Support orders needed for each fiscal year are calculated by counting the number of cases that still need support
orders established as of the first day of the fiscal year.
Source: Auditor General staff analysis of automated data for cases open at any time between July 1, 1996, and June
30, 1999, provided by the Arizona Department of Economic Security, Division of Child Support Enforcement.
Figure 9
Arizona Department of Economic Security
Child Support Enforcement Program
Timeliness in Establishing Support Orders
Years Ended June 30, 1997, 1998, and 1999
Source: Auditor General staff analysis of automated data for cases open at any time between July 1, 1996, and June
30, 1999, provided by the Arizona Department of Economic Security, Division of Child Support Enforce-ment.
More than 3 years
(29%)
Less than 3 months
(7%) Between 3 and 6 months
(14%)
Between 6 and 12 months
(21%)
Between 2 and 3 years
(11%)
Between 1 and 2 years
(18%)
Finding III
36
OFFICE OF THE AUDITOR GENERAL
Cases remain in support order establishment function—Because
the program is establishing support orders for fewer than 20
percent of the cases that need them, many cases continue to re-main
in this functional area. At the end of fiscal year 1999, the
program had 43,378 cases that needed support orders estab-lished.
Because the program is typically taking more than a year
to establish support orders, many of these cases have been in
need of support order services for a long time. Specifically, of the
cases in the support order establishment area at the end of fiscal
year 1999, 22 percent have been in the establishment function for
between 2 and 3 years and 7 percent have been in this function
for more than 3 years. Some of these cases have been part of the
program’s establishment caseload for ten years. For each year the
program does not establish a support order, the custodial family
does not receive about $2,400.1
The program’s ability to establish support orders is impacted by
problems similar to those that delay the paternity establishment
process. For example, it is estimated that the whereabouts of the
noncustodial parent are unknown for at least one-third of estab-lishment
cases. In addition, the program may not have jurisdic-tion
over some of the establishment cases because the noncusto-dial
parent may live and work on a reservation or in Mexico.
Although paternity has been established on these cases, some
may still lack complete case information as a result of paternity
being established through the default process. Using this process,
a judge may issue a paternity order in the absence of the alleged
father when the alleged father willfully fails to appear at the
paternity hearing. Consequently, no opportunity is presented to
update or complete case information on the noncustodial parent.
For example, 15 percent of the cases lacked important informa-tion,
such as a social security number, on the noncustodial par-ent.
Program Increasing Percentage
of Support-Ordered Cases
Despite a small percentage of cases receiving support orders, the
program’s performance as measured under the federal incentive
1 This represents the median child support order figure for the program’s
caseloa d.
Many cases have been
waiting over 2 years for
support orders.
Finding III
37
OFFICE OF THE AUDITOR GENERAL
program is improving. Specifically, the program has significantly
increased the overall number and percent of cases with child
support orders. A 1992 Auditor General report (Report No. 92-7)
noted that only 25 percent of the program’s cases had a child
support order in place. However, as shown in Figure 10, the
program has increased both the number and percentage of cases
with support orders. Specifically, at the end of fiscal year 1999,
126,411 (or 47 percent) of the program’s cases had support or-ders.
Under the new federal incentive program, to receive at least
some incentive monies for the support order establishment area,
50 percent of the program’s cases must have support orders. The
Division reports that it met this minimum requirement in federal
fiscal year 2000. However, the program still has room for im-provement
because to receive the maximum incentive monies
available, it must obtain orders for at least 80 percent of its cases.
The proportion of cases with support orders is improving and
should continue to improve for two reasons. First, the program is
Figure 10
Arizona Department of Economic Security
Child Support Enforcement Program
Percentage of Total Caseload with Support Orders
Years Ended June 30, 1997, 1998, and 1999
37%
41% 47%
0%
20%
40%
60%
80%
100%
1997 1998 1999
Support order data 1997 1998 1999
Number of cases with support orders 110,185 118,515 126,411
Total number of cases 297,023 285,667 268,408
Source: Auditor General staff analysis of automated data for cases open at any time between July 1, 1996,
and June 30, 1999, provided by the Arizona Department of Economic Security, Division of Child
Support Enforcement.
Finding III
38
OFFICE OF THE AUDITOR GENERAL
increasing the number of support-ordered cases each year. Sec-ond,
the program is making an effort to close cases according to
federal criteria.
