20th OCSE Annual Report

• Establish paternity for 903,000 children, an increase of 77 percent since fiscal year 1992*;
• Establish 1,051,336 support orders;
• Locate 4,950,112 parents, their employers, income or assets; and
• Collect a record $10.8 billion on behalf of children,a 36 percent increase from fiscal year 1992 child support collections

This report is organized to focus on the constructive steps taken in FY 1995 to serve children better. The CSE program concentrated major efforts in FY 1995 on consulting with State and regional staff in developing a national strategic plan, on reaffirming the government's role as a model employer and on building renewed and improved partnerships with other stakeholders in the child support system. The essence of our partnerships will be a shared strategic vision, joint planning to achieve that vision, and collective development of performance measures focused on outcomes that test our progress. In addition, FY 1995 was a banner year for State adoption and implementation of new hire reporting, license suspension, and interstate legislation, as well as the first meaningful reporting on the progress that States are making in establishing paternities through in-hospital voluntary acknowledgement programs.

9In FY 1995, after a year of intensive work and negotiations, Federal and State child support enforcement authorities reached consensus on a national strategic plan as a pilot under the Government Performance and Results Act.

9Signed into law by President Clinton in August, 1993, the Government Performance and Results Act (GPRA) reforms the way Federal agencies perform. The law requires programs to decide what they want to achieve and report on their performance. When implemented, GPRA will:

9* improve the effectiveness of Federal programs by promoting a new focus on results, service quality, and public satisfaction;

9* systematically report on progress in achieving program objectives as stated in agency strategic plans and annual performance plans; and

9* initiate reform with a series of pilot projects in setting program goals, measuring program performance against these goals, and reporting publicly on their progress.

9By September, 1997, all Federal agencies will develop comprehensive five-year strategic plans that include mission statements and long range goals and objectives the agency expects to achieve. As a "living" document, subject to periodic revision, the strategic plan must be flexible enough to accommodate new legislative mandates and other programmatic changes. At each stage of the document's development and throughout the life of the program, Federal agencies must seek input from the people they serve, from state partners, and from others directly concerned with the program. Agencies' annual performance plans will describe the results they expect to achieve in the coming fiscal year, along with the performance indicators they will use to measure results. Six months after the end of the fiscal year, agencies will report to the public, the President, and Congress on how well they did. Program results at the national level will be tied to budgeting.

9Before implementing GPRA in all Federal programs, the Office of Management and Budget (OMB) is pilot testing GPRA's concepts in over 70 selected Federal agencies during fiscal years 1994-1996. All of the pilot programs are developing five-year strategic plans and annual performance plans by which they will be measured at the end of the pilot period. The Child Support Enforcement Program is one of only four in the Department of Health and Human Services designated by OMB to be a GPRA pilot.

9Under the GPRA pilot project, Federal, State, and local child support or IV-D functions remain the same, but GPRA refocuses and restructures their work toward achieving specific and measurable program results. GPRA activities, conducted by Administration for Children and Families regional offices, and in State and local IV-D offices include strategic planning, performance planning, and special demonstrations. All GPRA activities are coordinated, integrated, and mutually supportive.

9The national strategic plan for the CSE Program underwent several revisions with widespread, thoughtful input from IV-D agency officials, advocacy organizations, custodial and noncustodial parents, vendors to the child support community, and State and local support enforcement workers. Closure on the plan occurred February 28, 1995, during a facilitated national videoconference of IV-D directors and Federal CSE staff. At the final talks, 23 State CSE programs were represented, as nearly 100 Federal, State, and local staff took part in a telephone and videoconference.

9The accomplishment of consensus on the five-year national strategic plan drew spontaneous applause from the group of 25 meeting in Washington, DC. Cecelia Burke, then President of the National Council of State Child Support Enforcement Administrators and Director of the IV-D program in Texas, acknowledged the event as a milestone in Federal and State relations. "For the first time ever," she said, "we have a strategic plan for the whole program. I feel we are moving into a new realm with OCSE, when you consider the magnitude of what we have just accomplished here."

9In accepting the national strategic plan as a working blueprint for the CSE program over the next five years, all IV-D partners--Federal, State, and local--signaled their agreement on the goals and objectives for the program that focused on children having parentage established and financial and medical support from both parents. Leaders noted, however, that current legislative activity may bring substantial change to the program, therefore, the strategic plan is seen as a "living document," flexible with regard to local issues, though still national in scope and open to revision as required by events.

9For FY 1995, OCSE's two measures of successful program results, nationwide, are the total number of paternities established and total child support dollars collected.

9Executive Order 12953 signed by President Clinton on February 27, 1995, established the executive branch of the Federal government, through its civilian employees and uniformed services, as a "model employer" in promoting and facilitating the establishment and enforcement of child support. At the signing, President Clinton described the executive order as "another major step in our efforts to bring the Federal government in line with the basic values of ordinary Americans."

9The executive order requires all Federal agencies and uniformed services to cooperate fully in efforts to establish paternity and child support orders and to enforce the collection of child and medical support in all situations where such actions may be required. The order also requires agencies to provide information to their personnel concerning the services that are available to them and to ensure that their children are provided the support to which they are legally entitled.

