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Testimony on State Child Support Enforcement Programs by David Gray Ross
Deputy Director, Office of Child Support Enforcement
Administration for Children and Families
U.S. Department of Health and Human Services

Before the House Committee on Ways and Means, Subcommittee on Human Resources
March 20, 1997

Mr. Chairman and members of the Committee: I want to thank you for giving me the opportunity to testify today on the Administration's recommendations for revamping the incentive system for State child support enforcement programs. The Administration is committed to timely and effective implementation of the new welfare reform law and we view the incentive report as an important early step in our efforts.

The Administration and this Committee are in full agreement that child support is an essential part of welfare reform. It sends a message of responsibility to both parents and is a vital part of moving families toward work and self-sufficiency. Once families have attained independence, child support can keep them from failing back onto public assistance rolls. Child support also acts as a safety net to ensure that single parent families don't need assistance in the first place. We are proud of this Administration's record on child support enforcement and anxiously await the positive results that the new provisions will bring to further meet these critical goals.

President Clinton has made improving child support enforcement and increasing child support collections a top priority. Since taking office, President Clinton has cracked down on nonpaying parents and strengthened child support enforcement, resulting in record child support collections. In 1993, President Clinton proposed, and Congress adopted, a requirement that States establish hospital-based paternity programs as a proactive way to establish paternity early in a child's life. A series of Presidential directives and executive orders has made the federal government a model employer in the area of child support enforcement, directed the Treasury Department to offset child support debts against most federal payments, and sent a strong message through a variety of means, including 'Wanted Lists" in Post Offices and Internet links, that failure to pay child support will not be tolerated. In addition, the Justice Department has intensified its efforts to investigate and prosecute those cases which fall under the Federal Child Support Recovery Act, namely, parents who willfully fail to pay court-ordered child support to children living in other States, where the statutory prerequisites are met.

All together, in FY 1996, $12 billion in child support was collected on behalf of the children of America. This amount exceeded the President's Budget projection of $11.5 billion and represented a 50 percent increase in child support collections since FY 1992. Since FY 1992, the number of paying child support cases has increased by 36 percent. These accomplishments are impressive, but projections on the impact of the new provisions tell us they are only the beginning.

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) includes the tough child support measures President Clinton called for from the start and child support enforcement at the Federal and State levels is being transformed by the these measures. Many States have already taken steps to implement the new federal requirements. Forty-three States have license revocation programs in place. Thirty-five States have recently enacted the Uniform Interstate Family Support Act. And twenty-six States have adopted some form of reporting of new hires.

At the Federal level, we have made great progress in making the expanded Federal Parent Locator Service (FPLS) a reality. We have entered into contracts with several nationally recognized and respected vendors to help us design and develop the expanded FPLS, manage the project and enhance our quality assurance efforts, and assist us with providing training and technical assistance to State agency users.

Finally, as required under PRWORA, we worked with the States to develop a new incentive funding structure that rewards results and submitted our Child Support Enforcement Incentive Funding Formula report to Congress last week. That report is the focus of my testimony today.

Child Support Enforcement Incentive Funding

I am happy to report that since my last appearance before this Committee on September 19, 1996, our collaborative effort with the States to develop a new incentive funding system for the child support enforcement program has been successful. The jointly-developed, revenue neutral incentive funding proposal is tough and would push States to improve performance. This formula will ensure good outcomes for families and has a broad consensus among the States and other child support enforcement stakeholders.

The current incentive funding system is based on maximizing child support collections relative to administrative costs. A minimum incentive payment is made to all States regardless of whether performance is good or poor. Currently, States can run inefficient programs and still receive large amounts in incentives. We all recognize that this does not create a significant incentive for the achievement of program goals. An improved results based incentive system would take into account other measurable program results such as paternity establishment, order establishment, and collections.

Our effort to develop a performance-based incentive system dovetailed with our thriving State-Federal partnership and our effort to become a results-oriented program, as envisioned by the Government Performance and Results Act (GPRA) of 1993. OCSE has completed the 2 year pilot phase of its implementation of GPRA during which we forged a Federal-State partnership that has accomplished much. I would like to briefly highlight our accomplishments.

  • Federal and State partners have developed and reached consensus on a National Strategic Plan with a mission, vision, goals and objectives.

  • Federal and State partners reached consensus on outcome measures for each of the Strategic Plan goals and objectives so that progress can be. tracked.

  • The majority of States have entered into partnership agreements with ACF Regional Offices that detail performance goals, technical assistance initiatives, and a shared commitment to working together.

  • OCSE and the association of State child support program directors have entered into a partnership agreement that emphasizes communication, joint planning, and co-responsibility for improving America's child support enforcement program.

Building on this new foundation of partnership with the States forged during the GPRA pilot, we convened a group of State and Federal partners to meet the Congressional charge to the Secretary of HHS to change the incentive funding system. The workgroup included 15 State and local child support directors and 11 Federal central and regional office representatives. The workgroup met November through January. Of the 14 State directors, 10 agreed to represent not only their own States but also other States in their region. After each workgroup meeting, the representatives consulted with the States in their region and brought that feedback to the next meeting to assure the broadest possible consensus. Progress of the workgroup was also shared with the American Public Welfare Association and advocacy groups.