Division Should Develop
Strategy to Improve
Performance
The Division should develop a strategy for addressing the prob-lems
it is experiencing in the support order establishment area.
Specifically, the Division should take steps to improve its timeli-ness
in establishing support orders and to increase the percent-age
of cases receiving support orders each year.
n Administrative authority could improve performance—
The program should consider seeking administrative author-ity
to establish support orders. Administrative authority
would allow the program to establish support order dollar
amounts without obtaining a court order in cases where both
the custodial and noncustodial parent agree to the dollar
amount of child support calculated by the program’s case-worker.
The program has clear rules for how to calculate
these dollar amounts because the State has established child
support guidelines that direct these calculations. Maine has
administrative authority to establish support orders and in-dicates
that this process has resulted in establishing more or-ders
in much less time. Maine’s administrative process pro-vides
full due process rights by allowing the parties the right
to a hearing and the right to appeal to the court.
Program officials believe that additional administrative au-thority
could help improve its performance, similar to pater-nity
establishment. However, to ensure additional authority
benefits all parties involved, the program should explore the
feasibility of making this change with its many stakeholders.
n Closing additional cases could improve proportion of
cases with support orders—The program should continue
its efforts to close cases that meet federal closure guidelines.
The program has recently automated this process so that
caseworkers are automatically notified of cases that need to
Clear rules already exist
for calculating the
amount of a support
order.
Finding III
39
OFFICE OF THE AUDITOR GENERAL
be closed. During fiscal year 1999, the program closed an es-timated
16,000 establishment cases.
Recommendations
1. The program, in conjunction with its stakeholders, should
explore seeking administrative authority to establish child
support orders for cases where both the custodial and non-custodial
parent agree with the program’s calculated dollar
amount.
2. The program should ensure that it provides full due process
rights as a part of its administrative process.
3. The program should continue to close cases according to
federal case closure criteria.
4. The program should ensure that caseworkers are monitoring
their closure worklist items and closing cases.
40
OFFICE OF THE AUDITOR GENERAL
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41
OFFICE OF THE AUDITOR GENERAL
FINDING IV COLLECTION ENFORCEMENT
ACTIONS CAN BE TARGETED
TO INCREASE EFFECTIVENESS
Although the program has increased its performance in collect-ing
child support, it needs to continue exploring additional ways
to reach nonpayers. The program has a variety of enforcement
strategies to help ensure child support payments are made.
However, the program should continue to explore new ways to
reach those individuals who intentionally evade or require assis-tance
in meeting their child support responsibilities.
Program Uses a Variety
of Techniques to Enforce
Child Support Obligations
Once a support order has been established, the program uses a
variety of enforcement strategies to ensure child support pay-ments
are made. Some of these enforcement actions can be im-plemented
administratively by the program, whereas others
require judicial involvement. In addition, once a case incurs a
certain level of past-due support, such as $500, the program's
automated system starts the enforcement action. One such action
is referral to a collection agency. The program has found this to
be an effective third-party technique to collect on past-due sup-port.
However, the program has found that income withhold-ings
and tax offsets are the most effective enforcement tech-niques.
For example, during fiscal year 1999, income withhold-ings
accounted for about 60 percent ($113 million) of total collec-tions
while federal tax offsets accounted for another 10 percent
($19 million).
Table 2 (see page 42) presents some of the major enforcement
strategies available to the program and the criteria needed to
initiate them. Table 3 (see page 43) presents the frequency with
which the program initiated various enforcement actions on the
Income withholdings and
tax offsets are the most
effective actions.
Finding IV
42
OFFICE OF THE AUDITOR GENERAL
Table 2
Arizona Department of Economic Security
Child Support Enforcement Program
Enforcement Remedies
Enforcement Option
and Statutory Authority Description Criteria for Use
Administrative levy
(Asset seizure)
§25-521
A property levy allows the Division to obtain
payment of a child support debt through a levy
(seizure and/or sale) of the noncustodial par-ent’s
property, including assets held in financial
institutions.
The noncustodial parent has a court or-dered
judgment for past-due child sup-port;
or, the noncustodial parent has a
past-due balance equal to 12 months of
support.