9To implement this order,

99The Office of Child Support Enforcement has worked to promote implementation of the order. In April 1995, OCSE and the Office of Personnel Management (OPM) jointly hosted a conference attended by over 100 Federal agencies to facilitate implementation of the EO. Bruce Reed, the Deputy Assistant to the President for Domestic Policy, provided the keynote speech, "Leading by Example: The Federal Government’s Commitment to Improving Child Support Enforcement in the Federal Workforce." OCSE conducted a training workshop for Federal, State, and local staff on the EO at the 5th Annual Training Conference and at the National Child Support Establishment Association (NCSEA) conference and developed an informational video and flyer, "Child Support Information for Federal Employees." In addition, OCSE assigned a staff person to serve as coordinator for the EO and on three occasions OCSE developed messages informing all HHS employees of their obligations under the EO.

9Over the past twenty years, the Child Support Enforcement Program has matured into a public service that puts children first. The record shows continuing program improvements that have earned the program bipartisan support and produced high expectations for the future.

9In 1995, the Child Support Enforcement Program celebrated 20 years of existence. In proclaiming August National Child Support Awareness Month, President Clinton stated, "This program has been instrumental in giving hope and support to American’s children while fostering strong families and responsible parenting." (See A Proclamation in the preface.)

9Speaking on July 12th to nearly 500 child support professionals from across the country at a luncheon celebrating the Child Support Enforcement Program's 20th anniversary, HHS Secretary Donna Shalala paid tribute to OCSE's State and local partners. "You know child support in America," she said to those she called "the real frontline troops."

9"You know the needs of our children. Every day you live and breathe the needs of families for whom the prompt and full payment of child support becomes an issue of survival. You see the anguished faces of parents fighting to go it alone to stay just above the poverty line. You see the confusion, the bewilderment of young children caught in emotional and financial squeeze plays. You know firsthand that child support is about money--for clothing, food, utility bills, day care, school field trips. But you also know that child support is about much more than money. It's about engagement and involvement in a child's life, emotional support, love, and understanding. It's about both parents being a part of a child's life."

9The Honorable Russell B. Long, former Louisiana Senator and the legislative force behind the pivotal 1975 child support enforcement law, also addressed the gathering. Senator Long, warmly received by an audience that included many with keen memories of his contributions, recalled some of the legislative debate that resulted in the new law and a national Child Support Enforcement Program. "I never dreamed," he said, "our efforts would bear fruit of the magnitude I see today."

9OCSE Deputy Director David Gray Ross acknowledged the achievements of his predecessors, many of whom were in the audience, and thanked all of the participants for providing hope and support to America's children since 1975. In addition to the remarks of Secretary Shalala, Senator Long, and Deputy Director Ross, congratulatory messages from President Clinton (see letter on the following page) and former President Gerald Ford were read to the assembled guests. Former President Ford wrote, "...[The Child Support Enforcement Program] is more than the mere savings of welfare dollars. There are now untold numbers of children who have the emotional, as well as financial, support of both parents because...of your efforts and the efforts of those who preceded you."

9The Child Support Enforcement Program is one public service that is clearly focused on results. The program's performance makes a significant difference in children’s lives by locating parents, by establishing paternity and support obligations, and by enforcing those obligations. Thus, the program's performance can be measured and used to track progress toward our goal of assuring that, whenever possible, all children are supported by both parents. As shown below, there is evidence of substantial progress in child support enforcement during the last 20 years.

9In 1976, the Child Support Enforcement Program collected and distributed $693 million in payments. In 1995, the program helped to collect and distribute $10.8 billion in child support, an increase of 1,458 percent since the program began. Administrative expenditures, the cost of doing business, also increased over the same period of time, though at a lesser rate.

9The average yearly increase in distributed collections between 1976 and 1984 was $211 million. After substantial changes made to the program by the 1984 Amendments to the Social Security Act and the 1988 Family Support Act, yearly increases in collections between 1985 and 1994 jumped to more than $749 million. In 1995, the $10.8 billion in child support collections exceeded the estimate in the President's FY 1995 Budget.

9The total IV-D child support caseload grew by 867 percent between 1976 and 1995 from 2.1 to 20.1 million. The average increase in caseload was 740,000 per year through 1984 and 1.1 million per year from 1985 to 1995.

Cases with collections grew at a rate of 581 percent between 1976 and 1995. The yearly average increase in cases with collections was 66,000 cases per year through 1984 and 237,000 per year from 1985 to 1995. The number of absent parents located (including address, employer, assets, or other sources of income) grew at an overall rate of 1,830 percent between 1976 and 1995. The average yearly increase was 77,000 per year through 1984 and 370,000 per year from 1985 to 1995.

9Paternity establishments had the largest increase over the years--2,658 percent between 1976 and 1995. The average increase in paternities established was 24,000 per year through 1984, and 40,000 per year from 1985 to 1995. This is significant because the number of out-of-wedlock births and single-parent households continue to increase.

9While these and many other accomplishments of the child support program are noteworthy, progress in some other areas has been slow. Non-AFDC collections increased by 1,902 percent since 1976; however , AFDC collections have increased at a much slower rate--just over 840 percent during the same time period. In addition, the percent of AFDC payments recovered through child support collections has increased by only 3 percentage points over the last five years and cost effectiveness has most recently, declined in large measure because of capital investment for automated information management systems. Along with the celebration of the many accomplishments of the Child Support Program comes the knowledge that there is still has a long way to go in assuring adequate support for all children.

9In FY 1995, the child support community worked together to build renewed and improved partnerships within the child support system. State and Federal staff worked together to implement paternity acknowledgement programs in hospital and birthing centers and to help close the interstate loophole that has long thwarted effective enforcement by continuing to implement the Uniform Interstate Family Support Act. The Federal Office of Child Support Enforcement worked closely with the Department of Justice to assure that criminal nonsupport charges are filed in the most egregious cases. Federal staff also worked with the States and regions to demonstrate the essential principles of the Government Performance and Results Act of 1993, which is aimed at overall program improvement.

