Performance audit, Department of Economic Security, Child Support Enforcement

              PERFORMANCE AUDIT
OF ECONOMIC SECURITY
CHILD SUPPORT ENFORCEMENT
Report to the Arizona Legislature
By the Auditor General
December 1 992
92- 7
DOUGLAS R. NORTON, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
December 15, 1992
Members of the Arizona Legislature
The Honorable F i f e Symington, Governor
Mr. Charles E. Cowan, Director
Department of Economic Security
Transmitted herewith i s a report of the Auditor General, A Performance
Audit of the Arizona Department of Economic Security ( DES), Division of
Chi Id Support Enforcement, pursuant to a December 13, 1991 resolution of
the Joint Legislative Oversight Committee and was conducted as part of
the Sunset Review set forth in Arizona Revised Statutes
( A. R. S.) 5541- 2951 through 41- 2957.
We found the Child Support Enforcement program i s barely functioning,
only 3 percent of the more than 275,000 cases handled through the program
are receiving regular support payments. Not only does DES need more
s t a f f and more authority over the program, i t needs statutory tools to
fundamentally change some aspects of the way i t operates. Specifically,
DES needs statutory authority to privatize some of i t s functions, and
needs authority to process cases administratively rather than through the
courts. Unless significant changes are made, l i t e r a l l y hundreds of
m i l l i o n s of dollars w i l l continue to go uncollected and hundreds of
thousands of Arizona parents and children w i l l suffer the consequences.
My s t a f f and I w i l l be pleased to discuss or c l a r i f y items in the report.
This report w i l l be released to the public on December 16.
Sincerely,
D O UR.~ N~ orto n
Auditor General
2700 NORTH CENTRAL AVENUE SUITE 700 . PHOENIX, ARIZONA 85004 . ( 602) 255- 4385 . FAX ( 602) 255- 1251
SUMMARY
The Office of the Auditor General has conducted a performance audit of
the Arizona Department of Economic Security ( DES), Division of Child
Support Enforcement ( DCSE), pursuant to a December 13, 1991 resolution of
the Joint Legislative Oversight Committee. This performance audit i s the
f i r s t in a series of audits of DES conducted as part of the Sunset Review
set forth in Arizona Revised Statutes ( A. R. S.) 5541- 2951 through 41- 2957.
In 1975, Congress enacted T i t l e IV- D of the Social Security Act,
emphasizing the importance of child support enforcement on a national
basis. The program, administered by the U. S. Department of Health and
Human Services, was i n i t i a l l y designed to offset Aid to Families with
Dependent Chi ldren ( AFDC) costs by recovering from parents p a r t o r a l l of
the public assistance paid to recipients. A l l AFDC recipients are
automatically referred for child support eriforcement services. In
addition, individuals not receiving public assistance may also apply for
child support enforcement services through the IV- D program.
Arizona's IV- D Proaram Has Failed
To Collect Hundreds of Millions of Dollars
In Child Support Payments
( See pages 9 through 20)
Overwhelmed by i t s workload and understaffed, DCSE has been unable to
adequately service most of i t s cases. To collect c h i l d support, DES must
locate absent parents, determine paternity, establish support orders, and
take legal steps necessary to enforce compliance. DCSE i s far behind in
moving most of i t s cases through t h i s process. In fact, only 25 percent
of i t s cases have child support orders established, and only 3 percent of
a l l cases are receiving regular child support payments. The f a i l u r e of
parents to make ordered child support payments, and DCSE's i n a b i l i t y t o
enforce these orders, has been costly to the State and to fami lies
dependent upon child support. For just those cases converted to the new
automated system as of June 1992, over $ 300 m i l l ion in support was past
due.
Our analysis of cases actually worked by a sample of 99 workers indicated
that DCSE i s servicing only a small portion of i t s caseload. During May
1992, only 8,283 of the 123,130 cases included in our work measurement
study received some action considered necessary to move the case closer
to resolution. The outcomes resulting from these actions were minimal -
in only 56 cases was paternity established; in only 30 cases did the
non- custodial parent agree to rely on the result of a blood test to
determine paternity; and, only 52 support orders were established for the
123,130 cases studied.
Even i f DCSE improves operational efficiency as we recommend ( see Finding
1 1 1 , page 31), i t s t i l l w i l l not have enough s t a f f to process i t s
workload. The number of child support cases DCSE must work has increased
dramatically, from about 89,000 cases in 1986 to approximately 275,000
cases in 1992. In addition, DCSE reported an average of 4,300 new cases
entered the system each month in 1992. This workload i s distributed
among DCSE legal assistants at about 3,000 cases per worker. Caseloads
in several of the states we surveyed were far lower. In fact, one state
considered i t s r a t i o of 1,000 cases per worker unreasonably high.
Statutory Chanqes Are Needed For DES To
Have Adequate Authoritv Over The
Child S u ~ ~ oEr nt f orcement Proaram
( See pages 21 through 30)
DES needs a s i g n i f i c a n t l y strengthened statutory role to e f f e c t i v e l y
administer the State's child support enforcement program. Currently, the
program i s fragmented among DES, the Attorney General's Office, county
attorneys and clerks o f the Superior Court. DES does not have effective
control over the program.
Lack i ng l eve rage over the other agenc i es i nvo l ved , DES has exper i enced
considerable d i f f i c u l t y administering the program. For example, some
counties have resisted DES's e f f o r t s to compile statewide s t a t i s t i c a l
information. In other instances, t u r f battles have erupted between the
State and the counties because as one county o f f i c i a l noted, the
different agencies are " competing" and have " different p r i o r i t i e s . "
Further, DCSE has no direct authority over the Attorney General
representatives who provide legal services. While DCSE i s ultimately
responsible for the cases i t handles, it appears to have l i t t l e say as to
how i t s legal s t a f f are assigned and u t i l i z e d i n working cases.
While DCSE should not necessarily provide a l l c h i l d support enforcement
services statewide, i t needs statutory authority to e f f e c t i v e l y
administer and control the program. The determination as to who provides
IV- D services in the state should reside with DCSE. As discussed below,
the agency should also have authority to contract for services, including
legal counsel.
DCSE Can lm~ rove Productivitv And
Eff iciencv Bv lm~ lementina New
Methods And A~ proaches
( See pages 31 through 40)
DCSE can improve i t s operational efficiency by adopting new approaches or
operational methods that have been effective elsewhere. However, two of
the most promising approaches w i l l require statutory authority to
implement. F i r s t , several states are realizing s i g n i f i c a n t gains by
contracting specific functions, such as paternity establishment or
collections, to private vendors. A private collections firm in Georgia
remits $ 1 mi l lion in support payments each month to the s t a t e f o r cases
that are considered d i f f i c u l t collections cases. Tennessee has gone even
further, contracting out the entire program in some j u d i c i a l d i s t r i c t s to
a private firm. Collections increased 40 percent in one d i s t r i c t in less
than one year of operation. Second, increased use of administrative
processes, rather than relying on the courts to process cases, has been
very effective in a number of states and i s recommended by a national
study of child support enforcement.
Using existing authority, DCSE could also enhance productivity by
implementing several operational changes. For example, DCSE i s beginning
to restructure i t s work units into more focused and specialized areas,
and should continue this e f f o r t . In addition, consolidation of
processing steps, better p r i o r i t i z a t i o n of cases worked, establishment of
performance goals and an incentive program for caseworkers, more
aggressive public relations e f f o r t s , and use of improved
te lecommuni cat ions techno logy cou Id increase product i v i ty and efficiency .
DCSE Could Recover More Of Its
Administrative Costs
( See pages 41 through 45)
Arizona, l i k e most other states, can do more to recover i t s costs of
providing IV- D services to individuals who are not receiving public
assistance. A recent study by the U. S. General Accounting Office ( GAO)
found that non- AFDC c l i e n t s could afford to pay more for the services
they receive.
DCSE currently charges for only a few services, and recovers less than
two percent of i t s costs of handling non- AFDC cases. While most states
recover a similar amount, GAO i d e n t i f i e d four states that recover
anywhere from 10 to 48 percent of costs. Arizona does not charge an
application fee, nor does i t charge for most enforcement actions, support
order modifications, or paternity establishment.
The subject of cost recovery is receiving increased attention at the
national level. Both GAO and the Department of Health and Human Services
have proposals before congress to increase cost recovery.
TABLE OF CONTENTS
INTRODUCTION AND BACKGROUND. . . . . . . . . . . . . . . . . . .
FINDING I: ARIZONA'S IV- D PROGRAM HAS FAILED
TO COLLECT HUNDREDS OF MILLIONS
OF DOLLARS IN CHILD SUPPORT PAYMENTS . . . . . . . . . . . .
DCSEts Large Backlog Of Cases
W i l l Require Extensive Work
To Achieve Collections . . . . . . . . . . . . . . . . . . .
Only A Small Percentage Of DCSE's
Large Caseload Can Be Worked Each Month. . . . . . . . . . .
Millions Of Dollars In
Child Support Payments RemainUncollected . . . . . . . . . . . . . . . . . . . . .
The Current Staff Size And Operating
Procedures For Working Child Support Cases Are Very Inadequate. . . . . . . . . . . . . . . . . .
Recommendations. . . . . . . . . . . . . . . . . . . . . . .
FINDING I I : STATUTORY CHANGES ARE NEEDED FOR
DES TO HAVE ADEQUATE AUTHORITY OVER THE CHILD SUPPORT ENFORCEMENT PROGRAM. . . . . . . . . . . . . .
Program Is Fragmented, With DCSE Having L i t t l e Control . . . . . . . . . . . . . . . . .
Lacking Adequate Authority, DCSE Has
Had D i f f i c u l t y In Administering
Theprogram . . . . . . . . . . . . . . . . . . . . . . . . .
Statutory Changes Are Needed For Stronger Authority . . . . . . . . . . . . . . . . . . .
Recommendations. . . . . . . . . . . . . . . . . . . . . . .
F l ND l NG I I I : DCSE CAN l MPROVE PRODUCT I V l TY
AND EFFICIENCY BY IMPLEMENTING NEW METHODS AND APPROACHES . . . . . . . . . . . . . . . . . . .
I d e n t i f i c a t i o n Of Model Methods AndApproaches. . . . . . . . . . . . . . . . . . . . . . .
Contracting Out Services And
Reducing Reliance On The Courts Could Improve Program Performance. . . . . . . . . . . . . .
Changes In Methods Of Operation Could Increase Worker Productivity . . . . . . . . . . . . .
Recommendations. . . . . . . . . . . . . . . . . . . . . . .
TABLE OF CONTENTS ( Con't)
FINDING IV: DCSE COUUI RECOVER MOl? E
OF ITS ADMINISTRATIVE COSTS. . . . . . . . . . . . . . . . .
IV- D Service For Non- AFDC Clients
Are Subsidized By Taxpayers. . . . . . . . . . . . . . . . .
Arizona Currently Charges Few Fees
And Recovers Less Than Two Percent Of Costs. . . . . . . . .
DCSE Should Do More To
Recover Non- AFDCCosts . . . . . . . . . . . . . . . . . . .
Recommendation . . . . . . . . . . . . . . . . . . . . . . .
OTHER PERTINENT INFWTION
The Development Of ATLAS . . . . . . . . . . . . . . . . . .
AREA FOR FURTHER AUDIT WORK
Are Payments And. Distributions
Properly Controlled And Managed? . . . . . . . . . . . . . .
AGENCY RESPONSE
APPEND l X
ILLUSTRATIONS
TABLE 1 Estimated Statewide Staffing For
Child Support Enforcement
For Fiscal Year 1992- 93. . . . . . . . . . . . . 4
TABLE 2 Estimated Revenues For Child Support
Enforcement For Fiscal Year 1992- 93
( Unaudited). . . . . . . . . . . . . . . . . . . 5
TABLE 3 Current Structure Of
Arizona's Child Support Enforcement Program. . . 23
TABLE 4 Non- AFDC Costs Recovered For
Federal Fiscal Years Ended
September 30, 1990, 1991, And 1992
( Unaudited). . . . . . . . . . . . . . . . . . . 43
TABLE 5 Comparison S t a t i s t i c s For Arizona
Child Support Enforcement Offices. . . . . . . . A- i i
FIGURE 1 Percentage Of Child Support
Cases In Each Function . . . . . . . . . . . . . 12
The Office of the Auditor General has conducted a performance audit of
the Arizona Department of Economic Security ( DES), Division of Child
Support Enforcement, pursuant to a December 13, 1991, resolution of the
Joint Legislative Oversight Committee. This performance audit i s the
f i r s t in a series of audits of DES conducted as part of the Sunset Review
set forth in Arizona Revised Statutes ( A. R. S.) § § 41- 2951 through 41- 2957.
Purpose Of Child Support
Enforcement Proqram
In 1975, Congress enacted T i t l e IV- D of the Social Security Act,
emphasizing the importance of child support enforcement on a national
basis. The program i s administered by the U. S. Department of Health and
Human Services, Office of Child Support Enforcement ( OCSE). Considered
an important national program, i t was i n i t i a l l y designed t o o f f s e t the
costs associated with the Aid to Fami lies with Dependent Children ( AFDC)
program by recovering from responsible parents, part or a l l of the amount
paid in AFDC, enabling AFDC recipients to leave the program. Therefore,
a l l AFDC recipients are automatically referred for c h i l d support
enforcement services. In addition, individuals that do not receive
public assistance but wish to have the State pursue their case, can apply
to receive IV- D services at v i r t u a l ly no cost . ( I )
The importance of the program becomes even greater when one considers i t s
revenue earning potential. An e f f i c i e n t c h i l d support enforcement
program can not only recover expenditures for the State's AFDC program,
i t can produce m i l l i o n s o f dollars in unrestricted funds for state use.