The workgroup developed an incentive funding formula that rewards States for their performance in five critical areas: paternity establishment, support order establishment, collections on current support, collections on support past due (arrearages), and cost effectiveness. These measures are consistent with the legislated mission of the program and the Strategic Plan and its outcome measures. There is full consensus from State partners that these measures represent the appropriate focus for the program.

The workgroup also established performance standards for each of the measures. These standards would determine the amount of incentive a State would receive for a certain level of performance and reward States for maintaining high performance or making substantial gains in improving their performance. The standards are designed to provide tough but reachable targets for performance by rewarding States with higher incentives as they improve. The standards for the first four measures include a performance threshold. Under this plan, and unlike the current-system, no incentive would be paid unless a State achieves a significant improvement in performance. For the final measure on cost effectiveness, if a State collects less than two dollars for every one dollar expended, no incentive would be paid.

Each State would earn five scores based on performance on each of the five measures. . Workgroup members believed all the measures were important, but the first three measures - paternity establishment, support order establishment and collections on current support -were critical. Paternity establishment and support order establishment are prerequisites of collecting current support, which is essential for family self-sufficiency. Performance on the first three measures could earn a slightly higher incentive than the last two measures -collections on arrearages and cost effectiveness.

The amount of potential incentive payments for each measure available to each State would be based upon a percentage of its own State child support collections -- its 'collections base.' The collection base includes collections in both Temporary Assistance to Needy Families (TANF) cases and nonassistance cases. The collections base also includes collections made for families who were never on assistance. However, we recommend that collections in TANF cases and former TANF cases be weighted double, e.g., every dollar collected counts as $2. Counting collections for incentives purposes in this way accomplishes three objectives:

  • States with large former TANF caseloads would no longer be penalized by a cap as in the current-formula. Many States are moving families off welfare and their success is not being recognized because of this cap under current law.

  • States would have a strong incentive to pursue action on TANF cases and former TANF cases. For these families, child support is critical to achieving independence and not returning to public assistance rolls.

  • Direct savings to State and Federal governments result from collecting child support in TANF cases. Costs of other public benefit programs such as Food Stamps and Medicaid could also be avoided by making collections in these cases.

Because this system would for the first time be performance-based, some States would naturally lose incentives by moving to the new system. To help States prepare for the new system, we recommend that the formula be phased in over two years. For FY 2000, a State would earn half of what it would have earned under the old formula and half of what it earns under the new calculation. In FY 2001, the new formula would be fully implemented. This would give States more time to adjust their programs, budget for any financial impact and improve their performance. Of course, the Office of Child Support Enforcement would continue to work with States to assist them during this transition.

The workgroup was concerned that with the enactment of welfare reform, the child support enforcement program is likely to change dramatically in the next few years. Therefore, the report recommends that the child support program's results and effects of the new incentive system should be reviewed periodically. Limited discretion should be granted to the Secretary of Health and Human Services to make appropriate changes, in consultation with the States, based on the program's actual results and effects every three to five years.

The workgroup's report includes recommendations with respect to other aspects of program funding beyond incentives. We have endorsed the workgroup's recommendations with respect to the incentive formula itself, but have reserved judgment on other aspects of the recommendations because further work may be needed on broader program funding issues.

The work accomplished to present this report through State-federal partnership is representative of past collaboration and the future direction that we will take together to strengthen the program and improve the lives of children.

In conclusion, Mr. Chairman, let me restate:

  • The recommended incentive funding formula, developed in consultation with the States, would reward performance and-remain revenue neutral. It is tough but fair and will lead to positive results for families.

  • The new incentive funding formula would complement the results-oriented State-Federal partnership that has already successfully piloted the Government Performance and Results Act.

  • The Administration is committed to working with States and the Congress to address TANF maintenance of effort issues which may result in costs to the Federal Government due to the potential loss of child support collections.

I want to thank the Committee for your work on behalf of America's children. Their future will be significantly improved because of the new collection tools and other reforms required of States by welfare reform.

For example, we are committed to working with States and the Congress to develop legislation to ensure that State flexibility under TANF does not result in costs to the Federal Government due to the potential loss of child support collections.

Finally, in keeping with the mandate that the new incentive funding formula be cost neutral, we have ensured that the new incentive formula would not cost more than the current formula. During the legislative process, if subsequent cost estimates show that the formula is not cost neutral, adjustments up or down can be made. In addition,. we have indicated in the report that we will work with the Office of Management and Budget and our State partners to develop an automatic adjustment mechanism to -ensure cost neutrality against the current system if the cost estimates prove inaccurate.


We now have the groundwork in place for a more results-oriented management of the National child support enforcement program. We strongly urge Congress to pass legislation on the recommended incentive funding system to allow the child support enforcement program to truly be driven by achieving results for families and children in need of support.

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