IN-HOSPITAL PATERNITY

ACKNOWLEDGEMENT PROGRAMS EXPANDED

 

 

9States continued to implement the provisions of OBRA ‘93 during FY 1995, including establishing voluntary paternity acknowledgement programs at birthing centers and any hospital that provides obstetric services. The Denver Division of Child Support submitted its final report on the OCSE sponsored demonstration project on in-hospital paternity in September of 1995. The last report, "The Child Support Improvement Project: Paternity Establishment," states that in-hospital paternity interventions can produce dramatic increases in the voluntary acknowledgement rates. Following the introduction of in-hospital paternity overtures to unmarried parents in four Denver hospitals in 1993 and 1994, voluntary acknowledgement rates increased from 13 to 17 percent.

9Thirty-one States voluntarily to OCSE reported statistics on the number of in-hospital paternity acknowledgements signed in FY 1995. As the following table shows, more than 200,000 paternities were established through the in-hospital paternity acknowledgement program in just these States.

9Interstate cases, where the custodial parent and child(ren) live in one State and the noncustodial parent resides in another State, are some of the most difficult and problematic cases, requiring communication and cooperation between States. Interstate processing is governed largely by State law. Until recently, all States had some version of the Uniform Reciprocal Enforcement of Support Act (URESA). The Uniform Interstate Family Support Act (UIFSA) is a new model State law that was designed to replace URESA. In contrast to URESA, UIFSA provides for only one valid support order at a time and for enforcement without the possibility of an unwanted modification of the support order itself. It also contains broad long-arm jurisdiction and direct income withholding provisions.

9The States, with help from OCSE, made great progress in implementing the Uniform Interstate Family Support Act in 1995. State and Federal staffs worked together to develop a new handbook, new forms and instructions, an Interstate Roster Referral Guide, and a training curriculum, all aimed at facilitating prompt and appropriate usage of UIFSA statutes by support enforcement practitioners throughout the country.

9With input from an Interstate Work Group representing Federal, State, and local CSE staff, OCSE drafted and published the Uniform Interstate Family Support Act Handbook. The UIFSA Handbook is a comprehensive desk manual focusing on the new interstate child support enforcement remedy. The Handbook provides step-by-step procedural guidance to assist State and local CSE staff in the transition from URESA to UIFSA. The format was designed to make the handbook easy to update and to share; entire sections are easy to remove and replace.

9Several changes were made to the Interstate Roster Guide (IRG) in order to accommodate UIFSA. The State IV-D Directors were asked to review their State’s current profile and make necessary changes. Minnesota’s training materials were selected as a prototype of the new UIFSA training and curriculum. Minnesota’s materials were modified so that other States can make them specific to their State.

9Several jurisdictions volunteered to pilot the new UIFSA forms and instructions which can be sent to all States, whether they have enacted UIFSA or not. The jurisdictions volunteering to test the pilot UIFSA forms are Alaska, Arkansas, Colorado, Delaware, District of Columbia, Illinois, Kansas, Maine, Michigan (Kent County), Minnesota, Nebraska, Nevada, North Carolina (Scotland County), Oregon, Pennsylvania (Allegheny County), and Texas (San Antonio).

License Suspension and Revocation

9License suspension and revocation as a child support enforcement remedy is considered to be a relatively new initiative, but it is an enforcement tool which has proven to be highly effective and is being adopted in many states and jurisdictions.

9In March of 1995, based on State-supplied data, OCSE reported that the threat of license revocation had raised nearly $35 million in just nine States and the Clinton Administration estimated that enactment of proposed Federal license revocation legislation could increase total child support collections by as much as $2.5 billion over 10 years. As of March, 19 States had programs to revoke professional and commercial licenses, as well as drivers licenses. They were Arizona, Arkansas, California, Florida, Illinois, Iowa, Kansas, Kentucky, Maine, Massachusetts, Minnesota, Montana, Nevada, Oklahoma, Oregon, Pennsylvania, South Dakota, Vermont, and Virginia.

9License suspension and revocation became effective in California in 1992. One success story tells of a case in which an attorney owed more that $140,000 in delinquent child support. The attorney had refused to pay until notified that he would no longer be licensed to practice law if he did not resolve his child support arrearage. He was allowed to continue practicing based on his compliance with an agreement to pay $2,008 per month to pay off the arrearage. Similar successful outcomes have been reported by the other States.

9Often, parents who successfully elude paying their child support change jobs frequently, work intermittently, or work in seasonal or cyclical employment. Clearly, using wage withholding and other enforcement methods with this group is difficult. If the obligor’s employment terminates before the notice to withhold income reaches the employer, or if the information obtained from the quarterly State Employment Security Agency reports is outdated, the IV-D agency may find itself several paces behind the obligor. As a result, there has been increasing interest in the immediate reporting of new hires by employers as an effective means of implementing wage withholding as quickly as possible after an obligor begins or changes employment. Additional States have introduced and enacted legislation to address new hire reporting, modeled after those which have found this procedure to be an effective enforcement remedy.

9In 1995, Florida processed more than one million new hire reports. There were 49,751 matches of obligors with an annual obligation amount of $15.2 million. All employers report new hires in Massachusetts. For fiscal year 1995, Massachusetts estimated that new hire information yielded $15.4 million in increased child support collections and a cost savings of $21.6 million associated with AFDC case closure. Similar successes were reported in Connecticut, Iowa, Missouri, Oregon, Virginia, and Washington.