In addition to retaining a portion of the AFDC collections received,
states can also earn incentive revenues from the Federal government based
on a formula which rewards cost- effective programs as well as emphasizes
the aggressive pursuit of AFDC cases.
( 1 ) There are also child support cases handled privately outside of the IV- D program. I n
fact, there are at least as many of these private cases i n Arizona as there are IV- D
cases.
Unfortunately, c h i l d support collections in Arizona have not been
s u f f i c i e n t t o receive much in Federal incentive revenues which are based
on cost- effectiveness ratios. Ratios compare dollars collected in child
support payments t o d o l l a r s expended in handling child support cases.
Arizona's cost- effectiveness r a t i o for the last two fiscal years has been
minimal; achieving an annual average cost effectiveness r a t i o of two or
less ( i. e. $ 2 are collected for every State or Federal dollar DCSE spends
to collect child support). Nationally, the average cost- effectiveness
r a t i o was 3.75: 1 for fiscal year 1989- 90. Moreover, in fiscal year
1989- 1990, Arizona was one of only ten states whose share of child
support collections and Federal incentives was i n s u f f i c i e n t to cover i t s
share of administrative expenditures.
Additionally, Arizona's program has not fared we1 l in past Federal
audits. It has undergone four Federal audits in the last f i v e years.
These audits revealed that the program was deficient in a number of
important areas. In fact, in a 1989 audit, because one deficiency
previously i d e n t i f i e d had not been corrected, Arizona was fined
$ 775,322. Pursuant to Federal regulations, Federal funding fo: the
State's Aid to Fami lies with Dependent Children program was reduced by
that amount.
Historv Of Child Support
Enforcement In Arizona
In the last ten years, Arizona's child support enforcement program has
undergone significant change. Prior to the enactment of T i t l e IV- D,
c h i l d support enforcement services were provided by the counties, through
the county attorneys. Since Federal regulations allowed the State IV- D
agency ( DES) to pass down Federal matching funds to contracting ent i ties,
most of the county attorneys entered into cooperative agreements ( i . e .
contracts) with the State. Through the contracts, the county attorneys
handled most of the functions of the program within their county.
However, over the years, the working relationship between the State and
counties deteriorated, and ultimately resulted in many of the county
attorneys leaving the program. There are a number of factors that have
contributed to the i n s t a b i l i t y of the program:
lncreased reportinq reauirements - In 1984, when Congress
s i g n i f i c a n t l y expanded T i t l e IV- D, i t required that as a condition
of receiving Federal funding, states had to demonstrate the
accountability of their programs. As a result, DES started
pressuring the counties to adequately report. Most of the county
attorneys had few s t a f f devoted to their programs, and complying
with what they f e l t were " onerous" reporting requirements became too
much of a burden for them.
lncreased monitoring - To ensure accountability of the county
programs, the State also began to ensure that cases were handled
according to Federal regulations and that expenditures charged were
appropriate. Through i t s monitoring reviews, the State disallowed
some claims by the county attorneys for reimbursement of IV- D
expenditures. This angered some county attorneys. In addition,
when Arizona failed i t s f i r s t Federal audit, and the counties were
reported out of compliance, some of the county attorney s t a f f f e l t
that the State had misled them and had not explained the rules up
front. As a result, some of the county attorneys became
disillusioned and dissatisfied with how the State was administering
the program and no longer wanted to be a part of i t .
Poor relations between State and counties - Whi le the State was
attempting to ensure that the program was meeting Federal
regulations, the manner in which some State o f f i c i a l s presented
themselves to county o f f i c i a l s resulted in a poor relationship
between the State and counties. Some county attorneys f e l t that the
State was interfering in what they perceived to be alteady
successful programs. As a result, a significant level of mistrust
and negative attitudes existed, which ultimately led to a breakdown
in cooperation and communication. According to a Federal management
study, " perceived as being set up for f a i l u r e , the counties [ were]
convinced the State [ had] plans to take over a l l c h i l d support
enforcement a c t i v i t i e s in Arizona."
As a result, by 1986, more than one- half of the counties ( 9 out of 15)
were no longer in the program. In 1988, the State received i t s biggest
i n f l u x o f county cases when Maricopa County, representing over two- thirds
of the IV- D cases in Arizona, declined t o p a r t i c i p a t e in the program.( 1)
Not only did the State have to take responsibility f o r working the cases,
i t also lost a major source of funding for the program, as the counties
that participated provided 34 percent of the funding for their programs.
( 1) According to DCSE o f f i c i a l s , a t the time, Maricopa County had possession of
approximately 35,000 non- AFDC cases and the State was already attempting to prosecute
approximately 60,000 AFDC cases f o r Maricopa County.
Today, there are only five county attorneys that contract with the State
to perform IV- D services. The State i s responsible for handling cases
for the remaining ten counties with the Attorney General's Office •
providing the legal services.
Oraanization And Staffing
In addition to DES and county attorney s t a f f , there are other agencies
involved in the program. Some clerks o f Superior Court contract to
collect and d i s t r i b u t e c h i l d support payments. The Attorney General's
Office also plays a s i g n i f i c a n t r o l e in the program. It provides legal
services for DCSE for the ten counties in which the county attorney does
not contract. ( For further information on the structure of the program,
see Finding I I , page 21).
There are approximately 802 employees statewide that are involved in
handling an estimated 275,000 IV- D child support enforcement cases. This
includes State employees ( both DES and the Attorney General's Office) and
county s t a f f ( both county attorney s t a f f and Clerk of Court s t a f f ) .
However, as i l l u s t r a t e d in Table 1, DES employs most of the s t a f f .
TABLE 1
ESTIMATED STATEWIDE STAFFING FOR
CHILD SUPPORT ENFORCEMENT
Fiscal Year 1992- 1993
DES
Attorney General
County Attorneys
Clerk of the Court
Other( a)
Total
( a) Other s t a f f include deputy s h e r i f f s t o serve l e g a l documents and Family Law
comni ssi oners w i t h i n the Superior Courts f o r expedited court hearings.
Source: Division of Child Support Enforcement and the Office of the
Attorney General.
Proaram Funding
Much of the program's funding comes from the Federal government. The
Federal government currently reimburses each state 66 percent of the cost
of administering i t s program. The state and the counties participating
in the program are, therefore, responsible for providing the remaining 34
percent for program expenditures. As AFDC collections are received, a
portion o f the funds are returned to the Federal government for i t s
contribution, and the state retains i t s share. In addition, the Federal
government w i l l provide to states a part of the Federal share according
to a formula which rewards cost- effective state programs through an AFDC
incentive provision. In addition, there i s an incentive for non- AFDC
collections, also determined by the efficiency of the program. The state
in turn, passes on a portion o f AFDC- retained collections and Federal
incentives to the counties participating in the program.
TABLE 2
ESTIMATED REVENUES FOR CHILD SUPPORT ENFORCEMENT
FOR FISCAL YEAR 1992- 93
( Unaudited)
Federal Share
Federal Match
Federal Incentives
State Share
A ~ ~ r o ~ r i a t i o n s
share' of Retained CoI Iect ions $ 4,690,200
County Share
ADDroDriation~
shire' of Retained Col lect ions $ 4251000
Total Revenue $ 37.939.100
Source: DCSE Estimated Expenditures and Revenue for Fiscal Year 1993.
0 As detai led in our findings, chi Id support enforcement i s a very complex
process involving a number of governmental agencies. Because the process
in Arizona i s highly j u d i c i a l , there are many complicated legal aspects
to the program. Unfortunately, many of Arizona's cases are at the
i n i t i a l stages of t h i s time consuming process. As a result, in Arizona,
l i k e many other states in the nation, only a small percentage of cases
are actually receiving c h i l d support payments on a regular basis. This
leaves hundreds o f m i l l i o n s of dollars that go uncollected each year.
Through our audit work, we i d e n t i f i e d a number of d i f f e r e n t methods that
may assist DES in improving i t s productivity and ultimately increasing
i t s revenue earning potential.
Audit Sco~ e
Our report presents findings and recommendations in four areas:
The extent to which c h i l d support cases are worked and collections
are received,
The need for statutory changes that w i l l provide DES with adequate
authority to administer the program,
The need to implement additional operational strategies to increase
productivity, and
The need for DES to implement a more aggressive cost recovery program.
Our audit contained some scope limitations. During the audit, the
program was i n the middle of conversion to a statewide automated system,
therefore, we were unable to obtain statewide data from a single
system.(') In addition, we encountered problems with data accuracy
because the other systems used in conjunction with the new system are
plagued with inaccurate and incomplete i n f o r m a t i ~ n . ( ~ ) F urthermore, some
( 1) The Statewide Caseload Index ( SCI), implemented i n 1988, i s scheduled to be phased out
by December 31, 1992. A l l c h i l d support enforcement information w i l l be maintained i n
the Arizona Tracking and Locating Automated System ( ATLAS).
( 2) We did not attempt to t e s t the accuracy of the information within any of the automated
systems.
counties were unable t o p a r t i c i p a t e in our study because they were in the
midst of converting to the new system, and therefore had devoted much of
their time and resources to that e f f o r t .
The report also presents other information on the history of the
development and current status of the new automated system ( see pages 47
through 51).
The audit was conducted in accordance with government auditing standards.
The Auditor General and s t a f f express appreciation to the Director of the
Arizona Department of Economic Security, the Assistant Director and s t a f f
of the Chi Id Support Enforcement Division, as well as the many Attorney
General and county s t a f f for their cooperation and assistance during the
audi t .
FINDING I
ARIZONA'S IV- D PROGRAM HAS FAILED
TO COLLECT HUNDREDS OF MILLIONS OF DOLLARS
IN CHILD SUPPORT PAYMENTS
Overwhelmed by an enormous workload, DCSE obtains regular c h i l d support
payments for fewer than five percent of the parents i t serves. Large
backlogs exist in almost every phase of the lengthy process that should
eventually culminate in the collection of c h i l d support. Yet, only a
small portion o f backlogged cases are worked each month. Even in the one
in four cases where support orders have been established, amounts
collected f a l l far short of what i s owed. We found the current s t a f f i n g
and operating procedures for working c h i l d support cases are very
inadequate. As a result, Arizona has failed to collect hundreds of
m i l l i o n s o f dollars in child support payments.
DCSE's Larae Backloa Of Cases Will
Require Extensive Work To Achieve Collections
DCSE i s buried under a backlog of cases that need substantial work before
c h i l d support payments can be collected. Working c h i l d support cases
includes a l l the a c t i v i t i e s which are necessary to collect chi Id support,
such as locating an absent parent, establ ishing paternity, establ ishing a
support order, or enforcing a support order.(') Unfortunately, almost
one- half of Arizona's 275,000 c h i l d support cases are in the early stages
of the process and w i l l require substantial e f f o r t s t o bring them closer
to resolution.
The c h i l d support process can involve many a c t i v i t i e s - Child support
cases can take various paths through the c h i l d support system, however
the major functional a c t i v i t i e s of any child support enforcement program
include:
( 1 ) Not a l l a c t i v i t i e s may be required in each case.
9
I ntake/ Assessment i nvo l ves open i ng a case record and comp i l i ng data
on the custodial family and non- custodial parent. This i s the point
where a case enters the process. Accurate and complete information
regarding the non- custodial parent's social security number,
employer's address, and names of friends and relatives should be
gathered to help locate the non- custodial parent. However, in many
cases, l i t t l e information regarding the non- custodial parent i s
available.
0 Locate encompasses a l l the e f f o r t s t o find alleged or acknowledged
parents who are not f u l f i l l i n g their financial obligation to support
their children. Locating the non- custodial parent i s c r i t i c a l
because DES cannot complete the subsequent steps of establishing
paternity and the support obligation ( i f needed) or of collecting
c h i l d support payments without it.(')
Paternitv establishment is a key component of any chi Id support
enforcement program because the a1 leged father of a chi Id must be
i d e n t i f i e d as the legal father before a chi Id support order can be
established and enforced. Paternities are established in either of
two ways: ( 1) through a voluntary acknowledgement by the father or
( 2) i f the case is contested, through a determination based on
s c i e n t i f i c and testimonial evidence.
S u ~ ~ o or rtd er establishment involves the development of a support
award that legally obligates the non- custodial parent to pay child
support. i f the non- custodial parent f a i l s to stipulate to a child
support amount based on Arizona's Child Support Guidelines, the case
i s referred to the Attorney General's Office for p r o s e ~ u t i o n . ( ~ )
Enforcement refers to a wide array of techniques that can be used to
enforce the payment of delinquent accounts ( arrears) or to ensure
regularity and completeness of current accounts. These techniques
include wage assignments, Federal and State tax intercepts, lottery
intercepts, unemployment insurance intercepts, etc.
Col lections refers to the processing, recording, and d i s t r i b u t i n g of
c h i l d support collections from the non- custodial parent. Bringing a
case t o t h i s point i s the ultimate goal of any chi Id support
enforcement program since i t indicates the non- custodial parent has
become f i n a n c i a l l y responsible for the child.
