Family Values

After millions of dollars and years of effort, the federal government and states appear to be winning the war against deadbeat parents. Technology has proven pivotal in the struggle.

by / February 11, 2001 0
Child support enforcement, the massive federal, state and local effort aimed at making parents provide financial support to their children, is starting to look like
a winner. During fiscal year 1999 (the latest year with figures), nationwide collections reached $15.8 billion, nearly double the amount collected in 1992, according
to the U.S. Department of Health and Human Services (HHS). More notably, the percentage of single-parent families for whom government has collected support, once a stagnant 20 percent, has risen to 37 percent.

"Theres no question that information technology has improved our ability to collect child support," said Laura Kadwell, president of the National Child Support Enforcement Association and director of Minnesotas Child Support Enforcement Division.

According to Kadwell and others, its not only that technology allows the states to do more with less. "Its because the states have the ability to access a lot of information that identifies the location of parents," explained Robert Williams, president of Policy Studies Inc., a technology-services firm based in Denver.

A national registry of newly hired employees allows states to identify, locate and withhold the wages of deadbeat parents, even those who cross state lines. The registry is one of several tools the federal government has developed as part of its enhanced role in child support under the Welfare Reform Act of 1996. The feds are also withholding income-tax refunds, denying passports to noncustodial par-ents who dont pay support and helping states go after a deadbeats other financial assets, including second cars, stocks, bonds, mutual funds and additional bank accounts.

These federal/state programs aimed at beefing up child-support enforcement are something new. Instead of just telling states what to do, the feds now are working with their counterparts to close gaps in the enforcement program. "Its a big turnaround," said Kadwell. "The feds have done a good job in getting all the databases together that we need to work with."

States have also taken steps of their own to improve the operation of child-support enforcement, but the results have been mixed. The biggest trend has been the consolidated payment center. Rather than have individual counties disburse payments, states have taken over this operation or have outsourced it. Unfortunately, startup problems have led to checks going out late or not at all to families, some of whom have no other means of support. Meanwhile, the statewide systems that are the backbone to child-support enforcement are starting to show their age. Many were built in the mid-90s using mainframe technology. They lack everything from relational databases to graphical user interfaces to Internet access. "Its outdated technology," Williams pointed out. "Some of the state systems are just punting along."

First Mandates, Finally Results

The use of technology to collect child support dates back a dozen years to the Family Support Act of 1988, when Congress mandated that every state had to build a child-support enforcement system. The goal was to have computers help case workers locate noncustodial parents, establish paternity and collect and disburse support money. Since 1975, federal, state and local governments have been working to reduce welfare costs by making noncustodial parents pay a greater share of the support for their families.

With 25 percent of children living in poverty and the number of child-support cases growing, using computers to handle many of the tasks performed by case workers seemed like a logical move. Congress required states to have information systems by October 1995, later extending the deadline to October 1997. With federal financing at 90 percent of the cost, states plunged ahead. But major problems arose when too many states tried to build systems at the same time, stretching to the limit the number of available programmers and project managers who understood how to design and build child-support computer systems.

When the October 1997 deadline passed, eight states, including California, Indiana, Michigan and Ohio, didnt have systems ready. As a result, the feds collected more than $24.3 million in fines the following year. Despite these notable exceptions, the technology began to work. By 1999, $15.8 billion in child support payments was collected, an increase of 10 percent from 1998 and double the amount collected in 1992.

But it wasnt until the Welfare Reform Act put some teeth into the enforcement program, and the federal government began implementing its own technology, that child support really became the program it was intended to be. Welfare reform required states to give child support agencies the authority to subpoena financial, employment and benefit information. At the same time, the feds built a national new-hire reporting system for tracking workers -- and their incomes -- as they move from job to job.

Now, when an employer submits a W-4 form to the state, the information is turned over to the national registry run by the feds. The database contains more than 642 million new hire and wage records, and it can be searched by states looking for information on deadbeat parents and overdue payments. With two-thirds of all support cases involving more than one state, tracking down and identifying who owes what to whom used to be a nightmare. But its not anymore, according to Kadwell. "I can now send a request to withhold income across state lines," she explained. "Without that national directory, I wouldnt know who the person was in the other state."

"What welfare reform did was strengthen, at the federal level, our efforts at locating noncustodial parents," said Donna Bonar, HHS associate commissioner, Office of Automation and Program Operations. "There are many interstate cases, so states are dependent on a telecommunications network. We can facilitate the passing of information."

Proving Their Mettle

Improving how states share information with each other and the feds has led to clear enforcement gains in such states as Montana. With a caseload of 38,000 and an annual collection rate of $50 million, Montana has one of the smaller enforcement programs in the country. But their mainframe system, installed back in 1994, has changed the way child support workers are able to do their jobs, according to Mary Ann Wellbank, administrator of the states child support enforcement division. "We no longer have cases slipping through the cracks," she said.