9Representatives from 31 States and territories cut their Thanksgiving holidays short in 1994 to attend training, sponsored by the Department of Justice (DOJ), on the Child Support Recovery Act of 1992, a law establishing Federal criminal enforcement action for nonsupport in certain cases. Discussion centered on the practical application of CSE prosecution. The audience of 100 for the Criminal Enforcement of Child Support Seminar included representatives from State and county child support enforcement offices and ACF regional offices. They were joined by Assistant U.S. Attorneys and agents of the Federal Bureau of Investigation.

9Much of the seminar was devoted to the "nuts and bolts" of prosecuting a Federal criminal nonsupport case. Sessions focused on the specifics of evidence gathering, how to charge (grand jury indictment, complaint, or information), and where to file (state of residence for obligor or obligee).

9On December 22, 1994, Attorney General Janet Reno, moved quickly to demonstrate DOJ's commitment to tough enforcement of the Federal criminal nonsupport law and announced that some 28 cases seeking almost $1 million in overdue payments had been filed all across the country. In addition, she promulgated a three-point plan aimed at parents who are in default. "We're not just talking about shirking a parental responsibility--we're talking about breaking the law," said Reno. "These 28 cases are only the beginning of our enforcement efforts." Her three-point plan features aggressive investigation and prosecution, effective Federal/State/local partnerships, and comprehensive training for prosecutors.

9In 1995, 748 cases were referred to U.S. Attorneys. Forty-two cases resulted in convictions and courts ordered a total of $1,246,344 in restitution; only one case resulted in a not- guilty verdict. Forty more cases were dropped due to payment of child support obligations. Eighty-one other cases are under indictment or have been filed by information or complaint. The 1995 cases include the highly publicized case of Dr. Frank Bongiorno who was convicted in Massachusetts and sentenced to five-years' probation, ordered to pay $5,000 per month until his $220,000 obligation is paid, and required to spend 12 hours a day for 12 months in a correctional facility. This and other high profile cases are clearly conveying the intended message that child support obligations must be honored.

9For most of FY 1995, State and local CSE programs and the Federal Office of Child Support Enforcement have been practicing the essential principles of the Government Performance and Results Act of 1993 (GPRA). Selected as an OMB pilot project under GPRA, the nation's child support program achieved consensus on a national strategic plan, is setting clear objectives and establishing performance indicators for those objectives, began collecting reliable data to measure their results, and focused on improving customer service. Approximately 30 States are participating voluntarily as GPRA demonstration projects. All the State GPRA demonstrations are working closely with regional offices and headquarters GPRA staff to set objectives, identify performance measures, produce valid baseline data, and measure and report results. Most of the GPRA demonstrations are also designed to increase both paternities and collections.

9A summary of each of the State and Regional GPRA projects can be found in the Appendix. These States and localities volunteered to practice the GPRA principles. Their demonstrations are in various phases of implementation. Despite the interest and initial commitment of States, intervening events, such as workload pressure, change in key officials and resource adjustments, may delay program start-up and completion. However, the greatest benefit continues to be the forging of a true partnership between States, localities, and the Federal government.

9

9In FY 1995, OCSE proposed regulations which removed obsolete provisions and made many technical changes to meet the objectives of President Clinton's regulatory reform initiative. OCSE also worked on preparations for implementing the proposed child support enforcement provisions featured in pending welfare reform bills. Other initiatives in FY 1995 involved outreach, development and dissemination of written materials, and technical assistance to promote best practices, particularly in the areas of Native American, military, and international child support cases.

9President Clinton issued a memorandum March 4, 1995, to heads of Departments and Agencies announcing a government-wide Regulatory Reinvention Initiative to reduce or eliminate burdens on States, governmental agencies and the private sector. The initiative required agencies, by June 1, 1995, to conduct a page-by-page review of all regulations to eliminate or revise those that are outdated or otherwise in need of reform.

9The Notice of Proposed Rulemaking published on January 29, 1996, is OCSE’s initial response to this directive. In addition, the proposed rule reflects action to carry out two recent statutory changes. P.L. 104-35, enacted on October 12, 1995, extends the date by which States will have in effect, and approved by the Secretary, an operational automated data processing and information retrieval system meeting all requirements of Federal law from October 1, 1995 to October 1, 1997.

9In addition, this proposed rule would amend Federal regulations governing procedures for making information available to consumer reporting agencies (CRAs). These provisions implement the requirements of section 212 of P.L. 103-432 which require States to adopt procedures for periodic reporting of information to CRAs, effective October 1, 1995. The Ted Weiss Act of 1992 (Pub. L. 102-537) amended the Fair Credit Reporting Act to require consumer credit reporting agencies to include in consumer reports information on overdue child support when provided by child support enforcement agencies, or received otherwise and verified by any local, State or Federal agency.

9The Assistant Secretary for Children and Families conveyed the President's regulatory reform message at the annual meeting of the National Council of State Child Support Enforcement Administrators held May 8-11 in Austin, Texas. She spoke of the National Performance Review recommendations related to regulatory reform and the President's commitment to follow through on those recommendations. Of special relevance to the regulatory reinvention initiative were discussions of how national program performance measures would be used and recognition that efforts are needed to increase the level of participation/buy-in of some State partners.