( 1) A case can go t o one of several d i f f e r e n t places a f t e r the non- custodial parent has
been located. I f p a t e r n i t y i s an issue, the case w i l l go t o the p a t e r n i t y f u n c t i o n .
I f p a t e r n i t y has already been established but no support order e x i s t s , the next step
i s t o e s t a b l i s h a c h i l d support order. I f a c h i l d support order already e x i s t s , the
case w i l l be r e f e r r e d t o enforcement t o enforce payment o f the c h i l d support order.
( 2) Cases i n the f i v e county- run programs are prosecuted by the county a t t o r n e y ' s o f f i c e .
The extent and type of a c t i v i t i e s performed by DES to process a case
varies greatly. For example, in the case of an unmarried couple where
the mother has custody of the child, before DES can make a collection, i t
may have to locate the a l leged father, establish paternity, obtain a
support order and perhaps implement some form of enforcement a c t i v i t y .
In contrast, where a couple gained a support order w i t h t h e i r divorce,
DES might conduct only locator a c t i v i t i e s and some form of enforcement
a c t i v i t y to obtain a collection. In any case, processing a c h i l d
support case to the point of achieving collections can be d i f f i c u l t and
time consuming.
Most cases are backloaaed in the early s t a ~ e s of the process - The
majority of Arizona's c h i l d support cases need substantial actions to
move the cases closer to the ultimate goal of collecting c h i l d support
payments. A DCSE report indicates only about 25 percent of the existing
cases have a c h i l d support order established. Furthermore, only three
percent of a l l cases are receiving regular c h i l d support payments.
Figure 1 ( see page 12) reveals the largest percentage of DCSE's chi Id
support cases are in the paternity function. As noted e a r l i e r , paternity
must f i r s t be established before a chi Id support order can be established
and c h i l d support payments can be collected. However, as of October
1992, paternity has yet to be established in over 94,000 cases.(') An
additional 65,220 cases require locating the non- custodial parent before
any further action can be taken.
( 1) As of October 5, 1992, 223,000 of the estimated 275,000 cases have been loaded onto
DCSE1s new caseload tracking system called ATLAS ( Arizona Tracking and Locating
Automated System). Thus, the actual number of cases needing p a t e r n i t y established
and non- custodi a1 parents 1 ocated w i 11 be even higher .
FIGURE 1
PERCENTAGE OF CHILD SUPPORT
CASES IN EACH FUNCTION
Enforcement \
Assessment
2.0%
\ Support Order
Establishment
10.0%
Paternity Establishment
42 0%
( a) Percentages do not equal 100% due to rounding.
Source: October 5, 1992 DCSE report of chi Id support enforcement cases
by function.
Onlv A Small Percentaae Of DCSE's
Larae Caseload Can Be Worked Each Month
Our review of cases actually worked indicates that DCSE cannot, given
current resources, make even a small dent in i t s enormous workload. A
data collection study involving ten of the 15 counties serviced by the
State revealed that less than 10 percent of the active cases were worked
in May. Many cases appear to simp ly become lost in the sys tem.
To determine the extent to which child support cases are worked, 99 s t a f f
from 10 counties were asked to capture on a daily basis every case worked
on during the month of May 1992.(') According to agency caseload
figures, these 99 s t a f f were responsible for 123,130 child support cases,
or 45 percent of the State's reported cases. We selected a one month
data collection period for two reasons:
1. We were interested in determining s t a f f ' s a b i l i t y to handle a l l of
their assigned cases during a one month period; and,
2. S t a t i s t i c a l reports are compiled on a monthly basis; thus we were
able to compare the volume of cases worked in the month to the
results reported by the 99 s t a f f .
Using DCSE caseload data f i l e s , we matched those cases handled to the
cases available to work in an attempt to identify the extent to which
cases are worked in one month's time. Information presented regarding
cases worked and results achieved pertains to only these 123,130 cases
and the 99 s t a f f involved in the data collection study, unless otherwise
noted.
Number of cases worked i s small - Our data collection e f f o r t revealed
that most of DCSE's cases received no a c t i v i t y i n May. Specifically, our
analysis revealed:
Only 8,283 cases ( 7 percent) of 123,130 cases received action
considered necessary to move a case closer to resolution; i. e. locate
attempts, telephone c a l l s made to obtain information or c a l l s taken
to receive information on a case, letters sent requesting
appointments with custodial or non- custodial parents, referring cases
for prosecution, etc.
( 1) DCSE s t a f f included legal assistants, u n i t technicians and c l e r i c a l personnel. These
s t a f f handle cases for Apache, Coconino, Graham, Greenlee, LaPaz, Maricopa, Mohave,
Santa Cruz, Yavapai, and Yuma counties participated i n the data c o l l e c t i o n study.
A1 though we attempted to include contracting counties i n our study, various factors
precluded these counties from p a r t i c i p a t i n g . I n addition, the analysis does not
include cases handled by the Attorney General Is Office.
3,410 additional cases ( 3 percent) received some action that did not
impact the processing of the case; i . e. a telephone c a l l requesting
the status of the case, f i l i n g a piece of correspondence in the case
f i l e , or simply p u l l i n g the case up on the computer for review.
In addition, very few measurable results were reported in association
with the thousands of cases handled in May. Monthly reports capturing
the results achieved by the 99 s t a f f involved i n our data collection
revealed :
Non- custodial parents were located i n 1,214 cases.
Paternity was established in 56 cases; i n another 30 cases
non- custodial parents agreed to acknowledge paternity. once a blood
test was conducted and the t e s t results were positive.
Child support orders were established for 52 cases.
Wage assignments were ordered in 37 cases ( many of which are the same
cases as those where chi Id support orders were established) and 174
wage assignments were enforced resulting i n an additional $ 68,826
that could be col lected monthly.'( l)
Manv cases experience delays - Many cases have not progressed in quite a
while. Our analysis revealed that thousands of cases remain at the same
step of the process for months.( 2) Specifically, we found:
Cases remain in the paternity function ( i . e. paternity needs to be
established) an average of 10 months. Over 5,000 cases have been at
t h i s stage of the process for over one year; another 129 cases have
been at t h i s function for over two years.
Cases have been in the establishment function ( i . e . c h i l d support
order needs to be established) an average of 10 months also. Of the
6,369 cases in t h i s function, 37 percent have remained at t h i s step
of the process for over one year.
( 1) Although current law requires an automatic wage assignment on a l l new c h i l d support
orders, a wage assignment can only be implemented i f the non- custodial parent has
v e r i f i e d employment .
( 2) Analysis was performed on 36,962 active cases as of a May 26, 1992 ATLAS data f i l e .
These cases represented the caseload i n nine of the 10 counties involved i n our data
c o l l e c t i o n study. We could not determine the length of time cases are i n the locate
function since a date of assignment was not provided i n 94.5 percent of these cases.
Data obtained from an older computer system f o r Maricopa County cases could not track
length of time i n each function.
However , many factors beyond DCSE ' s con t ro l can impact the amount of t i me
i t takes to process a case. For example, e f f o r t s to process a case can
be hindered i f l i t t le or inaccurate information i s provided regarding the
non- custodial parent. We found that information c r u c i a l t o locating a
person, such as social security numbers and even the non- custodial
parent's name, i s often not provided.(') In addition, in many cases i t
appears the custodial parent f a i l s to provide documents which DCSE must
have before any action can be taken. For instance, some custodial
parents fai l to provide the paperwork identifying the father or al leged
father which is a document DCSE must obtain before processing a paternity
case. The cooperation of the non- custodial parent i s also crucial to
moving a case along in a timely manner; however, we found many
non- custodial parents are uncooperative.
In addition to factors beyond DCSE's control, we found some cases are
delayed simply because no one is actively working on them. We reviewed a
small judgmental sample of 33 cases and found that more than one- half of
these cases had not been actively worked in over six months.( 2) A few
cases had gone several years without being actively worked. Following i s
D
an example of a viable case that has essentially been lost in the system
for more than two years.
In January 1990, an unmarried mother of a 13 year old chi Id applied
for help with DCSE to establish paternity and a chi Id support order.
DCSE v e r i f i e d the alleged father's social security number, residence
and place of employment shortly thereafter; however, no further
action has been taken on this case in over two years. A DCSE s t a f f
person responded that i f the custodial parent had kept in touch with
DCSE , the case most l i ke l y wou l d have been worked. However, a lack
o f s t a f f prevents them from working a l l cases.
( 1) I n our analysis of 123,130 cases, we found 49,505 cases had an i n v a l i d or no social
security number and the non- custodial parent's name was unknown i n 2,788 cases.
( 2) A random sample of 33 cases was selected f o r review from the population of cases i n
our data c o l l e c t i o n study that were not handled i n May.
DCSE also i d e n t i f i e d many cases that have been neglected for years.(')
Data compiled by DCSE s t a f f revealed that 26 percent of 828 cases
rev i ewed had not been worked i n over f i ve years. One case had not been
worked in over 20 years. Many of these cases were subsequently closed;
some due to the expiration of the statute of limitations.
Millions Of Dollars In Child
S u ~ ~ oPratv ments Remain Uncollected
Child support i s oftentimes not collected in the one in four cases which
have orders established. We analyzed child support debt and receipt
information and found that an overwhelming majority o f non- custodial
parents are f a i l i n g to comply with monthly support obligations. As a
result, hundreds o f m i l l i o n s of dollars in child support payments remain
uncollected. Specifically, our analysis found:
20,476 of the 30,618 cases that should have received c h i l d support
payments in May received no payments for the month.
17,772 of the 30,618 cases received no c h i l d support payments the
f i r s t five months of 1992.
Less than $ 4.1 m i l l i o n of the $ 7 . 7 m i l l i o n due inMay was collected.
The f a i l u r e of non- custodial parents to make ordered c h i l d support
payments has created an enormous balance of past due chi Id support that
continues to grow. For just those cases on the new automated system as
of June 1992, over $ 300 mi l l ion in chi Id support was past due. Over $ 100
mi l l ion of this amount is owed for reimbursement of Aid to Fami lies with
Dependent Children ( AFDC) grants. The actual amount past due w i l l be
much higher since at least one- ha1 f of Mar icopa County's cases were not
yet on the ATLAS system as of June 1992.
Arizona i s not alone in i t s struggle to collect child support. The
a b i l i t y to enforce payment of chi Id support owed i s a national problem.
Arizona's collection rate of 52 percent in May 1992 is similar to the
national collection rate of 53 percent reported in 1990.
( 1) Prior to converting cases to ATLAS, DCSE attempted to i d e n t i f y cases that could be
closed. Using several c r i t e r i a , DCSE i d e n t i f i e d over 80,000 cases to review f o r
closure.
The Current Staff Size And
O~ eratincl Procedures For Workina Child
Support Cases Are Very Inadequate
The number of s t a f f , as well some operating procedures, i s insufficient
to handle the increasing number of child support cases. While DCSE
management is taking steps to lower caseload ratios, other options to
improve case handling should also be considered, as discussed in Finding
1 1 1 .
The number of child support cases DCSE i s responsible for has increased
dramatically and continues t o r i s e . Arizona's caseload has t r i p l e d in
the past seven years, increasing from a reported 88,757 cases in 1986 to
approximately 275,000 cases in 1992. DCSE reported that an average of
4,300 new cases entered the system each month in 1992. Until several
years ago, various county attorney offices operated the c h i l d support
function while the State performed a mainly administrative role.
However, as counties opted out of the program the State acquired their
c h i l d support cases. When Maricopa County l e f t the program in 1988 the
State was burdened with an additional 35,000 c h i l d support cases. Some
believe the State has never f u l l y recovered from this increase in cases.
Caseloads are too hiqh - Large caseloads have overwhelmed s t a f f .
Although caseloads vary among offices, DCSE legal assistants average
about 3,000 cases each.(') Approximately 97 percent of these cases
require some type of action and many cases, such as paternity cases, w i l l
require numerous actions. However, various c h i l d support s t a f f indicated
they cannot possibly work a l l their cases and that only those parents
that I1scream the loudest" receive attention. One supervisor commented
that some f i l e s have not been worked in six years and does not anticipate
that they w i l l be worked any time soon. Another supervisor remarked that
75 to 80 percent of the cases are backlogged and i t would take years
( 1) Legal Assistants1 caseloads ranged from a low of 1,208 cases f o r Santa Cruz County t o
a high of 6,185 cases f o r Apache County. However, not a l l cases can be considered
workable. Many cases do not have s u f f i c i e n t information t o l o c a t e the non- custodial
parent and t o proceed w i t h the case: i n other cases where the non- custodial parent
resides on an Indian reservation, they are not w i t h i n the j u r i s d i c t i o n o f S t a t e c o u r t s
and DES has been unable to g e t t h e t r i b a l courts t o enforce t h e orders.
to work them al I. A major reason cited for not working cases was simply
the volume of cases.
DCSE1s caseload i s high compared to similar programs in other states. We
surveyed 11 child support programs in other states in an e f f o r t to
identify and compare their caseload ratios and found that although
program structures and s t a f f responsibilities vary, other state's
caseloads are t y p i c a l l y much lower than Arizona's.(') For example,
Minnesota's child support o f f i c e r s average 400 cases each while
enforcement o f f i c e r s in Maine average 600 to 700 cases each. Alabama
o f f i c i a l s consider their caseworkers' 1,000: l r a t i o unreasonable.