Administrative lien
§25-516
The Division places a property lien on the
noncustodial parent’s property to provide
notice to creditors of the Division’s interest in
the property.
The noncustodial parent owes at least two
months of support.
Consumer credit
reporting
§25-512
The Division reports all the names of child
support debtors and the amounts owed to
consumer credit reporting agencies.
All active child support obligations are
reported monthly.
Income
withholding
§25-505.01
The employer automatically withholds the
child support payment from the noncustodial
parent’s paycheck and sends it to the State’s
child support payment processing center.
The noncustodial parent is employed. This
action does not require a past-due amount.
License suspension
§§25-517, 25-518
The noncustodial parent’s driver, professional,
occupational, or recreational license can be
suspended or denied until he or she complies
with the child support order, a child support
subpoena, or a child support arrest warrant.
The noncustodial parent owes at least two
months of support or has not complied
with a subpoena or arrest warrant. How-ever,
a court order is required, so the Divi-sion
will make a court referral when the
noncustodial parent fails to respond to its
intent to suspend notice.
Lottery intercept
§5-525
The Division uses lottery intercepts to help
satisfy child support debts.
The noncustodial parent owes at least $100
in overdue support and the noncustodial
parent’s lottery winnings are $600 or more.
Tax offset (federal)
42 U.S.C. §664
The Division annually submits child support
debts to the Secretary of the Treasury and uses
federal tax refunds to help satisfy child support
debts.
The noncustodial parent owes at least $150
on a public assistance case or $500 on a
nonpublic assistance case.
Tax offset (state)
§42-133
The Division annually submits child support
debts to the Arizona Department of Revenue
and uses state tax refunds to help satisfy child
support debts.
The noncustodial parent owes at least $50.
Unemployment
compensation offset
§§23-783, 23-789
The Division submits child support cases to the
unemployment compensation program to
intercept child support payments from the
noncustodial parent’s unemployment compen-sation
benefits.
The noncustodial parent is receiving un-employment
compensation benefits. This
action does not require a past-due amount.
Source: Auditor General staff analysis of the Arizona and federal statutes cited above.
Finding IV
43
OFFICE OF THE AUDITOR GENERAL
approximately 119,000 cases owing past-due support in fiscal
year 1999. In some instances, the same enforcement action may
be initiated multiple times on a case. For example, cases with
outstanding balances of $100 or more are automatically matched
against the registry of state lottery winners each week.
Table 3
Arizona Department of Economic Security
Child Support Enforcement Program
Frequency of Enforcement Remedies
Year Ended June 30, 1999
Enforcement Option Frequency
Administrative lien
First notice of intent to establish lien against property
Second notice of intent to establish lien against property
Final notice of intent to establish lien against property
Lien filed
1,882
367
1,219
7,396
Collection agency referral 52,791
Income withholdings initiated 26,815
License suspension—drivers license
First notice of intent to suspend
Final notice of intent to suspend
License suspended
1,744
896
NA 1
Lottery intercept
Submitted for match against weekly winners
Winnings intercepted
3,746,278
844
Tax offset (federal)
Submitted to U.S. Internal Revenue Service
Tax refund intercepted
79,963
12,826
Tax offset (state)
Submitted to Arizona Department of Revenue
Tax refund intercepted
156,559
11,174
Unemployment compensation offset 2,667
1 The program does not currently track the number of drivers licenses suspended.
Source: Auditor General staff analysis of automated data for cases open at any time between July 1, 1996 and June 30,
1999, provided by the Arizona Department of Economic Security, Division of Child Support Enforcement. Data
on income withholdings initiated was provided by program management as it was not included in the extract
of automated data analyzed by the auditors.
Finding IV
44
OFFICE OF THE AUDITOR GENERAL
Program Should Explore
New Ways to Reach Nonpayers
The program should explore additional strategies directed to
nonpayers and for reducing its arrears balance. While the pro-gram
has undertaken efforts to address this problem, additional
actions are needed.
Program has undertaken efforts to encourage noncustodial par-ents'
payment of child support—In addition to the enforcement
remedies previously discussed, the program collaborates with
various programs to assist parents in meeting their child support
obligations. Currently, the program has entered into 13 Memo-randums
of Understanding with various community programs,
such as the City of Phoenix Step Up program. The child support
program also works with other Department programs to assist
parents in obtaining job training and assistance. The program
also participates in the workgroup responsible for reviewing and
recommending changes to the State’s child support guidelines.