9Another outcome of the President's Initiative was a new session at the OCSE conference, "Making Welfare Reform Work," September 13 through 16, 1995, sponsored in cooperation with the American Bar Association. The conference consisted of a series of roundtables where State and Regional Office child support staff, advocates, and private citizens discussed the issues. The sessions on Regulation Reform included an introductory session giving general recommendations to determine when it is necessary to regulate and sessions on Regulatory Reform relating to Interstate Support, Paternity Establishment, Review and Adjustment, Administrative Procedures, and Enforcement.

9In our analysis of existing regulations, we took a cautionary approach recognizing that significant legislation to overhaul the welfare system, including major reform to the child support enforcement program, was actively pending before the 104th Congress. Accordingly, numerous existing rules will potentially be affected. During 1995, we deferred recommending any changes in existing rules which may be impacted by enactment of an incipient legislative change. We anticipate working closely with our partners to identify additional regulations which should be reevaluated given the new direction of regulatory reinvention.

9During FY 1995, welfare reform legislation was a major focus of activity in OCSE as child support enhancements continued to be a cornerstone of the major bills under consideration, including the Personal Responsibility Act of 1995 (the House bill) and the Work Opportunity Act of 1995 (the Senate bill).

9Both of the leading welfare reform bills included child support provisions modeled on those successfully applied by selected States and first offered by the President in his welfare reform plan. Both bills include provisions for the establishment of Federal and State case registries for the improvement of location and enforcement services; requirements for new hire reporting; the establishment of uniform State laws; stricter cooperation requirements; changes to Federal reviews and funding incentives to better reward program improvements; requirements for making the Federal government a model employer for the establishment and enforcement of child support orders; and license revocation, passport restrictions, and other tough enforcement techniques. Overall, they provide for strengthened paternity establishment, tougher child support enforcement, and increased parental responsibility.

9The magnitude of the nonsupport problem, as stated earlier, combined with the sometimes slow process of our current system, make a strong case for the faster improvement and the far-reaching reform that is embodied in welfare reform and child support legislation. These proposals will have a significant and immediate impact on the Child Support Enforcement program. OCSE therefore analyzed and monitored the various proposals as they made their way through the legislative process and began work in framing implementation issues. Reflecting the program's renewed commitment to partnership, critical information was provided to and elicited from key program stakeholders to complement these efforts.

9In FY 1995, the Federal Office of Child Support Enforcement supported the development of special initiatives in child support programs, in particular, relating to active duty military personnel, services to Native Americans, and international enforcement. Approximately 30 video and teleconferences were conducted to consult with regional and State offices to identify issues, assess problem areas, and introduce contact persons to one another. Dialogue and working relationships were developed among CSE staff and professional associations, special interest groups, and other Federal agencies working in child support areas.

9A series of papers were prepared for dissemination on some key emerging issues. These professional papers addressed an enhanced Federal role in international child support enforcement, guidance on dealing with Tribal governments, and overcoming problems for child support agencies when working with the uniformed services. Other articles intended for lay persons were published in the Child Support Report.

9Technical assistance was provided by Federal staff through presentations at various conferences and workshops. In addition to military, international, and Native American cases, these presentations also reviewed other initiatives including license revocation and new hire reporting.

9The Income Withholding Form Work Group, for example, continued its effort to develop a standardized form to use for collecting child support via income withholding. The Work Group completed the task of developing the form called the Order/Notice to Withhold Income for Child. Support. Eleven States: Colorado, Illinois, Iowa, Kansas, Kentucky, Minnesota, North Carolina, Oklahoma, Texas, Virginia, and the District of Columbia are pilot testing the Order/Notice. Employers are interested in using the Order/Notice to eliminate the multiplicity of forms now used to collect child support through income withholding. Several local employers and the Department of Defense are accepting the Order/Notice during the testing period which is scheduled to end in February 1996.

9In FY 1995, the Federal Office of Child Support Enforcement took the lead in developing new performance measures that focus on outcomes and on developing the data and perspective needed to fully implement such measures.9

9On February 28, 1995, OCSE sponsored a national videoconference to provide a forum for IV-D directors to discuss strategic planning and other issues. One important issue was the need to build stronger coalitions among national, State, and local organizations that can bring their weight to bear on child support enforcement efforts. The discussion of coalition building resulted in a workgroup of State and Federal CSE staff being formed to develop performance measures for the entire CSE program, that focus on the goals and objectives developed in the strategic plan.

9The workgroup included members from twenty States, three local jurisdictions, five regional offices, and several different central office components. On March 16 and 17, 1995, the workgroup of CSE partners had its first meeting in Alexandria, Virginia to flow logically from the goals and objectives stated in the national strategic plan. The first draft of the performance measures included indicators for each objective as well as equations for measuring those indicators. For example, goal 1 of the strategic plan is "All Children Have Parentage Established." The objective for this goal is "To Increase Establishment of Paternities, Particularly Those Established within One Year of Birth." During the March meeting, five paternity indicators ( and accompanying equations) were proposed. These ranged from counting paternity acknowledgments in the IV-D caseload to measuring the total percentage of live births in a State with the paternity issue resolved.

9Following the March meeting, the measures that had been developed were circulated to members of the workgroup, as well as to all of the State IV-D directors, for their review and comments. Regional discussions about the measures were then held with participating States and Federal staff in order to elicit their comments, questions, and criticisms. The group recognized that more work, such as work on definitions and data gathering requirements needs to refine these measures.

9The group's effort was presented to IV-D directors at their annual meeting in May in Austin, Texas. At that meeting, feedback from the regional telephone calls was discussed and recommendations were made about how to adjust measures that had not been acceptable to many people. Finally, all of the measures were distributed again to all State IV-D directors during September.