Compared to the states we surveyed, DCSE's r a t i o of 3,000 cases per
caseworker i s extremely high. In fact, a representative of a national
c h i l d support organization remarked that Arizona's caseload i s
" ou t rageous . ' I
Current plans to lower caseloads mav not provide auick results - Although
DCSE management has made case load reduc t ion a pr i or i ty , case l oads are so
large that current plans to hire some additional s t a f f may not
s i g n i f i c a n t l y impact the problem. In an attempt to address i t s problem
of high caseloads and low accountability, DCSE management has recently
developed a plan to reorganize and hire additional s t a f f . In fact, some
additional s t a f f have already been hired.( 2) In addition, by April 1993,
management plans to h i r e an additional 67 s t a f f and open one additional
o f f i c e i n Maricopa County. Under this plan the number of DCSE legal
assistants w i l l increase by over one- half, from 65 to 104 legal
assistants. However, DCSE estimates caseloads w i l l s t i l l average about
2,200 per legal assistant.( 3) Eventually, DCSE would l i k e to get
caseloads down to between 850 and 1,250 cases per legal assistant and
plans to h i r e additional s t a f f as funds are available.
( 1) States included i n the survey were Alabama, Colorado, Idaho, Indiana, Maine,
Massachusetts, Michigan, Minnesota, Oregon, Pennsylvania and Virginia. See Appendix
f o r d e t a i l s on how these states were selected.
( 2) According to DCSE, these positions w i l l be funded by additional revenue generated from
increased establ i shment and enforcement a c t i v i t i e s .
( 3) Based on DCSE's estimate of 225,787 State cases f o r 1993.
The current gap between s t a f f i n g levels and workload i s so great that
DCSE should not wait to increase i t s s t a f f i n g levels. We recognize that
DCSE can s i g n i f i c a n t l y improve productivity by completing i t s conversion
to an automated system and by improving i t s operational methods ( see
page 34). In addition, other productivity improvements may be possible
through contracting out some functions, i f DCSE is given authority to do
so ( see page 32). However, even i f productivity i s doubled, or even
t r i p l e d , too many cases would s t i l l remain unworked or would be neglected
for unacceptable periods of time. While we do not know the precise
number, i t appears s i g n i f i c a n t l y more s t a f f are needed and DCSE should
expand and accelerate i t s current hiring plans.
DCSE should undertake a study of i t s chi Id support enforcement program to
identify optimum case processing methods and a formula for determining
and implementing the most appropriate s t a f f allocation. Tools are
available to assist DES in forecasting i t s s t a f f i n g needs. We found the
Federal Office of Child Support Enforcement has developed a workbook to
assist states in developing model o f f i c e designs and determining
appropriate resource allocations using a minimum of time and internal
resources .
RECOMMENDATIONS
1. DCSE should consider undertaking a study to determine how many
additional s t a f f are needed to e f f i c i e n t l y and e f f e c t i v e l y process
c h i l d support cases.
2. The Legislature should consider supporting DCSE's e f f o r t s to increase
s t a f f .
FINDING II
STATUTORY CHANGES ARE NEEDED FOR
DES TO HAVE ADEQUATE AUTHORITY
OVER THE CHILD SUPPORT ENFORCEMENT PROGRAM
DCSEts role as the statewide authority over the child support enforcement
program needs to be s i g n i f i c a n t l y strengthened. Currently, the program
i s fragmented among numerous agencies with DCSE having l i t t l e
administrative authority. Lacking adequate control, DES has at times
experienced problems in obtaining cooperation. Statutory changes are
needed to provide DES with the options i t needs to administer an
e f f i c i e n t and effective program.
When T i t l e IV- D of the Social Security Act was enacted in 1975, states
were required by Federal law to establish a " single and separate
organizational unit to administer the IV- D plan." Since t h i s unit must
be a State agency, DES was designated as the IV- D agency. Further,
pursuant to Federal regulations, the " IV- D agency shall be responsible
and accountable for the operation of the IV- D program." While the IV- D
agency i s not required to carry out a l l functions of the program, i t must
D insure that the program i s carried out properly, e f f i c i e n t l y , and
e f f e c t i v e l y throughout the State.
Proararn Is Fraarnented, With
DCSE Havina Little Control
DCSE has never been able to e f f e c t i v e l y f u l f i l l i t s statewide
administrative role required by Federal law. Responsibility for the
program i s fragmented among numerous State and county agencies and DCSE
does not have control over i t .
Arizona's chi Id s u p ~ o r t enforcement proaram i s fraamented - A variety of
State and county agencies are involved in c h i l d support enforcement,
resulting in a fragmented and unstable statewide structure. Federal
regulations allow the IV- D agency to contract for a variety of IV- D
services throughout the State. During the early years of the program,
most of the counties contracted with DES to provide IV- D services.
However, during the 19801s, many county attorneys opted to no longer
participate in the program, leaving their caseloads for the State to
work. Today, there are only five county attorney offices that perform
most of the IV- D a c t i v i t i e s in their counties.(')
In addition to services performed by the county attorneys, many county
Clerks of Superior Court ( COC) contract to handle the function of
receiving, posting and d i s t r i b u t i n g c h i l d support payments. County
Sheriffs may also participate in the program by assisting DCSE in serving
legal papers when necessary. Furthermore, county contracts may also
include authorization for the Superior Court to appoint a Family Law
Commissioner to expedite the c h i l d support hearing process. F i n a l l y , a t
the State level, DCSE contracts with the Attorney General's Office to
assist i t in processing cases in those counties in which the county
attorney does not contract.
Thus, as i l l u s t r a t e d in Table 3 ( see page 23), the mix of agencies
providing services in any given county can be d i f f e r e n t . I n a l l , a case
may pass through four different governmental agencies during the course
of being worked.
( 1) DES signs a single contract with each county Board of Supervisors f o r the p a r t i c u l a r
functions i n which the county wants to participate.
TABLE 3
CURRENT STRUCTURE OF
ARIZONA'S CHILD SUPPORT ENFORCEMENT PROGRAM
Case
Process i naca)
Payment
Processing
Service of
Processcby
Court
County Hear ings( c)
Apache
Coch i se
Cocon i no
DCSE
County Atty
DCSE
coc
coc
coc
DCSE
Sheriff
DCSE
Judge
Judge
Judge
Gi la
Graham
Green lee
County Atty
DCSE
coc
DCSE
DCSE
DCSE
DCSE
DCSE
Commissioner
Judge
DCSE Judge
La Paz
Mar i copa
Mohave
DCSE
DCSE
DCSE
DCSE
coc
DCSE
DCSE
DCSE
DCSE
Judge
Commissioner
Judge
Nava j o
Pi ma
Pinal
County Atty
County Atty
County Atty
coc
coc
coc
Sheriff
Sheriff
Sheriff
Commissioner
Commissioner
Commissioner
Santa Cruz
Yavapa i
Y uma
DCSE
DCSE
DCSE
coc
DCSE
DCSE
DCSE
DCSE
DCSE
Judge
Judge
Judge
( a) The Attorney General's Office provides l e g a l representation f o r DCSE f o r cases
needing 1 egal action.
( b) DCSE contracts w i t h a p r i v a t e vendor f o r service of process.
( c ) Superior Court has j u r i s d i c t i o n over c h i l d support cases.
Source: Division of Child Support Enforcement
Statutes do not provide for overall Droaram control - Although DES i s
responsible for the program statewide, statutes currently do not contain
provisions that mandate i t s control and authority over the various
agencies involved. There i s only one statute that requires DES to
administer the program. However, i t does not define the term
" administer1' nor does i t describe the responsibilities or actions DES
should take in administering child support enforcement services. In
fact, other statutes pertaining to child support enforcement reveal that
DES has very l i t t l e control over who provides services, indicating that
i t must rely on the either a county attorney or the Attorney General as
the prosecuting agency. According to A. R. S $ 46- 133( D), " the appropriate
county attorney shall have j u r i s d i c t i o n to prosecute and enforce a l l
actions arising under the child support enforcement programs ..., except
that the attorney general shall have concurrent j u r i s d i c t i o n in any
county where the county attorney refuses to prosecute and enforce the
actions . . . I 1 While the county attorney's and the Attorney General's role
i s w r i t t e n i n t o law, there i s no statute that provides DES with control
over the services provided by these agencies. I f a county attorney
decides to no longer participate in the program, DCSE must step in and,
with the assistance of the Attorney General's Office, work that county's
cases. On the other hand, i f a county attorney currently not in the
program wanted to provide IV- D child support enforcement services, DCSE
could not disallow that participation.
Lackina Adeauate Authority, DCSE Has Had
Difficultv In Administering The Pro~ rarn
Lacking leverage over the agencies involved in the program, DCSE has
experienced considerable d i f f i c u l t y serving as the statewide agency
responsible for administering child support enforcement. For instance,
the State and the counties remain gridlocked over various issues
regarding the operation and administration of the program. In addition,
DCSE has had l i t t l e control over the nature and type of legal services
provided by the Attorney General's Office.
State has d i f f i c u l t y at times in exertina i t s authority over county
aaencies - Agencies involved in child support enforcement have resisted
DES e f f o r t s to exert statewide leadership and control over the program.
Currently, DCSE relies on five county attorney's offices to perform a
s i g n i f i c a n t portion o f the program in those counties. Over the years,
DCSE and some of the county attorneys offices have had differences over
the manner in which the program should be operated and administered.
" Turf Battles" - Limited authority over the counties has resulted in
t u r f battles between State and county, ultimately impacting program
accountability. As one county o f f i c i a l aptly noted, " the different
agencies are competing, they have different p r i o r i t i e s , things get
in the way of cooperating, and there i s a tendency for
r e s p o n s i b i l i t y t o be directed to no one in particular."
Responsibility for working cases i s an example o f t h i s . According
to a DCSE o f f i c i a l , county attorneys participating in the program in
the past were allowed to work only a portion of the IV- D cases in
their county. Some counties selectively chose the cases they would
work, with a tendency to concentrate on non- public- assistance cases,
placing the burden on the State to work the pub1 i c assistance ( i . e.
AFDC) cases. In a report to the Legislature in September 1991, DCSE
reported that 35,800 of the total 57,400 child support cases for
four of the contracting counties were handled at the State level.
Genetic testina for ~ a t e r n i t y determination - Some counties have
resisted DCSE's requests to use a cheaper, more accurate blood test
for purposes of determining paternity. In instances when an alleged
father refuses t o s t i p u l a t e , he is required to take a blood test for
f i n a l determination o f paternity. I f the test results are positive,
the father must pay for testing; i f negative, the State incurs the
cost. There are various testing methods that can be used to
determine paternity. For instance, DCSE prefers to use DNA testing
for a f l a t fee rate. This fee includes any additional work, such as
having to t e s t i f y in court. When DCSE sent out the request for
proposal for this contract, i t invited the county attorneys to
join. However, according to a DCSE o f f i c i a l , some of the county
attorneys offices prefer a different method, known as HLA. HLA
testing could cost more because i t does not include any additional
work.
Conversion to statewide automated svstem - County resistance to
conversion to the new statewide automated system impacted DCSE's
scheduling for the project. According to DCSE s t a f f , some counties
have resisted i t s e f f o r t s to convert their cases. For instance, in
i t s original plan for converting cases to the new system, DCSE
planned t o s t a r t with a smaller, pi lot county then covert the
largest county, Maricopa. However, because of i t s concerns about
the capabilities of the system and the pending implementation of i t s
own court- based system, the Clerk of Court in Maricopa resisted
attempts to convert. In fact, Maricopa County attempted to obtain a
waiver from the Federal requirement for a single statewide automated
system. Due to these delays, Maricopa w i l l be the last county to
complete the conversion process.
Re~ ortina requirements - Although the IV- D agency i s responsible for
developing statewide s t a t i s t i c s for Federal reporting and
accountability, some counties have not complied with requests to
provide such information. Some counties have refused to abide by
DCSE's requests and only report what they believe i s necessary. One
county has modified the report down from i t s original six- page
format to three pages. Two other counties only report on three
specific items ( number of paternities established, non- custodial
parents located, and support orders established).
Some DCSE o f f i c i a l s believe the problems with limited authority are
compounded by the fact that the county programs are run by elected
o f f i c i a l s who have their own agendas and p r i o r i t i e s . One DCSE o f f i c i a l
noted that the level of participation in the program varied radically as
new p o l i t i c i a n s were elected. Furthermore, although there are contracts
in place, and provisions in those contracts that allow the State to
penalize the contractors i f they f a i l to comply with State and Federal
requirements, State o f f i c i a l s feel that the program i s so p o l i t i c a l that
they have very l i t t l e , i f any, power over the county attorneys.
DCSE has also had d i f f i c u l t v exertina control over i t s own legal s t a f f -
Although DCSE must rely on the Attorney General's Office to provide legal
services, i t has no direct authority over the attorneys and the services
they provide. This has resulted in several problems for DCSE. For
instance, although the Attorney General's Office has been providing legal
services for DCSE since the early 19801s, no contract for such services
was in place unti l October 1991. According to a DCSE o f f i c i a l , Federal
regulations require a contract for legal services and empower the agency
to guide the direction of legal services.
