Scanners Speed Collections for Child Support

Imaging technology rescues child support payments from Washington state's bureaucratic snarl.

by / January 31, 1998 0
The nation's child support enforcement program is a growth industry. Total collections jumped 80 percent from 1990 to 1995 -- or from $6 billion to almost $11 billion. Yet, as impressive as that sounds, the number of cases also increased over the same period, from 13 million to 20 million, according to the General Accounting Office. The result: The number of cases in which collections are being made has remained the same -- 20 percent.

President Clinton and Congress want to boost the collection rate, so they put tough, new provisions into the Welfare Reform Act that could increase child support collections by $24 billion over the next 10 years. However, one major problem stands in the way: Virtually every state relies on manual labor to process the checks that pour in.

Daunting Task
Child support payments must be distributed within two business days after receipt, according to the Welfare Reform Act. In Washington state, legislation requires all child support checks be deposited within 24 hours. To meet these mandates and process 150,000 checks every month, the Division of Child Support (DCS) would be required to triple its payment processing staff, according to Steve Spitzer, the Division's imaging project manager.

That wasn't the only problem; since the actual checks were used to process payments before they were deposited, the agency could not adhere to basic financial controls -- known as GAAP (Generally Accepted Accounting Principles) -- without drastically slowing down the payment process. Lacking internal controls, DCS found that checks, which moved around to as many as six staff members before deposit, were easily mislaid, while some even disappeared. Besides the 150,000 checks, DCS also receives 60,000 monthly payments via electronic funds transfer.

Deposits were impeded further by the fact that 35 percent of the child support payments ended up classified as "unidentified" and required additional research and staff time before they could be deposited. These problem checks often resulted in delayed payments to custodial parents, some of whom rely solely on child support for income.

Model Search
Unable to hire new staff and with the child support caseload on the rise, DCS badly needed to overhaul its collection system. In 1988, the state centralized its child support payment processing efforts. By 1995, 95 percent of all child support payments made in the state were processed at DCS headquarters.

In 1997, DCS installed the Financial Management Imaging System (FMIS), the first state collection system to combine imaging and workflow to manage child support payments. "There have been other uses of imaging in child support, but not with this slant," said Steve Cesar, chief of policy for the Office of Child Support Enforcement at the U.S. Dept. of Health and Human Services.

FMIS uses six Canon DR 3020 high-speed scanners to convert the checks into digital images, which are indexed and assigned receipt numbers with a database management system from Gupta. The imaging application was built using a toolkit from Diamond Head Software. FMIS was developed by DCS staff and Data Image Systems Corp. with support from the Fresno County, Calif., Family Support Division.

Once indexed, the actual checks are deposited in a bank while the images are routed to the staff for identification. Most of the payments are identified immediately when the worker enters the bank account and receipt number into the computer system. A database search pulls up previous disbursement information that can be imported into the current payment process, which saves keystrokes and time.

For the 35 percent of payments that remain unidentified, FMIS uses a modeling process to quickly narrow the search query. DCS has found that modeling correctly identifies the person for whom the payment is intended with 98 percent accuracy. Most of the unidentified checks are for first-time disbursements; others involve multiple child support payments from a single employer to cover several parents with child support obligations. Whatever the reason, the payments are no longer delayed.

Within 60 days of FMIS becoming operational, DCS was able to make its deposits within the state-mandated 24-hour timeframe. The agency is also in compliance with federal regulations as well as the provisions of GAAP. "We're able to handle 50 percent more payments than we did six months ago using less staff," remarked Spitzer. In fact, the existing staff are able to complete their entire week's workload before Friday, leaving time to accomplish other long-range tasks.

According to Cesar, welfare reform has made the collection process more stringent by exacerbating a problem that goes back to the early days of child support enforcement. "It's a huge relief that [FMIS] works," he said. "It's a wonderful application of technology and has turned around a big problem in child support enforcement."

DCS is currently working on the next phase of automated collections, which involves extending FMIS to the numerous field offices. Soon, child support payments received over-the-counter or misdirected to field offices will be scanned and indexed into FMIS from these remote locations. FMIS will also allow field workers to look up the digital images from their offices. Currently, field workers needing to see a payment must wait days before a microfilmed copy is located, printed and forwarded to them from headquarters.

Future uses of imaging under consideration include digitizing the child support establishment orders. These are currently faxed into DCS by county clerks to set up cases and then faxed back out to field offices. Spitzer is also looking at COLD (Computer Output to Laser Disk), which is another imaging technology that can drastically reduce the paper and labor costs associated with document retention and management. "Our goal," commented Spitzer, "is to have a totally paperless environment."

How soon that will happen remains to be seen, but Washington's success with imaging so far is a sign of hope for other states struggling to operate child support programs under the tough, new provisions of welfare reform.

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