9In FY 1995, OCSE established the National Child Support Enforcement Training Work Group. Members represent all facets of the CSE community. The Work Group's mission is to develop a national strategy for meeting diverse training needs in order to improve CSE program results and customer services at the Federal, State, and local levels. The Work Group serves as a medium to share ideas, curriculum, and technology that can be implemented in CSE training.

9OCSE provided training in various forums to a wide audience of diversified target groups in FY 1995. In addition to workshops at both the National Child Support Enforcement Association's and the Eastern Regional Interstate Child Support Association's annual training conferences, CSE staff designed and delivered numerous training events for groups with specialized needs.

9The Fifth National CSE Training Conference on July 10-12, 1995, was attended by over 300 State and local CSE trainers and practitioners. The conference focused on three major areas: GPRA; new training technology; and information on best practices in the areas of paternity establishment, interstate case processing, and enforcement.

9A GPRA overview was provided to Conference participants and many workshops were dedicated to GPRA. One workshop focused on the development of the National Child Support Enforcement Strategic Plan under GPRA and other workshops introduced tools useful in developing performance measures. State-of-the-art training technology was highlighted through a satellite link with the Southwest Regional Support Enforcement Association conference in New Mexico and an interactive computer-based training (CBT) that can be used in CSE training.

9OCSE co-sponsored a regional interstate/self-employed conference with the National Child Support Enforcement Association. OCSE's National Training Center assisted in coordinating workshops on topics such as processing child support cases, using the Uniform Interstate Family Support Act, modification in the interstate arena, paternity establishment, interstate income withholding, dealing with the self-employed, and the Internal Revenue Service (IRS) 1099 Project.

9OCSE's National Training Center (NTC) staff provided training that focused on UIFSA at the 22nd National Conference on Juvenile Justice, jointly sponsored by the National District Attorneys' Association and the National Council of Juvenile and Family Court Judges. In addition, NTC staff provided UIFSA training at each of the three judicial training sessions held this year by the Judicial Institute of Maryland. NTC provided logistical support and training expertise for two Criminal Nonsupport Seminars held in San Diego, California. The seminars were held for DOJ attorneys and CSE program staff. NTC provided CSE training for DC area attorneys during the "Child Support Enforcement in the Nineties" seminar, presented by the Domestic Relations Committee of the Family Law Section of the District of Columbia Bar. In partnership with the DC Office of Paternity and Child Support Enforcement, NTC provided CSE training for the "Women with HOPE" meeting at the Catholic University of America's Columbus School of Law. Women with HOPE are survivors of domestic violence.

9OCSE conducted two Training of Trainers courses in FY 1995. The first delivery was in March and was attended by 20 CSE trainers representing 13 States and the District of Columbia. The second delivery was completed for 19 trainers representing the State Of Virginia's CSE program. The training provided instruction in curriculum design, development, delivery, and evaluation. The courses are instrumental because of the multiplier effect: that is, the State trainers return to their jurisdictions and educate other CSE program staff.

9The Washington D.C. Metro Project is a collaboration of child support enforcement operational units of the local governments from the metropolitan Washington D.C. area. Cross-jurisdictional functional teams address barriers in processing local interstate child support cases. Participating in the project are IV-D officials as well as sheriffs and court officials. OCSE developed and conducted a training workshop for participants involved in the Metro Project in March in Washington, DC with over 50 participants representing the three jurisdictions. The day of training covered many topics including Criminal Nonsupport, Parent Locate Services, the Enumeration Verification System, IRS Project 1099, IRS Full Collection, Child Support Enforcement Network (CSENet), and the Order/Notice to Withhold Income for Child Support. The training session was conducted in a manner that encouraged participants to ask questions relevant to their specific job duties.

9OCSE provided training at six State CSE Training Conferences this year. Training was provided on a variety of topics, including UIFSA, the Federal Criminal Nonsupport remedy of the Child Support Recovery Act of 1992, innovative enforcement techniques, including IRS Project 1099 and IRS Full collections; and establishing and enforcing child support obligations against members of the military. OCSE appeared at training conferences in the States of Indiana, Michigan, Ohio, Oklahoma, Washington, and Wisconsin.

9Other State training events that were not in a conference setting were conducted as well. OCSE staff served on the Administration for Children and Families' training team and co-trained three Self-Sufficiency workshops for AFDC, Child Support Enforcement, and JOBS employees. Workshops were conducted in West Virginia, Los Angeles, and DC. "Creating Excellence in the Work Place," a one-day course for employees of the Office of Paternity and Child Support Enforcement in the District of Columbia, focused on self-motivation, team building, and customer service.

9The Division of Consumer Services (DCS) was established with OCSE in FY 1995 to improve public understanding of and access to the child support enforcement program. DCS provides the focal point for consumer relations, including responding to public inquiries. The Division develops and publishes informational materials and operates the National Reference Center. It also publishes the OCSE flagship publication, Child Support Report.

9In its daily work, the Public Inquiries Branch of DCS responds to people in need of assistance who turned to the Federal government for help. Some were frustrated by what they considered to be unfair or ineffective treatment; all wrote to the President, Congress, or directly to OCSE for assistance. Public Inquiries responded to thousands of pieces of correspondence and thousands of telephone calls from the public and the media. Case assistance was provided on Congressional inquiries and in other instances, as needed.