Although a contract i s now in place, DCSE s t i l l lacks control over basic
work arrangements that i t needs to e f f e c t i v e l y perform i t s
responsibilities:
Accessibi l i t v to attorneys - One concern DCSE o f f i c i a l s have i s
a c c e s s i b i l i t y to Attorney General s t a f f . While DCSE i s ultimately
accountable for the cases i t handles, i t appears to have l i t t l e say
as to how i t s legal s t a f f are u t i l i z e d in working these cases. For
instance, while DCSE s t a f f generate many legal documents that need
review and approval before further action can be taken, the Attorney
General's Office did not commit to locating attorneys at DCSE u n t i l
1990 to expedite this process.
In addition, while the Attorney General's Office now has four
attorneys at DCSE, the attorneys are not assigned to any given unit
or number of cases. Instead, they review cases in the order they
are referred. According to a DCSE o f f i c i a l , this results in a
constant flow of paperwork back and forth between DCSE legal
assistants and attorneys, creating delays. Our review of records
used to track case progress, revealed that case documents wait an
average o f f i v e days for review by an Assistant Attorney General.
I f the documents are approved, i t takes an additional two days on
average, before they are returned to the caseworker.
Rotation of attornevs - Accessibility to attorneys becomes even more
frustrating when they are rotated in and out of DCSE. Generally,
every three to four months, attorneys are rotated from DCSE as
supervising attorneys to the Attorney General's Office as t r i a l
attorneys for child support cases, and vice versa. One DCSE
o f f i c i a l commented that the rotation o f attorneys i s disruptive,
lacks continuity, and reveals a lack of commitment on the part of
the Attorney General's Office t o provide adequate legal services.
Additional ly, the rotat ion frustrates DCSE s t a f f because they of ten
end up working with a different attorney and have t o " t r a i n " each
new attorney as they are rotated in.
The Attorney General Is Off ice be1 ieves that rotation o f attorneys i s
beneficial for i t s s t a f f . The attorneys are allowed to gain some
experience by working with the t r i a l group f i r s t , and then can
transfer over to DCSE to provide legal guidance. Additionally, the
attorneys have indicated they do not want to be " pigeon- holed" into
the position of supervising attorney at DCSE.
While the Attorney General's viewpoint on s t a f f i n g u t i l i z a t i o n may be
well suited for i t s needs, i t does not necessarily meet DCSE's needs.
DCSE o f f i c i a l s would prefer to have the attorneys work more d i r e c t l y with
the legal assistant teams making the attorneys more accountable for the
cases and providing for more continuity o f services. However, DCSE i s
forced to work within the constraints of what the Attorney General's
Office desires.
Statutory Changes Are Needed
For Stronqer Authority
DCSE needs statutory changes to arm i t with the authority and control
necessary to operate an e f f i c i e n t and effective statewide c h i l d support
enforcement program. For instance, DES, as the IV- D administrator,
should have authority to determine who provides IV- D services in the
State. In order to make that decision, DCSE should also have the a b i l i t y
to contract with private attorneys or hire their own, i f necessary.
DCSE should have authoritv over who provides services - While we are not
advocating that DCSE operate the entire child support enforcement
program, we be1 ieve that statutes should provide i t with authority to
take control of the program. During our audit, we surveyed several
states and found that many have statutes that mandate county involvement
in the program; some mandate the state's authority over the program as
w e . Specifically, we found seven states that have statutes that
provide clearer direction for county agencies responsible for handling
c h i l d support cases. For instance, in North Carolina, counties that are
currently operating the program are mandated to continue; state operated
units are required to do the same. In California ( where a l l IV- D cases
are handled at the county level), statutes require that each d i s t r i c t
attorney shall be responsible for c h i l d support enforcement. In
addition, while c h i l d support cases may be worked outside of the d i s t r i c t
attorneys o f f i c e s in Michigan and Pennsylvania, the d i s t r i c t or
prosecuting attorney is mandated to appear and prosecute or defend
support cases.
In some states, statutes go even further, mandating the authority of the
IV- D administrative agency. For instance, in California, statutes
e x p l i c i t l y mandate the d i s t r i c t attorneys to comply with any guidelines
established by the state. Moreover, statutes mandate the state's
authority to sanction a county agency, i f necessary, i f the agency is
operating out of compliance with the state plan. In North Dakota,
statutes s p e c i f i c a l l y mandate that the state agency shall " act as the
o f f i c i a l agency of the state in the administration of the chi Id support
enforcement program in conformity with t i t l e IV- D ... and t o d i r e c t and
supervise county administ rat ion of that program.'' Statutes also mandate
that the county agency shall " administer the c h i l d support enforcement
program under the direction and supervision of the state agency in
conformity with t i t l e IV- D."
( 1) The states we selected to survey were based on input provided by state and Federal
IV- D administrators, a member of the national association f o r c h i l d support
enforcement, and an expert i n the f i e l d o f c h i l d support enforcement. These
individuals were asked t o i d e n t i f y states which they considered as having good
programs. I n addition, of those states i d e n t i f i e d , we selected states that had
programs that were operated by a l l counties or where cases were handled by both the
state and some counties. We were interested i n f i n d i n g out how the state IV- D agency
was able to maintain program s t a b i l i t y , accountability and control i n those
situations. States selected were Michigan, Pennsylvania, North Carolina, California,
Mary1 and, Georgia, Iowa, Oregon, W i sconsi n, Tennessee, Alabama, Idaho, and North
Dakota. A l l but one state responded.
DCSE should have the authority to u t i l i z e ~ r i v a t eco ntractors - While the
need to go outside of the public sector for child support enforcement
services may not be necessary, we be1 ieve that statutes should at least
allow DCSE that option. Presently, DCSE has no option for obtaining i t s
own legal services; either the county attorney or the Attorney General's
Office must provide services. In contrast, other states we surveyed have
statutes providing them with options for retaining legal services. For
example, in Iowa, statutes allow the state to contract with a county
attorney, the attorney general, or private attorneys for legal services.
In Idaho, where county participation in the program i s also
discretionary, statutes provide the state authority to use private
counsel .
In addition to providing DCSE with the opportunity to use private counsel
in- house, statutory changes allowing this option could also enhance i t s
abi l i t y to privatize in other areas of the State. For instance, having
authority to obtain IV- D services outside of the county attorney's o f f i c e
or the Attorney General's Office would allow DCSE to h i r e a private
vendor to provide IV- D services in areas of the State where i t has
limited resources to e f f e c t i v e l y manage. One state, Tennessee, has done
t h i s in several areas of the state and has had considerable success with
the program ( see page 33 for further detai I) .
RECOMMENDATIONS
1. The Legislature should enact child support statutes to allow DES to
have the authority i t needs to administer the chi Id support
enforcement program ' 7 a uniform, e f f i c i e n t , and effective manner.
Specifical ly,
statutes should be c l a r i f i e d to mandate the authority of DES as
the IV- D agency, requiring that any p o l i t i c a l subdivisions that
the State contracts with must abide by State and Federal
requirements.
statutes should be amended to provide DES with the option of
contracting with the Attorney General's Office, the county
attorney, or private counsel in order to carry out i t s
responsibi l i t ies.
FINDING Ill
DCSE CAN IMPROVE PRODUCTIVITY AND EFFICIENCY
BY IMPLEMENTING NEW METHODS
AND APPROACHES
Current methods and procedures for working child support cases are often
slow, cumbersome, and i n e f f i c i e n t . I f i t had adequate authority, DCSE
could s i g n i f i c a n t l y improve efficiency and productivity by contracting
out some functions and by u t i l i z i n g more administrative rather than
j u d i c i a l case processing methods. Restructuring work teams and
implementing other operational improvements could also enhance
productivity and efficiency.
Identification Of Model Methods
And Approaches
To determine the most e f f i c i e n t methods for establishing and enforcing
c h i l d support orders, we f i r s t attempted to identify the highest
performing, most productive child support offices both in Arizona and
other states. For in- state offices, we analyzed a variety of measures,
such as amounts collected and numbers o f paternity and support orders
established, and then adjusted these numbers for caseload and s t a f f size
differences. This allowed us to determine which offices tended to
exhibit the highest levels of productivity on a per- worker basis. To
identify other high performing states, we consulted current c h i l d support
enforcement l i t e r a t u r e and child support organizations. For a more
detailed discussion of our methodology, see the Appendix.
We then studied the methods and approaches u t i l i z e d i n these offices,
looking for s i m i l a r i t i e s and differences with methods employed by DCSE.
As a result o f this analysis, we were able to develop a l i s t of methods
and approaches which, i f implemented by DCSE, could potentially improve
efficiency and productivity. While i t i s d i f f i c u l t to determine the
extent to which these methods account for higher performance in other
offices, o f f i c i a l s in these offices view these methods as important to
their success. While some of these methods would require statutory
changes to implement, others would not.
Contractina Out Services And Reducinq
Reliance On The Courts Could
lm~ rove Proaram Performance
Two significant operational approaches used successfully by some other
states could be implemented in Arizona i f DCSE were given s u f f i c i e n t
statutory authority. Other states have demonstrated that contracting out
c h i l d support functions to private vendors can be an effective, cost
e f f i c i e n t , and f l e x i b l e means of operating the IV- D program. In
addition, the use of administrative rather than judicial processing
methods has also been implemented e f f e c t i v e l y in some high performing
states.
Privatization - Contracting out c h i l d support enforcement functions
offers the potential o f improving the cost efficiency of the state chi Id
support enforcement program. Other states have contracted with private
vendors to assist in a number of ways:
Establishment of paternity and s u ~ p o r t orders - Some states contract
out the establishment o f paternity and support orders. For example,
Wyoming has recently contracted this function to a private law firm
for a fixed annual amount of approximately $ 1 mi l l ion. State workers
do most of the preliminary work ( such as locating the non- custodial
parent), and then refer the case to the law firm. According to the
state's program administrator, about 40 percent of the cases referred
now have orders and payments are being received. Alabama also
contracts the establishment o f paternity and support orders to
private attorneys in some of i t s counties.
In hospital proarams - A few states have developed an innovative
approach to establishing paternity at b i r t h . Washington and Virginia
pay local hospital s t a f f to persuade new fathers to legally
acknowledge patern i ty . Wash i ngton pays a $ 20 agent ' If i nder Is fee"
for each signed and notarized written statement acknowledging
paternity. The in- hospital paternity program in Michigan has been
successful in securing paternity stipulations for almost 50 percent
of the children born to unwed mothers at one participating hospital.
Locatina non- custodial parents - Some child su port o f f i c e s contract
with private firms to locate absent parents. For example, in Los
( 1) To aid the IV- D program i n locating non- custodial parents that change jobs frequently
to avoid paying child support, some states have implemented programs that require
employer reporting of new1 y- hi red employees. Employers i n Minnesota are, by law,
required t o withhold child support payments from employees who are subject to a
support order.
Angeles County, California, cases with d i f f i c u l t to locate parents
are contracted out to a private vendor. The vendor i s paid only i f
i t successfully finds information on the non- custodial parent. Fees
vary depending upon the type of information provided. One county
o f f i c i a l estimates that vendor expenditures of less than $ 150,000
have resulted in about $ 400,000 in additional c h i l d support
collections.
Collections - Some states contract with private collections
agencies.(') For example, Georgia has a contract with a collection
agency to work d i f f i c u l t collections cases. The agency i s paid on a
contingency basis, 20 percent of what i t i s able to c o l l e c t . One
Georgia o f f i c i a l said that since i t f i r s t contracted out t h i s
function four years ago, the collections agency has increased
collections every month, and is now collecting about $ 1 m i l l i o n per
month.
In addition, one state has contracted out i t s enti re chi Id support
program in certain regions of the state. In Tennessee, a c h i l d support
enforcement consulting firm was awarded a five year contract to operate
the state's IV- D program within a four- county j u d i c i a l d i s t r i c t . The
state pays the firm 13.5 percent of i t s total col lections. In the f i r s t
11 months of the contract, collections in the d i s t r i c t increased 40
percent. According to i t s IV- D administrator, Tennessee is very
satisfied with the results o f the project. I t has brought in additional
resources, improved performance, and improved public service. The
project has proven so successful that the state recently awarded the firm
a second judicial d i s t r i c t to operate, and has also awarded a contract to
a second f i rm.
Contracting out can provide several advantages, such as f l e x i b i l i t y i n
h i r i n g , training, and compensating s t a f f , that may not otherwise be
possible. In addition, states can avoid up- front costs for s t a f f and
overhead by contracting out on a contingency basis. The firms can be
paid only i f their e f f o r t s result i n c h i l d support collections. Finally,
contracting services can be beneficial to both the state and the
custodial parent since some cases, i f not contracted out, would not be
worked at a l l .
( 1) DCSE has recently signed a contract with two private collection firms to collect
past- due child support on former AFDC cases.
Administrative Drocesses - By u t i l i z i n g more administrative processes,
DCSE could further increase i t s efficiency. Currently, Arizona's program
r e l i e s heavily on the judicial system. Most orders and legal remedies,
including wage assignments, must go through the Clerks of the Court
before they can take effect. Having to go through the judicial system
results in time delays and higher legal costs.
Some high- performing states make greater use of administrative processes
and are less dependent upon the Courts. For example, Oregon has
simplified administrative processes for a c t i v i t i e s such as establishing
paternity and support orders, wage withholding, and intercepting tax
refunds. Caseworkers in Oregon can bypass the judicial system for most
functions.
Greater use of administrative processes has been urged by an organization
which has studied child support enforcement on the national level. In a
recent report to Congress, the U. S. Commission on Interstate Child
Support recommended that states " simplify the child support process and
make i t more accessible by using administrative procedures where
possible."