As a result of their work, the guidelines include a provision that
helps ensure that low-income noncustodial parents do not have
unrealistic support obligations. Specifically, the guidelines estab-lish
the minimum dollar amount of income that must remain for
the noncustodial parent after calculating the child support
amount.
Additional initiatives are needed—The program needs to ex-plore
additional strategies for reducing the number of nonpayers
and its arrears balance. Currently, many of the enforcement ap-proaches
states use are designed for individuals with the identi-fied
financial resources to pay child support. Yet, one research
study estimates that 60 percent of noncustodial parents who do
not pay child support have a limited ability to pay support based
on their income and education levels, rates of institutionalization,
and intermittent employment history.1 In the child support
community, these individuals have come to be known as “dead-broke”
rather than “dead-beat.” Limited income may be an espe-cially
relevant factor in Arizona's program. According to the U.S.
Census Bureau, only New Mexico and Washington D.C. had
1 Sorenson, Elaine, and Laura Wheaton. Income and Demographic Characteris-tics
of Nonresident Fathers in 1993. The Urban Institute, Forthcoming Report,
1995.
Some individuals may be
“dead-broke” rather than
“dead-beat.”
Finding IV
45
OFFICE OF THE AUDITOR GENERAL
consistently higher poverty rates than Arizona in 1996-97 and
1997-98.1 During 1998 to 1999, the U.S. Census Bureau reported
that Arizona had the 11th highest poverty rate. Additionally, as
illustrated in Figure 11 (see page 46), the greatest percentage of
Arizona's nonpaying cases are those with the lowest monthly
support amounts, which suggests lower incomes since support
amounts are based primarily on income.
Researchers have found that low-income, unwed, noncustodial
parents have a difficult time keeping up with child support
payments. Although they want to provide support for their chil-dren,
they lack the financial resources to pay their full child sup-port
obligation. More often, wages they earn are not enough to
support themselves and a family, let alone multiple families.
However, even given their low wages, most noncustodial par-ents
have the ability to contribute at least some financial support
to their children. The following strategies have been suggested as
additional methods for state programs to use with nonpaying
noncustodial parents. They emphasize the importance of en-couraging
regular support payments whenever possible, even if
those payments are small.
n Targeted approaches—Recognizing the diversity of the
child support caseload is a critical step toward developing
more effective enforcement strategies. Until recently, the pro-gram
did not attempt to differentiate among families in their
caseload. This meant that enforcement efforts against poor,
unemployed, noncustodial parents usually were poorly
aimed, and had a harsher effect than on families more able to
pay.2 To address this problem, Minnesota's child support
program developed a sorting strategy based on “case seg-mentation.”
This approach groups noncustodial parents into
separate categories based on their willingness and ability to
pay and then applies different and targeted service strategies
to each category (see Item 2, page 46, for a listing of the sort-ing
categories).
1 Poverty rates were based on the 1996-97 and 1997-98 two-year moving
averages.
2 Turetsky, Vicki. Kellogg Devolution Initiative Paper: Realistic Child Support
Policies for Low Income Fathers. Center for Law and Social Policy, March
2000.
Most noncustodial par-ents
can contribute some
financial support.
Finding IV
46
OFFICE OF THE AUDITOR GENERAL
Item 2: Sorting Categories Used by
Minnesota’s Child Support
Enforcement Program
n Willing to pay
n Lack of information
n Unable to pay
n Reluctant to pay
n Actively evading payment
A case sorting strategy was also successfully employed by
the Parents Fair Share multi-state demonstration project. This
project identified and sorted into groups, unemployed or
sporadically
employed fathers
of children
receiving welfare.
Enforcement
efforts were then
targeted toward
those fathers who
were employed
and had the resources to pay, while job readiness and train-ing
services were provided to unemployed fathers to assist
them in obtaining employment and therefore be in a position
to pay their child support obligation. All seven states’ sites
participating in the project showed some increase in the
number of fathers paying. Three of these sites experienced
large increases in the number of fathers paying child support.
For example, in some sites, collections from program partici-pants
were more than 20 percent higher than the control
Providing unemployed
fathers job training in-creased
child support.
