OCSE Testimony - September 19, 1996

STATEMENT 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 

SUBCOMMITTEE ON HUMAN RESOURCES
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES

SEPTEMBER 19, 1996

     Good morning Mr. Chairman and members of the Committee.  As the 
Deputy Director of the Office of Child Support Enforcement, I am 
pleased to appear before you today to talk about the child support 
enforcement provisions in the Personal Responsibility and Work 
Opportunity Reconciliation Act (PRWORA).  Child support is a critical 
component in ensuring economic security for millions of single-parent 
families and I appreciate this Committee's efforts to strengthen the 
program by including the child support enforcement measures President 
Clinton proposed two years ago in this bill.  

      As President Clinton said when he signed the welfare reform 
bill, these Child Support Enforcement provisions "will help 
dramatically to reduce welfare, increase independence, and reinforce 
parental responsibility."  These comprehensive reforms will ensure 
that parents are located to support their children, paternity is 
established when necessary, and child support orders are enforced.  
Over the next 10 years, these measures could increase child support 
collections by $24 billion and reduce federal welfare costs by $4 
billion.  
     
      Under the PRWORA, a case registry and new hire directory will 
be established in every State, with a centralized case registry and 
national new hire database maintained at the Federal level.  States 
will be given access to motor vehicle and law enforcement data to 
locate parents.  Child support agencies will have legal authority to 
order paternity testing and State laws must ensure that the results 
are admissible as evidence of paternity.  Every State will be able to 
suspend the drivers' and professional licenses of parents who do not 
support their children, and the passports of non-paying parents also 
will be withheld.  

     While we have made great strides over the last several years in 
improving child support, it was clear that much more still needed to 
be done, including addressing jurisdictional issues with tribal 
governments and issues involving interstate and international cases.  
The efforts of President Clinton and the Congress in child support 
have begun to have a positive impact.  Collections have increased 40 
percent since President Clinton took office and totalled $11 billion 
in FY 1995.   Paternities established have also increased about 40 
percent to a total of 735,000 last year, including voluntary 
in-hospital paternity establishments under the requirements of the 
Omnibus Budget Reconciliation Act of 1993.  The new child support 
provisions will offer even greater advancements.

     I would like to briefly share with you what we are doing to 
implement our child support enforcement responsibilities under 
welfare reform. Then I will focus my testimony on State Child Support 
Enforcement (CSE) automated systems and program incentive funding, 
the areas in which I understand the Committee is particularly 
interested.
  
OCSE's Welfare Reform Implementation Strategy

     First, February 17, 1995, President Clinton issued Executive 
Order 12953, which declared that Federal agencies would be model 
employers and process child support wage withholding orders according 
to the same standards that private employers were held to, laying the 
foundation for related statutory changes in PRWORA.  A training and 
outreach effort was directed at our sister agencies to familiarize 
them with the Executive Order and prepare them for automated matching  
scheduled in the near future.

     We welcome the child support provisions of welfare reform and we 
are committed to their timely implementation.  Since many of the 
provisions, like license revocation, new hire reporting, and bank 
matching, are based on successful State practices, our job is made 
easier.  In addition, recognizing the similarity of child support 
provisions contained in various legislative proposals, we began to 
work on numerous initiatives to plan for implementation of the 
anticipated requirements.

     In the Spring of this year, President Clinton directed that 
further actions be taken to lay the groundwork for welfare reform.   
This included a pilot of a national new hire program.  The pilot is 
currently underway and matches have already been made of data from 17 
States against lists of non-paying parents.  Over 60,000 cases have 
been matched and forwarded to the appropriate State.  Over 30,000 of 
these matches were AFDC cases.  We are very excited by these results, 
as well as by the information we are gaining which will help guide 
our efforts to develop the national program required by the statute.  

          Many Federal-State Welfare Reform workgroups have been 
formed and have accomplished much preliminary planning for 
implementing the new law, such as a complete review of regulations, 
new hire reporting system design, helping States with enactment of 
needed legislation, and preparing the way for nationwide 
implementation of the Uniform Interstate Family Support Act.  