9The National Reference Center responded to over 3,600 individual requests for OCSE publications in 1995. Over 55,400 publications were distributed. In addition, the Public Inquiries staff revised and updated the Handbook on Child Support Enforcement.

9As the most requested OCSE publication , each year, over 10,000 copies of the Handbook are distributed to the general public, advocates, and others. In addition to the Handbook, the publication "Collecting Child Support" was translated into Spanish and Vietnamese and distributed through the ACF regional offices.

9To inform the public of current topics of interest in child support enforcement, OCSE developed a number of news releases in 1995. These releases included topics such as In-Hospital Paternity Establishment, Tax Offset, License Revocation, the Government Performance and Results Act, and notification of the release of the Annual Report to Congress, and the Census Bureau’s Child Support Supplement to the Current Population Survey.

9In cooperation with the U.S. Office of Personnel Management, the Division of Consumer Services facilitated the implementation of Executive Order 12953 (EO) which establishes the Federal government as a "model employer" in promoting the establishment and enforcement of child support. OCSE produced a video tape concerning child support and the Executive Order for distribution to all Federal agencies and participated in a presentation on Child Support and the EO at OPM's annual care giver's fair. Messages informing Department of Health and Human Services and other Federal employees of the Executive Order and urging those who owe child support to remain current in their payments were prepared and included on pay stubs. In addition, printed materials on Child Support and the EO were developed for Federal employees.

9In 1995, OCSE went on-line developing and maintaining an Internet Homepage. With its powerful feedback capabilities, hundreds of public inquiries were received and answered through the Homepage.

9A pilot test in Nebraska and Iowa established the value of using Electronic Funds Transfer and Electronic Data Interchange (EFT/EDI) in the transmission of child support withheld from wages by employers to support enforcement agencies. To encourage States' use of EFT/EDI, regulations implementing the Family Support Act of 1988 were developed to require that comprehensive child support enforcement automated systems be able to accept withholdings and send and receive interstate child support collections using EFT/EDI.

9Washington State has been a leader in the application of EFT/EDI. Many other States have turned to Washington for help in their initial experiences--particularly with respect to the transfer of interstate child support collections. Colorado has a centralized Family Support Registry, which supports and encourages the use of EFT. Colorado also uses EFT to transfer payments to custodial parents' bank accounts. Piloting Federal agencies' use of EFT/EDI in transferring collections to States will be a goal for FY 1996.

9The Family Support Act of 1988 (FSA) mandated that all States implement a statewide, comprehensive automated child support enforcement system which meets OCSE certification requirements by October 1, 1995. However, virtually all States expressed concern that there was insufficient time to adequately test, implement, and convert cases to the new automated systems before the October 1, 1995 statutory deadline. Congress, responding to the States and with the Administration's support, enacted Public Law 104-35, which extended by two years the deadline for States having an operational automated data processing and information retrieval system for child support enforcement.

9States made progress in developing and implementing automated systems that will support the State’s requirements as specified in the FSA. At the end of FY 1995, fifteen States had operational statewide automated systems designed to meet FSA requirements. Another eleven States, while not yet operational statewide, had new application systems in pilot testing. Thirteen States had a statewide system being enhanced to meet FSA standards and ten States had older systems that were operational statewide that will be replaced with newer systems that meet FSA standards. Another five States did not have a current statewide system and had not yet piloted their new automated systems. According to revised schedules which were submitted after Congress extended the deadline, States implementation efforts are fairly evenly spaced over the next two years. 9

9Although many States have completed or are near completion of their automated systems, the additional time granted by Congress is enabling them to address issues identified during testing. During FY 1995, ACF conducted eighteen functional reviews of States’ automated CSE systems. Six reviews were conducted of systems that were statewide, eight reviews were conducted of systems that were in pilot, and four on-site reviews were conducted of the functionality of the application systems after acceptance testing but before pilot. ACF also provided on-site technical assistance to nine States whose automated systems were only partially completed.

9The on-site certification reviews of States’ automated child support enforcement systems involved ACF teams comprised of regional and central office staff from the program, policy, fiscal, and systems areas. To focus their efforts better during the on-site review, these ACF teams spent over a month prior to the on-site review analyzing and discussing the State’s documentation of their CSE application system, including test results of how the system distributed child support payments in 54 different test scenarios. Screen prints, user and training manuals, and other systems documentation were also reviewed prior to the on-site visit to enable the team to focus their time on actual demonstrations of system functionality and interviews with users in field offices.

9Level II certification means a review was conducted on a automated system that is operational and statewide. Level I reviews are optional and conducted after a State has piloted the system and live data can be reviewed. Functional reviews are also optional and often done at the request of a State who has finished its application development but wants a review of the functionality before piloting. On-site technical assistance is provided to States whose automated systems are not complete.

9One serious problem children face after their parents divorce or separate is that contact with the noncustodial parent, usually the father, drops off significantly. The National Survey of Children and the National Survey of Families and Households indicate that only one-sixth of all noncustodial fathers (divorced or unwed) visit their children weekly or more frequently; nearly one-third to one-half see their children just once a year or less often.

9Advocates for noncustodial parents assert the lack of visitation is caused by interference or perceived interference by the custodial parent. Fathers with arrangements for shared parenting tend to pay child support with more regularity than fathers who have no such arrangements. The Current Population Survey (1989) reported that fathers with joint custody arrangements paid the full amount of child support due in 90 percent of the cases, while fathers with visitation agreements paid in full 79 percent of the time. But those with neither joint custody nor visitation agreements paid in full only 45 percent of the time. However, it is difficult based on this data to establish a cause and effect relationship between visitation/access rights and payment of child support.