Statutory changes would be needed to allow DCSE to make greater use of
administrative processes. Under current law, the agency must submit
cases for j u d i c i a l review and processing.
Chancles In Methods Of Operation Could
Increase Worker Productivity
Using existing authority, DCSE could implement a number of other
operational strategies that would improve efficiency and productivity.
For instance, restructuring work teams along functional specializations
would increase efficiency. Consolidating processing steps, p r i o r i t i z i n g
cases more e f f e c t i v e l y , and establishing performance goals and incentives
would further improve productivity.
Caseworker teams - Reorganizing more s t a f f along functional lines and
integrating attorneys into the work units would improve DCSE's efficiency
and ef f ec t i veness .
Some DCSE workers are assigned t o u n i t s w i t h l i m i t e d functional
responsibilities, while other workers must handle a variety of
responsibilities. In i t s central o f f i c e , DCSE has established functional
units for several a c t i v i t i e s including intake, locate, and determining
paternity. The largest group of workers, however, are assigned to units
responsible for establishment and enforcement of chi Id support orders ( E
& E units). Unlike their counterparts in the more specialized functional
units, caseworkers in these units are assigned an alphabetically
organized block of cases and must handle a variety of case processing
a c t i v i t i e s such as assembling establishment orders, i n i t i a t i n g numerous
and diverse enforcement e f f o r t s , and responding to requests from other
states for information and services.
Further, Attorney General representatives assigned t o c h i l d support are
organized separate and apart from DCSE s t a f f . Attorneys are assigned to
one of two u n i t s w i t h i n the Attorney General's Office, and handle cases
on an " as referred" basis.
Many successful offices we contacted, especially those with high
caseloads, reported greater use of specialized s t a f f units. Generally,
the larger the o f f i c e , the greater the specialization. Unlike Arizona,
several successful states separate the establishment from the enforcement
function, allowing workers in these u n i t s t o become more proficient i n
their specialized area. An o f f i c i a l with the Federal Office of Child
Support Enforcement recommends t h i s work u n i t structure. He stated that
c h i l d support enforcement i s complicated and he recommends, at a minimum,
that establishment and enforcement should be divided among s t a f f . One
worker, he said, should not be expected to perform both because " i t i s
too hard to learn both areas." This i s especially true in o f f i c e s which
experience high turnover or where training i s limited.
Better integration of attorneys into work teams i s also evident i n other
states and in higher performing county attorney o f f i c e s i n Arizona. For
instance, in Georgia and Tennessee, each attorney works cases from
i n i t i a l review to completion. In Iowa and Los Angeles County,
California, attorneys are generally assigned to a team of caseworkers.
More successful offices in Arizona a t t r i b u t e some of their effectiveness
to greater attorney involvement. For example, in the Pima County
Attorney's Off ice, the attorneys are considered leaders of the
establishment and enforcement units.
Late in our audit, DCSE developed a proposal to reorganize i t s caseworker
units, and to increase specialization. Establishment and enforcement
a c t i v i t i e s would be separated. DCSE has also reorganized the central
o f f i c e into smaller, regional units which w i l l ultimately be
decentralized throughout Maricopa County. DCSE management believes that
the new structure w i l l improve accountability among workers and provide
more responsive local services to i t s customers. The Attorney General's
Office has indicated that i t may similarly have to reassign attorneys on
a regional o f f i c e basis.
Other o ~ e r a t i o n a l strateaies that should improve ~ r o d u c t i v i t ~ - I n
addition to reorganizing caseworker teams, we i d e n t i f i e d a number of
other operational strategies that should help DCSE improve i t s
productivity:
One- Ste~ Process- By implementing a one step process f o r paternity
and support order establishment, DCSE should be able to increase the
number of cases with court orders and thus increase the number of
paying cases. Currently at DCSEts central o f f i c e , the establishment
of paternity and support orders are performed in two steps, by
caseworkers from two separate units. F i r s t , the non- custodial parent
i s brought in to obtain his acknowledgement of paternity. Second, i f
paternity is acknowledged, the paternity unit refers the case to an
establishment u n i t t o follow- up with the non- custodial parent to
establish a support order.
The two- step process creates a product i v i ty and accountab i l i ty
problem. The potential exists for cases to s i t in the Establishment
Unit for an extended period of time after being referred by the
Paternity u n i t . In some cases, the case may s i t for so long without
any work being performed on i t , that the non- custodial parent may
have to be " located" again before the caseworker can proceed w i th the
establishment of the support order. The opportunity to take
advantage of the " new fathertt mindset diminishes as the case ages
without a support order. Over time, fathers are less l i k e l y to agree
to stipulate to a support order.
P r i o r i t i z i n a cases worked - While Federal regulations require that
a l l cases are to be worked, limited s t a f f i n g resources suggest the
need to focus e f f o r t s on cases with the most potential f o r
col lection. The current p r i o r i t y system used by DCSE s t a f f does not
accurately reflect high and low p r i o r i t y cases. As a result, the
order in which case are presented to case workers does not
necessarily l i s t f i r s t the cases with the most information.
Caseworkers may have to search through their l i s t s to find the higher
p r i o r i t y cases. Offices that we contacted within Arizona and other
states, said they focus thei r resources on cases they consider most
workable. For instance, an o f f i c i a l of the Cochise County Attorney's
o f f i c e stated that h i s o f f i c e does not attempt to work cases with
l i t t l e information on the non- custodial parent. An o f f i c i a l of the
Pinal County Attorney's o f f i c e expressed the opinion that to attempt
to process " unworkable" cases would be a complete waste of time.(')
This p r i o r i t i z a t i o n of work e f f o r t s may have been an important
contributing factor in the success of these county offices in
obtaining support orders. Pinal county leads the State with 36.4
percent of i t s caseload having support orders. Cochise County i s a
close second with court orders on 32.1 percent of i t s caseload.
Other states surveyed also expressed a philosophy of placing e f f o r t s
on only their most workable cases. For example, Colorado has an
agreement with the Federal Office of Child Support Enforcement that
allows i t to close paternity cases in which the mother says the
father is unknown, or there i s insufficient information to locate the
father. In another state, cases l i k e this are opened and closed
immediately in the hard copy f i l e . These cases are not put on the
computer system.
While there is a potential for audit penalties for not adequately
working cases, several child support offices both in Arizona and in
other states, indicate that they rarely pursue "~ nworkable'c~ a ses.
Performance aoals/ incentives- Setting performance goals and
standards on a regular basis would also increase s t a f f productivity.
Having clearly defined and well communicated performance goals i s
essential to increasing and maintaining a high level of
productivity. Many agencies, both public and private, use
performance measures and goals as a means of improving their
programs. Several of the other State c h i l d support offices we
contacted indicated that they use performance goals as a means of
increasing productivity. These goals can be set and tracked at the
o f f i c e and individual worker level.
Although DCSE management currently sets projected goals for the
overall organization in their quarterly reports, these performance
goals are not always communicated down to the supervisors and s t a f f
who are expected to achieve those goals.
( 1) Examples of cases considered " unworkable" would include those i n which the mother
provides no information on the i d e n t i f y of the father, or where a non- custodial parent
l i v e s on an Indian reservation. The State courts do not have j u r i s d i c t i o n over the
reservations and cannot enforce order or serve process on people who l i v e and work on
the reservations.
However, a recent experiment with s e t t i n g goals for line s t a f f in
each State o f f i c e in Arizona demonstrated the effectiveness of
performance goals. In June 1992, DCSE management set a goal of
issuing 500 wage assignments on cases that were not receiving
payments. Not only did the offices involved meet the goal, they
exceeded i t by 49 percent. This was a significant improvement over
the 277 wage assignments issued in May.
In conjunction with performance goals, some c h i l d support offices
across the country u t i l i z e performance based incentives to further
encourage productivity. Proponents of using monetary incentives
argue that having incentives has been beneficial f o r the offices that
have such programs. For instance, Georgia obtained special
permission from i t s State Personnel and Attorney General's o f f i c e to
implement a monetary incentive program for i t s employees. It was the
f i r s t government program of i t s kind in the nation. Under the
program, each employee on the c h i l d support team may earn between
$ 500 and $ 1,000 in extra pay every six months. The amount awarded i s
based on the percentage by which goals are exceeded. The program is
credited with generating an additional $ 36.6 m i l l i o n in collections
over projected goals.
Public relations - A more aggressive public relations campaign could
benefit both the parents involved in the IV- D program as we1 l as
DCSE. Currently, DCSE provides very limited information to the
custodial parents that are receiving agency services. In addition,
open communication with the non- custodial parent i s not always
encouraged. For instance, DCSE policy forbids discussing financial
information with alleged fathers in paternity cases u n t i l paternity
i s established. One could argue that t h i s creates an adverse
relationship with fathers. By contrast, County Attorney operated
o f f i c e s do not follow this policy. One County Attorney o f f i c i a l
commented that he openly communicates with fathers to obtain their
cooperation.
In addition, other offices publish detailed brochures explaining the
c h i l d support process, defining common terms, and providing the
reader with expected time frames for case processing.
Informing the public about services provided by the program may help
reduce the number of phone calls from angry parents wanting to know
the status o f t h e i r case. With better communications, the agency may
also enjoy increased cooperation from both parents, which would
ultimately expedite the child support process.
Telecomnunications technoloqv - Finally, DCSE should consider
implementing additional telecommunications technology to reduce the
number of interruptions to casework. DCSE has taken measures to
reduce interruptions in most State run offices by routing c a l l s to
lnqui ry s t a f f , or designating part of the day as " protected time".
During " protected time" workers do not receive cal Is from the pub1 ic.
Despite these e f f o r t s , incoming c a l l s are frequently cited as a
source o f interruption to casework. Responding to these calls
overrides standard procedure and assigned case p r i o r i t i e s .
Other states have addressed this problem by implementing an automated
telephone system that allows clients t o d i r e c t l y access status
information on their case.
RECOMMENDATIONS
1. The Legislature should consider amending c h i l d support statutes to
allow DCSE to improve i t s efficiency and effectiveness. Specifically,
Statutes should be amended to permit DCSE to contract out more
extensively with private vendors.
Statutes should be amended to allow DCSE to establish paternity
and support orders, and to enforce orders by administrative
process, removing the need for court approval.
2. DCSE should consider the following methods to improve the overall
efficiency and effectiveness in establishing and enforcing c h i l d
support orders:
Continue e f f o r t s to reorganize caseworker teams into more
specialized areas and explore ways to integrate attorneys more
closely into the caseworker teams.
Implement a one step process for the establishment of paternity
and child support orders.
Reviewandmodify thecurrent p r i o r i t y s y s t e m toensure that the
most workable cases are given highest p r i o r i t y . Consider
obtaining approval from the Office of Child Support Enforcement
to close " unworkable" cases and focus attention on cases with
the highest probability of success.
Establish and monitor performance goals on an o f f i c e and
individual level, as well as at the State level. Pursue the use
of incentive programs to motivate and reward s t a f f for high
performance.
Increase public awareness and cooperation through aggressive
media campaigns that: inform custodial parents of services
available and legal time frames that they should expect;
encourage the cooperation of, and communication with the
non- custodial parent; and provide information regarding
non- custodial parents' rights and obligations under the law.
Reduce interruptions to casework by further r e s t r i c t i n g incoming
phone c a l l s to caseworkers and referring those c a l l s to customer
inquiry s t a f f . An automated phone system should be considered
to provide callers with case status information.
FINDING IV
DCSE COULD RECOVER MORE OF ITS
ADM INlSTRATlVE COSTS
DCSE should pursue a more aggressive program to recover the cost of
handling non- AFDC cases. Studies reveal that in most non- AFDC cases,
individuals receiving IV- D services can afford to pay for them. However,
many states, including Arizona, do l i t t l e to recover the costs of
handling these cases. Other states have shown that higher recovery rates
are possible without placing an unfair burden on either parent or the
taxpayer.
When Congress mandated states to provide services to non- AFDC families,
i t also provided provisions that allow state IV- D agencies to recover
administrative costs for handling those cases. In addition to charging
certain fees, such as an application fee, states can recover any costs
incurred in handling the case to cover administrative costs. A state
which elects to recover costs must adopt an approach and then collect on
a consistent case- by- case basis. The state has the option of recovering
costs from the non- custodial parent or from the custodial parent, either
d i r e c t l y or from the support collected on behalf of the custodial parent.
IV- D Service For Non- AFDC Clients
Are Subsidized Bv Tax~ avers
Recent attent ion has been focused at the Federal level regarding the
a b i l i t y of non- AFDC clients to pay for IV- D child support enforcement
services. Both the United States General Accounting Office ( GAO) and the
Federal Office of Health and Human Services ( HHS) conclude that while
many non- AFDC c l i e n t s are capable of paying for the services they
receive, taxpayers end up paying for most of the cost to provide the
services to these individuals. While Congress may have i n i t i a l l y had
concerns that such individuals were on the verge of welfare dependency,
s t a t i s t i c s reveal otherwise. The 1989 census data analyzed by GAO
indicated that, for the most part, non- AFDC clients are not in jeopardy
of welfare dependency and can, therefore, a f f o r d t o pay for the services
they receive. For instance, of the 617,962 women, age 15 years and
older, that had requested child support services in 1989, about 53
percent had incomes, excludinq child support received, exceeding 150
percent of the Federal poverty level. Moreover, 21 percent of those
individuals had incomes ( again, not including chi Id support) exceeding
300 percent of the poverty level. Despite non- AFDC c l i e n t s ' a b i l i t y to
pay, 37 states recover less than two percent of their costs for handling
these cases.