     We have also undertaken initiatives that focus on challenging 
areas such as enforcing child support against members of the armed 
forces, and in cases involving other countries and American Indian 
tribal jurisdictions.  Staff have been assigned to assist States with 
interstate, international, military, criminal non-support, and Indian 
tribal cases.  These areas are now benefitting from the focused 
attention and coordinating role of Federal staff.  Federal staff are 
providing technical assistance and training, and knowledge about 
effective practices to States.  Implementation of related provisions 
in the statute will be smoother as a result of these activities.

     In addition, a new State and Local Assistance Division has been 
formed to focus Federal staff resources on helping States and local 
jurisdictions assess problem areas and identify resources to enhance 
their efficiency and effectiveness.  Federal-State workgroups on 
training and technical assistance have been working in partnership to 
better match Federal resources with State needs.  This division will 
provide planning assistance and act as a clearing-house for best 
practices and new techniques in child support enforcement.

State Child Support Enforcement Automated Systems

     Automated systems are integral to the efficiency and 
effectiveness of the nation's Child Support Enforcement program.  
Technology allows us to complete millions of transactions involving 
tracking, case processing and collection with speed and accuracy, 
freeing staff to focus on hard-to-collect cases.  Automated systems 
are designed to allow the child support program to keep pace with 
increasing caseloads and limited government resources.

     We have made a sizable investment in the automation of State 
Child Support Enforcement programs.  Over the last 10 years, the] 
Federal Government has provided states with $1 billion in enhanced 
funding for automated systems,  representing 5 percent of total child 
support expenditures.  This investment has already made a difference.  
More than 40 jurisdictions have statewide automated CSE systems that 
are being used in day-to-day child support operations.  While only 10 
of these States' systems have been "certified" as meeting all of the 
automation requirements called for in the Family Support Act of 1988, 
all are providing critical services to States.  

     State child support programs have been transformed by automation 
efforts.  Many States started from ground zero, where caseworkers 
didn't even have access to computers or networks to link county 
programs throughout the State.  In States with county-operated 
programs, there often was no standardization of child support program 
and policies.  Prior to automation requirements, case files were 
often buried in dusty county courthouse basements and if someone had 
to work on a case, he/she had to manually retrieve the case file.

     Automation efforts began in earnest from 1981 through 1988, when 
the Federal government provided enhanced funding for States to 
develop systems to improve the child support enforcement program.  
The Family Support Act of 1988 mandated much more complex and 
comprehensive automated systems.  These systems needed to meet all 
federal requirement by October 1,1995, including incorporating all 
IV-D cases in the state and training all workers to use the system.  
Many of the problems encountered were associated with converting 
paper child support files to an automated format.  This costly and 
time-consuming conversion process required file review, research, and 
data collection; it often involved tracking down court files and 
reconciling and updating financial and arrearage data.  Much of the 
effort was in ensuring consistent and standardized child support 
procedures within a State. 

     The Family Support Act requirements have brought us to the point 
where child support workers have computers on their desks and cases 
have been converted to an electronic format.  These systems provide 
the foundation for meeting the reforms of the new law.  The 
additional time congress provided in the recent extension of the 
Family Support Act certification deadline to October 1, 1997, is 
allowing States to conduct critical testing, piloting, training of 
staff, and conversion of cases.  
  
     As I indicated, the system enhancements called for in the 
Personal Responsibility and Work Opportunity Reconciliation Act build 
on the assumption that States have already completed the work of 
creating a computer infrastructure and the conversion of paper files 
to an automated database.  The investment of additional enhanced 
funding is critical to allowing all States to move to the next level 
of automation, including centralized child support collections and 
disbursement.  This will enable States to use technology more 
effectively, to monitor cases more efficiently, and to do proactive 
matching of entire caseloads for location, establishment, and 
collection.  

     In short, the next steps of automation provided in welfare 
reform are mass case processing and administrative enforcement 
remedies -- thus freeing the caseworker from handling the routine 
cases and allowing her/him to tackle the most difficult cases.  
Computer matches can be run at night against other State records, 
such as unemployment compensation, workers' compensation and other 
State benefits, as well as financial institution records and new hire 
data.  The system will generate the matches and automatically print 
out the attachments or wage garnishments to be mailed in the morning.  
As we continue to work with States to improve their systems, we will 
also focus on privacy concerns associated with these types of 
activities. 