Figure 11
Arizona Department of Economic Security
Child Support Enforcement Program
Percentage of Paying and Nonpaying Cases by
Monthly Amount Ordered
Year Ended June 30, 1999
0%
20%
40%
60%
80%
100%
$100 or less $101 to $200 $201 to $300 $301 to $400 More than $400
Nonpaying cases Paying cases
Source: Auditor General staff analysis of automated data for cases open at any time between July 1, 1996, and June 30,
1999, provided by the Arizona Department of Economic Security, Division of Child Support Enforcement.
Finding IV
47
OFFICE OF THE AUDITOR GENERAL
group. By increasing their ability to differentiate among
cases, diversify their strategies, and develop strong commu-nity
ties, child support programs can more effectively help
families.
n Forgiveness policies—Forgiveness policies allow states to
assist families by removing a potential barrier to payment of
current-year support. It is not uncommon for low-income,
noncustodial parents to have child support arrears of several
thousand dollars. The median arrears balance for Arizona's
nonpaying support ordered cases was approximately $13,000
in fiscal year 1999. Studies suggest these parents may fail to
pay current-year child support because they are over-whelmed
by the size of their past-due child support debt.1
As previously discussed, this issue has particular relevance to
Arizona's child support program as it has one of the largest
arrears balances in the country (see Finding I, pages 15
through 20). It must be recognized, however, that forgiveness
policies do not address the past hardships endured by the
custodial parent and children because of the nonpayment of
child support.
There are two major approaches to addressing past-due child
support balances. The first approach is to prevent the build-up
of uncollectible amounts in the first place. For example,
New York has a statute that states if a noncustodial parent's
income is below the poverty line, no more than $500 in past-due
child support can accumulate. The second approach is to
compromise or forgive arrears under a general state law al-lowing
parties to settle. While a custodial parent may forgive
a portion or all of the arrears owed to him or her, when a cus-todial
parent receives welfare payments, the state has the
right to retain the child support payments on their case up to
the court ordered amount or the cumulative amount of the
public assistance grant, whichever is less. However, if no
payments are received, the balance owed to the state contin-ues
to grow. The federal Office of Child Support Enforce-
1 Pearson, Jessica, Nancy Thoennes, and Lanae Davis. Colorado Model Office
Project Preliminary Report on Debt and Retroactive Support Intervention. Center
for Policy Research, April 1998; and Roberts, Paula. Memorandum on Setting
Support When the Noncustodial Parent is Low Income. Center for Law and So-cial
Policy, February 1999.
Finding IV
48
OFFICE OF THE AUDITOR GENERAL
ment recently reissued a policy statement clearly stating that
states have the authority to compromise or forgive monies
owed to the state. In Arizona, legislative authority or admin-istrative
rules would be needed to implement any debt re-duction
strategy.
States have adopted various procedures to deal with uncollect-ible
arrears, including:
n Vermont (per statute) will not pursue collection of state-owed
arrears when a family reunites, unless their income ex-ceeds
225 percent of the federal poverty level.
n Illinois' courts have the authority to forgive a portion of ar-rears
if a noncustodial parent successfully completes a work
or training program.
n Iowa has proposed to allow a graduated portion of the non-custodial
parent's state-owed arrears to be reduced for con-tinual
payment of child support.
States are also conducting systematic reviews of their child sup-port
caseloads to determine which cases have uncollectible ar-rears
and implementing pilot studies to determine procedures
for effectively handling arrears. For example, California recently
contracted with The Urban Institute to conduct a collectibility
study that will analyze the current amount of child support ar-rears
statewide and determine the amount that is realistically
collectible. In addition, a work group has been established to
develop recommendations for addressing the uncollectible ar-rears.
Arizona's child support program should also begin exploring
policies for addressing its large arrears balance, given its poten-tial
impact on noncustodial parents' payment behavior. Similar
to other states, the program may want convene a work group to
first develop potential policies for addressing arrears, and then
consider initiating a pilot study to determine if the policies will
have the intended effect.
Finding IV
49
OFFICE OF THE AUDITOR GENERAL
Recommendations
1. The program should explore the feasibility of developing a
framework for sorting enforcement cases. This framework
should be used to help the program target its enforcement ac-tions
and make referrals to supportive services.