Arizona Current lv Charaes Few Fees And
Recovers Less Than Two Percent Of Costs
Similar to other states, we found that Arizona, while charging some fees,
has continually recovered less than two percent of i t s costs for handling
non- AFDC cases. Currently, DCSE charges fees to intercept tax refunds,
to pay for blood tests to determine paternity, to locate a non- custodial
parent ( when no other services are requested), and to process support
payments. However, i t does not attempt to recover costs for other
functions i t performs, such as enforcement actions ( i . e . liens,
garnishments, etc.), support order modifications, or preparation of
paternity establishment documents. Additionally, i t has chosen not to
charge an application fee to non- AFDC custodial parents that apply for
chi Id support enforcement services .( I)
Like many other states, however, Arizona recovers only a small percentage
of i t s costs. Table 4 reveals that since September 30, 1990, DCSE has
expended an es t i mated $ 23.5 m i l l i on for non- AFDC cases, wh i l e recover i ng
an estimated $ 330,000 of i t s costs.
( 1) While Federal regulations allow states to charge up to $ 25 f o r an application fee,
DCSE has chosen to pay the Federal government $ 1 out of State funds for every new
non- AFDC case opened. ( I n f i s c a l year 1991- 1992, there were 5,410 new non- AFDC
cases). I n contrast, a non- AFDC c l i e n t might expect to pay $ 50 to open a case with a
private law f i n . And, when c h i l d support payments are made, pay 33 t o 40 percent of
the c o l l e c t i ons received .
NON- AFDC COSTS RECOVERED FOR
FEDERAL FISCAL YEARS ENDED
SEPTEMBER 30, 1990, 1991 AND 1992( a)
( unaudited)
Fiscal Fiscal Fiscal
Year 1990 Year 1991 Year 1992 Total
Non- AFDC Expenditures $ 8,714,683 $ 7,018,951 $ 7,789,732( a) $ 34,523,366
Expenditures Recovered $ 104,339 $ 132,439 $ 92,286( a) $ 329,064
Percentage of
Expenditures Recovered 1.2% 1.9% 1.2% 1.4% e
( a ) Fiscal year 1992 information i s estimated based on doubling the f i r s t six months data.
Source: Federal Office of Child Support Enforcement s t a t i s t i c s for
Federal Fiscal Years 1990 and 1991; and, Auditor General
estimates using DCSE procedures and s t a t i s t i c s for Federal
Fiscal Year 1992 ( year to date).
DCSE Should Do More To
Recover Non- AFDC Costs
By implementing methods used in other states, Arizona could s i g n i f i c a n t l y
increase i t s cost recovery potential. In fact, there are currently two
proposals to Congress recommend i ng more aggress i ve pursu i t of non- AFDC
expenditures on a national basis.
Other states pursue cost recovery - GAO's report s p e c i f i c a l l y i d e n t i f i e d
four states that recover a much higher percentage of their non- AFDC
administrative costs. For instance, New Mexico and Arkansas have adopted
programs that recover costs from the support collected. New Mexico uses
a service fee schedule with a $ 450 maximum. Costs are incurred as
services, such as locate and paternity establishment are provided. New
Mexico recovers these costs by deducting 10 percent from a l l collections
u n t i l a l l costs are recovered or the lifetime maximum i s reached. In
addition, i t charges a $ 4 monthly fee for processing c h i l d support
payments collected. Through these fees, New Mexico recovered about 13
percent of the administrative costs for the year ended
September 30, 1990. For the same period, Arkansas recovered about 14
percent of i t s non- AFDC costs using a fee schedule based primarily on the
amount of time spent by attorneys working cases. As costs are incurred,
Arkansas deducts a maximum of 13 percent from collections u n t i l a l l costs
are recovered. Included in these costs i s a $ 9 monthly processing fee.
Unlike New Mexico, Arkansas does not have a maximum recovery per case.
The methods used in both New Mexico and Arkansas are not prohibitive to
applying for IV- D services because the custodial parent does not incur
any up- front costs.
Two other states, Michigan and Ohio, take an approach that is less
burdensome to the custodial parent. Instead of taking a portion of the
support received by the custodial parent, they charge the non- cusiodial
parent a fee. This fee is added to the amount of child support owed,
placing the cost of the service on the person creating the need for the
service. For example, Ohio charges non- custodial parents two percent of
col Iections. Thus, i f the non- custodial parent i s ordered to pay $ 100
monthly, he or she must remit $ 102 monthly. Using this method, Ohio
recovered approximately 48 percent of i t s administrative costs for the
year ended September 30, 1990. Michigan, on the other hand, charges a
f l a t fee of $ 2 per month to the non- custodial parent. It recovered about
26 percent of i t s administrative costs for the same period.(')
( 1) The higher percent recovered i n Ohio and Michigan can be p a r t i a l l y attributed to the
f a c t these states, unlike Arizona, handle both T i t l e IV- D, which includes both AFDC
and non- AFDC cases, and non T i t l e IV- D child support cases. Inclusion of non- IV- D
cases may very l i k e l y increase the number of paying cases and thus, increase the
amount of fees collected.
Using methods similar to those u t i l i z e d i n the above mentioned states,
Arizona could substantially increase i t s cost recovery potential. For
instance, i f Arizona recovered a percentage s i m i l a r t o New Mexico and
Arkansas ( i . e . approximately 10 percent), a savings of over $ 770,000
could be realized for taxpayers. I f the Ohio system were u t i l i z e d for
non- AFDC cases, Ar i zona cou Id recover approximately $ 625,000.
Federal aqencies recomnend more aaqressive ~ u r s u i t of cost recoverv -
Both GAO and HHS, recognizing the need for greater use of cost recovery
methods, have proposals to Congress recommending l e g i s l a t i v e action to
mandate cost recovery. Based on i ts recent findings, GAO has recommended
that Congress amend T i t l e IV- D to require states to charge a minimum
percentage service fee of each successful c h i l d support collection and
eliminate mandatory non- AFDC application fees and optional state and
federal tax refund offset fees. GAO and c h i l d support administrators
from various states believe that t h i s method of recovery i s simple to
administer, does not discourage participation due to up- front cost, and
would not impose a financial burden on c l i e n t s , because fees would only
be collected when child support payments are received.
In contrast, HHS recommends an alternative method of increasing cost
recovery. Because of increasing non- AFDC caseloads and expenditures, HHS
proposes a mandatory $ 25 application fee and a $ 25 annual fee for
collection services provided. HHS believes that the current non- AFDC
population has the a b i l i t y to pay for services and that a f l a t rate
application and service fee would provide a simple and equitable way to
charge c l ients.
RECOMMENDATION
DCSE should pursue a much more aggressive policy of cost recovery for
non- AFDC cases. Of the approaches available, i t should consider those
least burdensome on the custodial parent.
OTHER PERTINENT INFORMATION
During the audit we developed other pertinent information regarding the
development of Arizona's comprehensive statewide automated system
( Ar i zona Track i ng and Locat i ng Automated System - ATLAS).
The Develo~ rnent Of ATLAS
The Family Support Act of 1988 mandates that every state have a
c e r t i f i e d statewide automated child support enforcement tracking and
monitoring system in effect by October 1, 1995. To assist states in
meeting this requirement almost a l l of the funding for the system ( 90
percent) i s paid by the Federal government.( 1) However, funding
provided by the Federal government can only be used to acquire a single
system that meets mandatory functional requirements and that i s used by
every p o l i t i c a l subdivision that works IV- D cases in the state.
I n t o t a l there are over 290 specific functional requirements that must
be f u l f i l l e d for c e r t i f i c a t i o n . The system must be capable of
exchanging information with several other state computer systems, post,
d i s t r i b u t e and record a l l child support collections, and generate a
detailed h i s t o r i c a l record of a l l case a c t i v i t y statewide. Failure to
meet c e r t i f i c a t i o n standards could result in sanctions for noncompliance
with Federal regulations, which could ultimately impact funding of the
State's AFDC and c h i l d support programs.
Chronoloqv of Arizona's automation e f f o r t - P r i o r t o the enactment of
the 1988 Family Support Act, Arizona began i t s development of an
automated child support system. Early e f f o r t s t o provide some
automation for Arizona's child support program resulted in one system to
log cases and another to handle payments. Both systems are currently in
use but neither was designed to f u l l y automate child support services or
( 1 ) Funding f o r systems development and imp1 ementati on expi res September 30, 1995.
meet Federal requirements for complete automation. Two attempts by the
Department to provide a comprehensive system f a i l e d , prompting the
Federal government to suggest that Arizona consider transferring in an
existing system from another state.
Therefore in 1988, DES evaluated 15 other state systems and eventually
selected and received approval to transfer- in the ldaho system. Idaho's
system was selected mainly for i t s user friendliness, strong financial
account i ng subsys tem, automated check wr i t i ng and rece i pt i ng capab i l i ty ,
and c o m p a t i b i l i t y w i t h other DES systems. I t was determined that the
system would be implemented in two phases. In the f i r s t phase, basic
data would be entered onto the system, such as names, addresses,
employers and payment history. Phase I would begin with a p i l o t county
( Mohave) where the system would be f i r s t used and tested to get any
computer program errors out of the system prior to implementation
statewide. Phase I I a c t i v i t i e s were reserved for changes needed to bring
the system up to Federal c e r t i f i c a t i o n standards. Included in Phase II
are modifications such as the capability to automatically assign cases to
individual caseworkers as well as a l e r t them to the immediate actions
that must be completed. In addition, interfaces w i l l allow the system to
automatically place liens and garnishments on assets belonging to the
non- custodial parent.
However, after selecting the ldaho system, DES encountered d i f f i c u l t i e s
implementing i t in Arizona. ldaho never provided documentation needed to
completely set up the system. A t the same time, DES determined that in
about 42 percent of the cases the payment history ( which shows how much
money has been co l l ected and what i s st i l l owed) was i naccu rate and wou l d
need correcting before entering the cases on the system.(') Delays in
documentation acquisition, and the need f o r financial reconciliation
forced DES to request approval to extend Phase I. As a result the
Federal o f f i c e deferred additional funding u n t i l conversion in the p i l o t
county was completed.
( 1 ) Financial r e c o n c i l i a t i o n i s being completed a t t h i s time by the MAXIMUS c o n s u l t i n g
f i r m a t a c o s t of $ 49.20 per case.
In early 1990, because of the lack of progress in completing Phase I, new
management was brought in to r e v i t a l i z e the project. A few months later,
the project team completed system testing, case conversion, and activated
the p i l o t county.
Although the project was beginning to see some results, outside reviews
of the system's capability noted serious deficiencies. In 1990 a Federal
compliance review o f project management, financial management and system
c a p a b i l i t y ( f u n c t i o n a l i t y ) was conducted. While the review found that
project management and financial management appeared adequate, the review
concluded that the system seemed to be deficient in i t s a b i l i t y to
interface with al l necessary systems within organizations ( AHCCCS,
Department of Revenue, Bureau of V i t a l S t a t i s t i c s etc.), to locate absent
parents, and to monitor delinquent payments.
A second comp l i ance rev i ew was conducted in 1991 . The review again
concentrated on project management, financial management, and system
functionality. The review findings indicated that overall project
management had improved s i g n i f i c a n t l y and financial management was
adequately monitored. However, the system s t i l l required a great deal of
manual intervention and did not meet c e r t i f i c a t i o n standards in many
areas such as case i n i t i a t i o n , case management and enforcement.
Current status of the ATLAS Proeram - When ATLAS conversion i s completed,
the total number of cases is projected to exceed 250,000. To date, 14,
of 15 counties, and over 220,000 cases, have been converted to ATLAS.
Phase I conversion i s scheduled for complet'ion by December 31, 1992. The
second phase of system conversion i s currently underway. Phase II was
o r i g i n a l l y scheduled for completion by March 31, 1994. However, due to
delays in determining Phase I I requirements and h i r i n g a consultant to
complete Phase II, ATLAS administrators estimate Phase II completion by
April 1, 1995.
A n t i c i ~ a t e d benefits of ATLAS - Once both phases of ATLAS have been
completed DES expects to reap substantial benefits:
Increased processing efficiency, data accuracy and i n t e g r i t y
lmproved timeliness in access to current and h i s t o r i c a l information
Timely processing of information
lmproved monitoring of financial a c t i v i t y
lmproved communications between State and county agencies
System f l e x i b i l i t y in accommodating statute changes and reporting
lmproved tracking, aging, and p r i o r i t i z i n g of cases
Ultimately these improvements should help DCSE reduce the number of
non- custodial parents avoiding payment of child support and allow for
more consistent delivery o f IV- D services on a statewide basis.
Barriers to successful completion - While the expectations of the
automated system are high, there are s t i l l c r i t i c a l hurdles that must be
overcome to achieve success:
fund in^ reauirements - Although funding for the project i s currently
capped at $ 28.5 m i l l i o n , DES's funding requests to the Federal
government total $ 32.4 m i l l i o n . And, since DES has yet to secure
actual bids for the cost of completing the system ( Phase I I ), the
potential for needing additional funding is a concern.