     Centralized collection and disbursement capabilities mandated in 
the new law will also allow States to make use of economies of scale 
and modern technology found in many businesses --such as high speed 
check processing equipment, automated mail and postal procedures, and 
automated billing and statement processing. 

     Finally, with the introduction of a potentially greater tribal 
role in the child support enforcement program, we are aware of the 
special needs of tribes related to automation.  We will work closely 
with tribes wishing to take advantage of the new authority in their 
planning for automated child support enforcement systems.

     I will now turn to the second issue the Committee has expressed 
an interest in discussing:  incentive financing.

Program Incentive Funding

     The PRWORA seeks to change the current system of incentive 
funding to States which is based on maximizing current year child 
support collections (especially those for welfare cases), while 
restraining administrative costs.  There is no disagreement that the 
current system does not create a significant incentive for long-term 
investment necessary for the achievement of program goals and is in 
need of improvement.  

     Under current law, a minimum incentive payment is made to all 
States, regardless of whether performance is good or poor.  States 
can run inefficient programs and still make a profit.  An improved 
results-based incentive system, like that envisioned in the 
legislation, would take into account other measurable program results 
such as paternity establishment, order establishment, collections and 
cost efficiency.  A better incentive system might also reward the 
States with the best and most improved performance in these areas.  

     The PRWORA requires that we work with the States to develop a 
new incentive funding structure that rewards results and to submit a 
report to Congress by March 1, 1997.  This does not allow much time, 
but I am happy to report on the success we have had in laying the 
foundation by reviewing measures that might be used in changing the 
incentive payment system.

     As you are aware, OCSE was designated as a pilot for the 
Government Performance and Results Act of 1993.  OCSE is just 
finishing up the two year pilot phase of its implementation of GPRA 
and is reviewing with the Executive Branch the successes and problems 
associated with that effort.  During the pilot we have been working 
with States to look at many issues, including;

     *    A National Strategic Plan with a mission, vision, goals and
          objectives.
     
     *    Some options for outcome measures for Strategic Plan goals
          and objectives so that progress can be tracked. 
     
     *    35 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 are, as I speak, drafting an outline for a 
          partnership agreement that will emphasize communication, 
          joint planning, and co-responsibility for improving 
          America's child support enforcement program.

     These activities have provided the building blocks to move to a 
more results-oriented management of the national child support 
enforcement program.  

     A Performance Measures Workgroup was formed with representatives 
from HHS central and Regional offices and State and local child 
support agencies.  During the past 18 months this workgroup has met 
six times and drafted and redrafted proposed outcome measures, which 
are still under review.  During drafting, the workgroup was mindful 
of pending welfare reform legislation and hoped its work would be 
useful in identifying changes to the incentive funding system.  
     
     We are now coordinating a group of State and Federal partners to 
develop a proposed incentive funding system for the report to 
Congress.  We are already in agreement that some key indicators from 
the outcome measures developed for the Strategic Plan will be 
reviewed for potential use in a new incentive funding formula.  I am 
confident that with the progress we have made together, we will be 
able to offer to the Congress our vision of a results-oriented 
incentive funding system by March 1, 1997, that does not increase 
incentive payment outlays, as required by the statute.       

     We are committed to working with our State and local partners to 
improve their programs and to ensure that we will witness the 
anticipated benefits of the new legislation. 
 
Conclusion

     In conclusion, Mr. Chairman, let me restate three key points:

     *    Efforts to implement the child support provisions of PRWORA
          began long ago, with State and Federal partners working 
          closely on a number of fronts including new hire reporting, 
          enactment of State legislation, and regulatory reinvention.

     *    The Federal investment in State child support automated
          systems is paying off.  States are benefitting greatly and 
          moving towards federal certification of their systems.  

     *    OCSE and its State partners are working to develop a new
          incentive funding system that will move the national child 
          support enforcement program to results-oriented management 
          by rewarding performance.

     Again, I want to thank this Committee for giving me the 
opportunity to testify today, and look forward to working closely 
with this Committee in the future as we implement these critical 
changes to the child support program.  I would be happy to answer any 
questions you may have at this time.