2. The program should also establish a work group to deter-mine
if the State could benefit from establishing forgiveness
policies.
50
OFFICE OF THE AUDITOR GENERAL
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51
OFFICE OF THE AUDITOR GENERAL
FINDING V PROGRAM HAS SUCCESSFULLY
ESTABLISHED STATEWIDE
AUTOMATED SYSTEM
The Arizona Tracking and Location Automated System (AT-LAS)
is the program’s comprehensive automated statewide child
support enforcement system. The system was developed using
another state’s system and has been enhanced over the past dec-ade
to meet federal requirements and Arizona’s needs. ATLAS
provides broad functional capabilities for the program and has
successfully passed federal system certification reviews. The
program helps ensure data reliability through the use of various
system controls.
ATLAS Has Developed Into
a Comprehensive Management System
The program began developing a statewide automated child
support enforcement system in the late 1980’s to help with its
case management functions. ATLAS was transferred and signifi-cantly
modified from the Idaho Child Support Enforcement
system. Additional modifications were made to ATLAS to en-sure
that it met the requirements of the Family Support Act of
1988. The Act required states to develop centralized automated
case management systems to support various functions includ-ing
case initiation, locate, enforcement, and financial manage-ment.
Further modifications were made to the system in re-sponse
to the Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA) of 1996. Major changes included
establishing a centralized payment distribution process, a direc-tory
of new hire information, and an automated process for gen-erating
income withholding orders. As a result of its ongoing
modifications and enhancements, the system has broad func-tional
capabilities (see Item 3, page 52).
Finding V
52
OFFICE OF THE AUDITOR GENERAL
The program indicates that it developed its system under tight
deadlines and within state and federal budgetary requirements.
While it has used private contractors to complete some of the
work, much of the development and modifications have been
accomplished in-house. To date, the total cost of the system has
been nearly $65 million, with more than two-thirds of the cost
covered by the federal government.
System Successfully Passed
System Certification Reviews
Arizona has consistently been one of the first states to seek and
receive federal certification of its system. Specifically, the system
received its Level I certification in September 1995, which meas-ured
how well the system (hardware and software) complies
with the requirements of the federal Office of Child Support
Enforcement. The program received its Level II certification in
March 1999. Certification at this level required all case informa-tion
be loaded and/or converted to a statewide automated sys-tem,
and all users to be trained and demonstrate proficiency.
The system is also undergoing two additional reviews. The pro-gram
began its welfare reform act (PRWORA) certification re-view
in March 1999. This review is assessing how well the sys-
Item 3: Major Functions of ATLAS
n Case initiation and management
n Parent locate
n Paternity establishment
n Support order establishment
n Debt calculation
n Interstate case processing
n Financial management
n Payment disbursement
n Report and document generation
n Security and privacy maintenance
Finding V
53
OFFICE OF THE AUDITOR GENERAL
tem is integrating the functional requirements of PRWORA. The
team leader for this review indicated that Arizona’s ATLAS sys-tem
was probably ahead of most state systems with respect to
handling the Act’s requirements. The program also requested to
be one of the pilot states for the federal data reliability audit. The
federal government established a new incentive program
through its Child Support Performance and Incentives Act of
1998. This Act requires that the data states use to generate their
federal performance reports be reliable, complete, and accurate.
Management Controls Help
Ensure Data Reliability
The program has instituted an effective system of controls for
helping ensure data is accurately entered and maintained on
ATLAS. First, all users are required to undergo comprehensive
training prior to and after receiving access to the system. For
example, all users must complete two training courses—Security
Management and ATLAS Fundamentals—before they are al-lowed
access to the system. In addition, the program also re-stricts
access through user passwords that must be changed
every 30 days, and user access profiles that limit an individual’s
level of access to the system based on what is needed to complete
their specific job function. The program has also established a
conflict of interest policy and will not allow individuals to work
on or have access to information on any case in which they may
have a personal involvement or interest, such as a child support
case involving a relative or friend.
Second, the program regularly produces both management and
exception reports and uses these reports to initiate data clean-up
projects as necessary. For example, the program undertook a
major data refinement effort to ensure the data required as a part
of PRWORA was complete and accurate. To assist with the pro-ject,
the program produced an informal report listing the cases
and data fields needing review, developed a detailed instruc-tional
guide, and provided training on how to use the guide to
complete or correct data fields.