With the new hire reporting system run by the feds, Montana has been able to match an additional 14,000 names with families requiring support and has collected an additional $1.4 million.

Further west in the state of Washington, the first federally certified system is expected to boost collection efforts by $50 million this year, thanks mostly to technology. By providing electronic links with other agencies for enforcement initiatives, such as drivers license suspension, the Division of Child Support is able to suspend the licenses of parents delinquent in child support payments. Last year, the state received almost $20 million in payments as a result of this single effort.

Virginia, which was second after Washington to receive federal certification, has seen its collection rate rise 15 percent per year for the past five years. Nick Young, director of child support enforcement for the state, attributes these gains largely to computers. "There are just far too many cases for our workers to handle one at a time. You have to have automation or you wont keep up."

Currently, the state has 402,000 child support cases, but that number is expected to swell to 460,000 by 2010. Despite the projected increase, Young knows the number of child support workers employed by the state will remain relatively flat during the same period. As a result, the only advantage he has is to boost worker productivity through automation.

"Weve been able to empower the same number of workers to do more. Right now, we collect $5.43 for every dollar we spend. Thats considered exceptional," he said. "And heres another measure: Last year we collected 69 percent of child support through automated income withholding. We expect it will hit 80 percent soon. No human hand touches that operation."


Rocky Road to Centralized Payments

Part of the welfare reform mandate required states to centralize their child support payment processing systems. Although states could use decentralized systems to disburse payments as long as they didnt cost more or take longer to build, they still had to provide employers a single location in the state to send income withholdings.

Studies show that centralized payment-processing systems are far more efficient, most notably because the consolidation results in data-processing volumes that support the use of more sophisticated technology. States that centralize can afford to use automatic envelope openers, remittance processors and interactive voice response systems to handle large numbers of daily transactions at lower costs. Businesses that employ large numbers of workers also prefer centralized processing, because it means sending income withholding information to one site rather than dozens of sites around the state.

But states have had a mixed record implementing centralized payment systems, and the problems have received a great deal of publicity from the press. Parents in Kansas, Tennessee, Illinois and North Carolina have experienced late or missing checks and toll-free hotlines that are always busy. In some states, checks went out months late or not at all. Other checks had decimal places in the wrong place or were sent to the wrong people.

Some states, such as Illinois, attempted to build a single system by contracting with one county to process payments. Other states outsourced the entire operation to private firms, such as Lockheed Martin IMS, Maximus or Tier Technologies. Whether the systems were launched in-house or contracted out, phased-in or started all at once, delays, mistakes and other problems created difficulties that quickly got out of control. When parents started calling the service centers wanting to know what had happened to their checks, the deluge of calls often swamped the systems.

Thats what happened in Kansas, where the state used to process payments locally in 105 counties, then switched to a centralized system run by Tier. Each month, the state processes 150,000 child support payments totaling $30 million. The new system went live Sept. 29, 2000, and was expected to cut costs by $3 million a year. But problems quickly arose when some businesses continued sending withholding information to counties instead of the state. Software glitches also caused trouble; payments for some recipients were delayed by the errors.

"People panicked and overwhelmed the toll-free number," said Stacey Herman, a spokesperson for the Kansas Department of Social and Rehabilitation Services. While many of the problems were straightened out, some single parents were forced to wait weeks for their checks.

Besides late checks, the biggest complaint in Kansas and other states has been the inadequate support from the centralized call centers. "The wait time [for answering calls] was too long, because the operators were overwhelmed with calls," said Herman.

Ironically, the call centers in Kansas and elsewhere have been installed largely to provide better service in a program that is fraught with human emotion, according to Policy Studies Williams. "States need these centers to respond quickly to the actions they are taking with regard to employment income withholding and seizures of bank accounts."

States are also turning to the Web as a tool for handling some customer-service issues. Williams cited work done in Texas where parents can go online to check on the status of their payments or to find out when a hearing has been scheduled. Unfortunately, too many of the child support systems around the country have

been built with out-of-date mainframe technology, making it difficult to add new features, such as the Web. Other systems lack relational databases or the now-standard graphical user interface. "Many of these systems were not well designed," explained Williams. "They are limited in
how they can handle complex functions."

One of those functions is report management and analysis. Although they are capable of compiling huge amounts of information, state child support systems lack the tools that allow government officials to analyze data for decision support and policy planning. As the current crop of mainframe systems continues to age, making changes becomes harder and harder. "Yet child support is a government program that is constantly changing," Williams said. "States need to plan for system redevelopment involving new technologies."

One thing state officials dont want to do, however, is let technology take over the process entirely. There is technology out there that can automate virtually every aspect of child support and chase down nearly every nickel and dime with ruthless efficiency. But government officials are reluctant to turn technology loose on a problem with such human dimensions. "We dont chase every dollar out there as aggressively as we could," said Virginias Young. "Our spirit and intent is to modify behavior. Its our goal to get both parents to contribute to the well-being of their children."
Tod Newcombe Features Editor