Functional reauirements - The functionality requirements that
currently do not exist in ATLAS are both numerous and extensive.
There are a total of 291 functional requirements that the system
must be able to perform to obtain c e r t i f i c a t i o n . According to DCSE
o f f i c i a l s , at t h i s time ATLAS can meet only 20 percent of these
requirements.
Time requirements - DES i n i t i a l l y projected completion of ATLAS
implementation by March 31, 1994. However, recent delays in
determining Phase I I requirements and preparing a RFP for system
completion may make i t d i f f i c u l t to complete the project by the
October 1, 1995 deadline.
Furthermore, a c r i t i c a l point in t h i s process i s obtaining Federal
approval to continue Phase I I. DES must siJbmi t a document to the
Federal o f f i c e outlining fundina and functtonal needs of the system
to complete implementation. I f the Federal o f f i c e does not approve
the document as submitted, further delays may result and could
possibly result in f a i l u r e t o meet the October 1, 1995 deadline.
AREA FOR FURTHER AUDIT WORK
During the course of our audit, we i d e n t i f i e d an issue we were unable to
f u l l y pursue a t t h i s time.
Are payments and distributions ~ r o p e r l vc ontrolled and manaaed?
We performed a limited review of the payments and distributions function
to determine i f i t was properly controlled and managed. Accurate and
timely d i s t r i b u t i o n of payments is v i t a l to ensure that children receive
the court ordered support to which they are e n t i t l e d and that the state
receives the monies i t is owed for public assistance provided to
custodial parents. During our review we examined both the organizational
units and systems that support the payments and d i s t r i b u t i o n function.
The units examined include DCSE's Clearinghouse ( ATLAS), the contracting
Clerks of the Court ( ATLAS), and DCSE's Payments and Distributions
Section ( PADIS).
A t the time of our review, the payments and distributions function was
undergoing a conversion to ATLAS, DCSE's new automated system. Some case
payments were processed through ATLAS, while others were processed
through a predecessor system, the Payments and Distributions Information
System ( PADIS). PADIS is scheduled to be closed out in the spring of
1993 after a l l accounts are loaded onto ATLAS.
A review of the current systems for processing transactions i d e n t i f i e d
some control weaknesses. For example, we found that:
Access to ATLAS and PADIS systems is not adequately control led.
ATLAS and PADIS accounts are not s u f f i c i e n t l y reconciled, in some
cases, current account balances are not available.
Supervision and review of manual distributions i s lacking.
Currently, over $ 3.5 m i l l i o n of undistributed funds are in " suspense"
status awaiting investigation and resolution.
We also found d i s t r i b u t i o n errors occurring within the ATLAS
Clearinghouse and contracting Clerks of the Court. However, because we
did not have time to test a s t a t i s t i c a l l y valid sample of transactions,
we were unable to determine the extent of these errors or what may have
caused them. Examples of errors found include the following:
In one case, an AFDC custodial parent received a $ 71 excess payment.
This money should have been reimbursed to the State for the $ 301
public assistance grant the parent had received for the month.
In another case, the custodial parent should have received a $ 212
payment of monthly support. Instead the payment was applied
incorrectly to arrears owed to the State.
Funds which should have been distributed to the State were instead
forwarded to another custodial parent for six months because workers
misunderstood posting and d i s t r i b u t i o n procedures.
Payments from child support funds have been improperly made to
custodial parents on public assistance in cases where no monthly
c h i l d support payment was received from the absent parent.
F i n a l l y , c l e r i c a l errors were made resulting in receipts being
incorrectly applied to child support payments and State arrears
Federal compliance reviews in both 1990 and 1991 also found that errors
were being made in the d i s t r i b u t i o n o f child support payments.
Once i t i s f u l l y converted to ATLAS, further audit work i s needed to
determine the nature, extent, and causes of problems remaining in the
payments and distributions system.
ARIZONA DEPARTMENT OF ECONOMIC SECURITY
1717 WEST JEFFERSON STREETIP. 0. BOX 6123/ PHOENIX, ARIZONA 85005
Fie Symington
Governor DEC 1 0 1992
Charles E. Cowan
Director
Mr. Douglas R. Norton, CPA
Auditor General
2700 North Central Avenue, Suite 700
Phoenix, AZ 85004
Dear Mr. Norton:
The Department of Economic Security ( DES) has reviewed your office's performance
audit of the Division of Child Support Enforcement ( DCSE). We wish to commend
and thank your staff for their several months of hard work producing this document.
DES agrees with the findings and recommendations contained in the report. We have
attached our specific responses, which contain information we believe will enhance the
accuracy or completeness of the various sections. Overall, however, the work product
produced by your office constitutes an impressive description of the challenges faced by
DCSE.
A climate for improvement has already been established in the Division, and we are
beginning to see the results of previous efforts. Total collections are now projected to
total nearly $ 70 million for SFY ' 93, up from approximately $ 46 million in SFY ' 92.
By the end of the third quarter, we expect to have made 67 staff additions targeted
toward increasing collections. Phase I of the Arizona Tracking and Location
Automated System, ATLAS, will be completed by December 11, 1992, ahead of
schedule, and several improvements to the Phase I system are scheduled for early next
Year.
Because of the almost unlimited potential to reduce state contributions to the Aid to
Families with Dependent Children ( AFDC) Program by increasing state child support
earnings, I have assigned the highest priority to DES efforts to improve the child
support enforcement program. I appreciate your office's efforts toward the same goal.
Please contact me at 542- 4702 or Mike Slattery, Assistant Director, Division of Child
Support Enforcement at 274- 7646 if you have f u r t h e y p s .
\ d /?
Director
CEC: pfh
Attachment
ARIZONA DEPARTMENT OF ECONOMIC SECURITY
Response to the Auditor General's
Performance Audit of the
Division Of Child Support Enforcement
December 8, 1992
Finding I -- Arizona is Failing to Collect More than $ 300
Million in Child Support Payments
DES Response
DES agrees with the finding and recommendations.
Information now available from our automated system
indicates that at least half a billion dollars in IV- D child
support is currently owed to custodial parents in the
Arizona IV- y program, and to the state and federal
governments.
Updated information ( as of December 1, 1992) on staffing and
anticipated revenues is as follows:
TABLE 1
ESTIMATED STATEWIDE STAFFING FOR
CHILD SUPPORT ENFORCEMENT
Fiscal Year 1992- 1993
DES *
Attorney General
County Attorneys
Clerk of the Court
Other
Total
* The DES figure includes Division of
Data Administration ATLAS FTEs
1 Source: ATLAS FNS046 report dated November 7, 1992.
DES Response to the Auditor General's
Performance Audit of DCSE
page 2
ESTIMATED REVENUES FOR CHILD SUPPORT ENFORCEMENT
FOR FISCAL YEAR 1992- 93
( Unaudited)
Federal Share
Federal Match
Federal Incentives
State Share
Appropriations $ 2,842,600
Share of Retained Collections 4,690,200
County Share
Appropriations $ 902,200
Share of Retained Collections 425,000
Total Revenue $ 37,939,100
Although ttArizonalsc ost effectiveness ratio for the last
two fiscal years has been minimal," for the two years
mentioned, 17% and 28% of our costs were for development of
our statewide automated system. Arizonat s cost
effectiveness ratio will jump dramatically when ATLAS is
completed.
While it's true that our " plans to hire additional staff may
not significantly impact the problemtttp rogram statistics
document the fact that adding staff results in increased
collections.
Our plan for a regional office in Maricopa County has
slipped a quarter, but otherwise is still on track.
Finding I1 -- Statutory Changes are Needed for DES to have
Adequate Authority Over the Child Support Enforcement
Program
DES Response
DES agrees with the finding and recommendations. Regarding
the regulatory requirement that a contract be in place
between DCSE and the Attorney General's office, the Attorney
General's staff does not believe the federal regulations
require a contract.
DES Response to the Auditor General's
Performance Audit of DCSE
page 3
Finding I11 -- DCSE Can Improve Productivity and Efficiency
by Implementing New Methods and Approaches
DES Response
DES agrees with the finding and recommendations. The
reorganizations referred to in this section are complete.
Changes are now being made to the ATLAS prioritization
system. The @@ daypull listfW a weekly listing of cases, will
prioritize cases effectively in the near future.
Finding IV -- DCSE Could Recover More of its Administrative
Costs
DES Response
DES agrees with the finding and recommendations. DCSE does
charge a fee of $ 112.50 to access direct enforcement by the
IRS. The Governor's Welfare Reform Task Force recommended
in 1988 against implementation of the application fee,
finding that system establishment would cost more than the
fee would generate. Further, charging a percentage of
current child support as a fee would require legislation.
New information concerning effective cost recovery has
recently been made available by the U. S. General Accounting
Office. DCSE is studying this information, which indicates
that the imposition of certain fees requires federal waivers
from program requirements.
Other Pertinent Information -- The Development of ATLAS
DES generally agrees with the information provided regarding
the development of ATLAS. The following clarifying points
are offered:
Phase I1 will begin with our External Design, which includes
the 291 Federal certification requirements as well as many
added enhancements which will make ATLAS a state of the art
child support system.
Automatic liens and garnishments on non- custodial parent's
assets will require legislation.
DES Response to the Auditor General's
Performance Audit of DCSE
page 4
Time Requirements - Due to the short time remaining before
the certification deadline, ATLAS Project Management has
already initiated some key program changes such as locate
interfaces and further revenue intercepts which will aid the
Phase I1 vendor.
Area for Further Audit Work
DES agrees that further audit work is necessary in the
Payments and Distributions/ Clearinghouse area.
APPENDIX
To determine the most effective methods for the establishment and
enforcement of child support orders, we looked at methods employed by
other, higher performing, child support offices within Arizona and other
states. The recommendations of Finding I l l are the results of
researching current l i t e r a t u r e on child support enforcement and
conducting surveys and interviews of program o f f i c i a l s from other states
and County Attorneys within Arizona. We considered various measures in
identifying the offices which appeared to be high producers.
Comparison of Child Su~ port Offices within Arizona - To identify the
high performing offices in Arizona, we compared each c h i l d support o f f i c e
on the following performance measures:
Dollars collected
Quarterly operating costs per o f f i c e
Percentage o f State's non- AFDC col lections(')
Percentage o f State's non- AFDC caseload
Percent of AFDC recovered through collection of c h i l d support
Number of paternities established
Number of support orders established
In order to make a f a i r comparison between the o f f i c e s w i t h a large
number of s t a f f and those with few s t a f f members, some performance
comparisons were done on a per worker basis ( see Table 5, page A - i i ) .
Only the workers performing a function common to a l l o f f i c e s in the
were included in the staffing numbers used in the comparison.
Fluctuations in the s t a f f i n g levels of the State operated offices were
accounted for in the comparison. County s t a f f i n g levels were assumed to
remain constant at the level specified in the county contracts with
DCSE .
( 1) One way t o evaluate the performance of an o f f i c e i s t o determine i f i t s " Percentage o f
Arizonals Non- AFDC Collections" i s a t l e a s t as high as i t l s " Percentage of Arizona's
Non- AFDC Case1 oad ." These measures i n d i c a t e the extent t o which non- AFDC cases are
successful1 y pursued, r e l a t i v e t o the o t h e r S t a t e o f f i c e s .
( 2) State s t a f f included i n the comparison were those performing the functions o f
p a t e r n i t y and support order establishment, enforcement, l o c a t e , i n t a k e , and c l e r i c a l
support f o r the caseworkers. Supervisors, ATLAS, A d m i n i s t r a t i v e , and Payments and
D i s t r i b u t i o n s s t a f f were not included i n the comparisons because these functions were
not comon t o a l l c h i l d support o f f i c e s i n t h e S t a t e .
TABLE 5
CWARISON STATISTICS FOR ARIZONA
CHILD SUPPORT ENFORCEMENT OFFICES( a)
Year- To- Oate Percentage Percentage Nmber o f W e r of
Total Percentage Percent age of A r i zona * s o f A r i zona * s Paternities Orders Year- Tdate
Collections of Cases With o f AFDC Non- AFDC Non- AFDC Established Established Operating Cost
Q f f i c e t b ) Per Worker Court Orderp Recovered Case1 oad Caseload Collections Per Worker Per Worker
Encanto $ 39,989
Flagstaff 30,265
Ki ngnan 25,129
Y uma 29,628
Saf f ord 62,261
Cochi se 103,909
Gila 20,006
Navajo( c) 244,831
Pima 88,831
P i nal 61.762
? -
A.
A.
( a) Figures i n the table are f o r the t h i r d quarter of State f i s c a l year 1992, except for: " Year- To- Date Operating Cost Per
Workeru, which i s a year- to- date figure through May 1992; " Percentage of Cases With Court Orders", which i s as of July 29,
1992; and " Year- To- Date Percentage of AFDC Recovered", which i s a year- to- date figure through March 1992.
( b) The counties serviced i n the State o f f i c e s are as follows: Encanto: Maricopa, Yavapai , Santa Cruz, and Apache; Flagstaff:
Coconino; Kingnan: Mohave; Yuma: Yuma and La Paz, Safford: Graham and Greenlee.
( c) Navajo County's collections are very high because i t s Clerk of the Court does not have the a b i l i t y to separate the IV- D
collections from the Non- 1V- D collections. They report a l l c h i l d support collections to DCSE. Therefore, Navajo County
should be excluded f rm any comparisons with other o f f ices involvi