54
OFFICE OF THE AUDITOR GENERAL
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OFFICE OF THE AUDITOR GENERAL
Agency Response
OFFICE OF THE AUDITOR GENERAL
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______________________ARIZONA DEPARTMENT OF ECONOMIC SECURITY_________________________
DIVISION OF CHILD SUPPORT ENFORCEMENT
1717 WEST JEFFERSON STREET / P.O. BOX 6123 / PHOENIX, ARIZONA 85005
Jane Dee Hull John L. Clayton
Governor Director
Ms. Debra K. Davenport, Auditor General
2910 North 44th Street, Suite 410
Phoenix, Arizona 85018
Dear Ms. Davenport:
The Department of Economic Security is pleased to provide you with the attached final response to the
Performance Audit of the Division of Child Support Enforcement (DCSE), which was completed in
accordance with the June 16, 1999, resolution of the Joint Legislative Audit Committee.
The Division of Child Support Enforcement has received national recognition in recent years for its
innovations and improvements. Specifically, as you have noted in the report, the Division was awarded
the Governor’s Spirit of Excellence award for its efforts to centralize child support payment processing.
Furthermore, the Division is proud of its improvements in the areas of customer service and collection
increases. We appreciate your statement that the program’s collections improvement in total exceeded
national performance. In state fiscal year 2000, the Division increased collections by $25 million over
state fiscal year 1999. The Division anticipates it will also be one of the first child support programs in
the nation to have been successfully certified for its automation of welfare reform requirements.
The audit identifies key areas in our program that can be enhanced by implementing the
recommendations. We would like to extend our thanks to you and your staff for the professional and
thorough audit.
Sincerely,
John L. Clayton
DEPARTMENT OF ECONOMIC SECURITY
DIVISION OF CHILD SUPPORT ENFORCEMENT
RESPONSE TO AUDITOR GENERAL FINDINGS AND RECOMMENDATIONS
DECEMBER 22, 2000
Finding I: Program Effectiveness Improving, But Additional Enhancements Needed
Finding I, Recommendations
There were no recommendations for Finding I.
Response
Finding I, Recommendations
The Department appreciates the Auditor General’s acknowledgment of the program’s
improvements in its effectiveness over the past several years. The Division, in conjunction with
its partners, will continue to look for new ways to enhance the program’s effectiveness and the
services it provides to the families of Arizona in addition to those recommended by the Auditor
General.
Finding II: Program Needs To Improve Its Paternity Establishment Performance
Finding II, Recommendations
1. The program, in conjunction with its stakeholders, should explore expanding its
administrative authority to establish paternity.
2. The program should close those paternity cases meeting federal closure criteria to allow
paternity caseworkers to focus their efforts on remaining cases.
3. The program should develop a procedure requiring supervisors to routinely review
caseworker caseloads and redistribute cases as needed to ensure caseloads are
manageable.
4. The program should consider temporarily expanding its use of contract paternity
caseworkers statewide to increase the number of paternities established.
5. The program should explore the possibility of establishing a specialized unit of paternity
caseworkers to resolve difficult paternity cases.
6. The program should seek to expand ist use of alternative sites for executing voluntary
paternity acknowledgments.
Page 2
7. The program should continue to expand its use of automation by exploring the feasibility
of:
a. Conducting periodic matches of its paternity caseload with neighboring states’ birth
records to uncover paternity acknowledgments filed in other states; and
b. Providing caseworkers with direct automated access to Arizona’s birth records so
they can conduct their own birth record searches.
Response
Finding II, Recommendations
The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
The Division agrees that it needs to improve its paternity establishment performance and will
partner with its stakeholders to explore expanding its administrative authority to establish
paternity. While the program has already undertaken several initiatives designed to increase its
performance in the paternity establishment area, the program will continue to explore and
implement additional strategies that will help improve the program’s performance, including the
recommendations put forth by the Auditor General.
Arizona already provides a variety of methods for voluntary paternity establishment that can be
characterized as non-Court based or “administrative” in nature. These are the processes that are
required by Federal law and/or used in virtually all other states. As Arizona does not have a
completely “administrative” process fo r contested paternity establishment, it will be difficult to
predict the costs associated with these changes or how successful these will be.
In fiscal year 2000, the federal government established additional closure guidelines that allow
child support programs to close cases that are missing data necessary in locating the noncustodial
parent. The program will continue to closely monitor and close those paternity cases meeting
these new guidelines as well as previous federal closure criteria.
The Division will develop a procedure to require supervisors to routinely review caseworker
caseloads and make any necessary adjustments to ensure that caseloads are equitable and
manageable. While the Division has done some monitoring of caseloads historically, it agrees
that closer and more routine reviews are warranted.
The Division will also consider the costs and benefits of expanding its use of contracted paternity
caseworkers to determine if expansion would be a prudent move. In addition, the Division will
discuss the possibility of creating an investigative paternity unit to address some of the more
complex and difficult paternity cases.
The Division will seek expansion of its voluntary paternity acknowledgement services through
additional sites recommended by the Auditor General such as Head Start agencies, Women,
Page 3
Infants, and Children (WIC) centers, and high schools. The Division will also continue to
expand its outreach efforts for the Hospital Paternity Program (HPP) to include more hospitals
and birthing facilities.
The Division will evaluate additional opportunities to expand on its automation search processes
through the matching of neighboring states’ birth records. The Division will also examine
opportunities to provide direct automated access to Arizona’s birth records for the caseworkers.
Finding III: Program Needs To Continue To Improve Its Performance in Establishing
Child Support Orders
Finding III, Recommendations
1. The program, in conjunction with its stakeholders, should explore seeking administrative
authority to establish child support orders for cases where both the custodial and non-custodial
parent agree with the program’s calculated dollar amounts.
2. The program should ensure that it provides full due process rights as part of its
administrative process.
3. The program should continue to close cases according to federal case closure criteria.
4. The Division should ensure that caseworkers are monitoring their closure worklist items
and closing cases.
Response
Finding III, Recommendations
The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
While the program has made significant improvements in the overall number and percent of
cases with child support orders, the Division agrees that it can continue to improve its
performance. For fiscal year 2000, 54 percent of cases had child support orders, thus ensuring a
continued increase in federal incentive monies. The Division, its partners and stakeholders will
further review administrative processes in other states as part of the development of any plan to
seek expanded authority. Additionally, the program and its stakeholders will work with the
Arizona Judiciary to ensure due process is afforded to all affected parties as part of its
administrative processes.
The program will continue to closely monitor and close cases pursuant to federal case closure
criteria. This will include developing procedures to ensure that caseworkers monitor their
closure worklist items and close cases.
Page 4
Finding IV: Collection Enforcement Actions Can Be Targeted To Increase Effectiveness
Finding IV, Recommendations
1. The program should explore the feasibility of developing a framework for sorting
enforcement cases. This framework should be used to help the program target its
enforcement actions and make referrals to supportive services.
2. The program should also establish a workgroup to determine if the State could benefit
from establishing forgiveness policies.
Response
Finding IV, Recommendations
The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
The Division agrees that while many automated enforcement tools are being utilized within the
program, additional enforcement actions can be targeted to increase the effectiveness of its
collection techniques. The program will plan and develop automated sorting of cases to allow
“case segmentation” for applying different strategies to specific caseloads. In addition,
supportive service consideration will be given to those groups of non-custodial parents that are
willing but unable to pay their obligated support amounts. These services will be aimed at
assisting low income and under educated parents thereby increasing their job opportunities and
ability to help their families achieve self-sufficiency.
As stated in the Auditor General’s Report, Arizona child support guidelines are designed to
allow the non-custodial parent a minimum of remaining income after the calculation of child
support. Additionally, since civil contempt is a judicial determination, the nonpaying parent’s
ability to work and pay child support is reviewed by the judicial officer prior to imposition of
sanctions. Both of these safeguards decrease the impact of enforcement on low-income
nonpaying parents. However, the Division agrees that additional techniques and supportive
services are needed to assist nonpaying parents.
The Division will establish a workgroup whose objective will be to determine the impact of
forgiving arrears on the Arizona Child Support Program, custodial parents and children. The
workgroup will further review other states’ policies in this regard and determine how best to
apply these type of policies in Arizona. If the workgroup determines a successful method for
potential policie s for addressing arrears, the Division will consider initiating a pilot study to
determine if the policies will have the intended effect.
Page 5
Finding V