9In an effort to address these and other issues, the Family Support Act of 1988 authorized a limited number of grants to States for demonstration projects to develop, improve, or expand activities designed to increase compliance with the child access provisions of court orders. The initial ("Wave I") projects began in 1990 in Florida (Leon County, Second Judicial District); Idaho (Boise, Fourth Judicial District); and Indiana (Lake County and Marion County). In 1991, other projects ("Wave II") were funded in Arizona, Idaho, Iowa, and Massachusetts. The findings from these projects, as analyzed under an evaluation contract with OCSE by Policy Studies Inc. and the Center for Policy Research, will be available in 1996.

9On March 8, 1995, OCSE announced the availability of research funds for child support performance measurement projects (cooperative agreements) to apply the concepts of the Government Performance and Results Act. Funded under the authority of Section 1115 of the Social Security Act, the cooperative agreement approach calls for substantial involvement of Federal staff. Six projects, totaling over $606,000, were selected.

9Arizona is piloting the Social Security Number identification system, Enumeration Verification System (EVS). It is a variant of the other pilots in that data will be sent to OCSE in the Federal Parent Locator Service (FPLS) format and will be returned in EVS format. The State proposes to obtain a mini-computer to do multidimensional analyses of operational statistics. This will allow the State to perform on-going analyses leading to continual operational improvements. The SSN identification system is expected to increase the number of parents located, increase paternity and order establishments, and increase collections. The State anticipates realizing gains in all areas of program operations and performance measurement.

9Delaware is developing a self-contained, integrated unit co-located with AFDC (at the Northeast State Service Center in Wilmington) utilizing high-level, well-trained professional staff versed in all aspects of functions necessary to establish child support orders in AFDC cases. The unit will utilize innovative approaches, automation, technology, and state-of-the-art remedies to expedite establishment of support orders on behalf of AFDC mothers. Delaware is in the process of changing from a court-based to an administrative paternity establishment process. For AFDC cases, the project expects to increase paternity and support orders established; increase collections; improve the cost-effectiveness ratio; and improve processing time.

9To improve incentives for cost-beneficial performance, Michigan proposed changing the contracting process with prosecuting attorneys and Friends of the Cort to base reimbursement on results rather than activities performed. In the first year, volunteer prosecuting attorneys will have contracts based on performance. Results from this experimental effort will be compared to the performance of the prosecutors who do not volunteer (control sites). In subsequent years, more prosecutors will be required to have contracts based on performance until all 83 counties are under the performance based contracts. The goal is to increase the number of orders and paternities established in a more cost-efficient manner. Each enforcement and establishment activity will be weighted to the degree of difficulty and performance will be based on the results of these weighted activities.

9In Minnesota, Hennepin County (Minneapolis) will measure program performance based on the outcomes for paternity establishment, review and adjustment of child support orders, medical support enforcement, private investigative contracts, and an employment program for noncustodial parents. The County has recently initiated a five year strategic planning process and has incorporated performance measurement and evaluation as an essential component of the strategic plan. Hennepin County plans to increase the rate of paternity establishment, ensure the appropriateness of ordered amounts, improve medical support enforcement and the payment of medical support by third-party liability carriers, improve the locate function, and increase collections.

9Virginia's project is to improve the interface between IV-A and IV-D agencies by building a new communication system and electronic linkages between all State and local service programs. Options to be considered include cross-training of IV-A/IV-D personnel, outstationing of IV-D workers, use of video-conferencing between staffs and between client and agency, and a IV-D "circuit rider" in the smaller, more rural counties. These options will be tried in concert with other administrative improvements. In this project, the information exchanged between IV-A and IV-D about a custodial parent is expected to be more timely and complete, thus enhancing the efficiency of both agencies. It is expected workable AFDC child support cases will be increased; there will be an increase in the number of paternities and support orders established in such cases; collections on behalf of AFDC recipients will increase; and customer satisfaction will be improved.9

9Wyoming plans to restructure, establishing district enforcement offices which may be run by county CSE offices or be contracted out to private vendors. The State will also try to establish a district and State training program which will support the restructuring. Restructuring is expected to bring enforcement functions closer to the local level, thereby facilitating and improving collections. The establishment of a strategic planning process will allow the State to establish short and long-term goals, and strategies for achieving them.

9The Federal government provides a computerized national network operated by OCSE to provide States access to information on a noncustodial parent's location, earnings, assets, and employer's address. The key components of this network are described below.

9The Federal Parent Locator Service (FPLS) provides Social Security Numbers (SSNs), addresses, and employer and wage information to State and local CSE agencies to establish and enforce child support orders. The FPLS utilizes the most current information available from the Internal Revenue Service (IRS), Social Security Administration (SSA), National Personnel Records Center (NPRC), Department of Defense (DOD), Department of Veterans Affairs (VA), Selective Service System (SSS), and State Employment Security Agencies (SESA).

9During FY 1995, the FPLS processed approximately 4.2 million requests for information from State and local CSE agencies. The computer matches with DOD, SSA, and NPRC were increased to weekly instead of biweekly. Since DOD receives data from other agencies, the FPLS match with DOD was expanded to receive additional payroll data from the Office of Personnel Management, the Executive Office of the President, and the Administrative Office of the U.S. Courts. The FPLS is testing a new automated match with SSA to identify SSNs.

9The FPLS obtains employer addresses and wage and unemployment compensation data from the SESAs. This information is extremely useful in assisting CSE agencies in processing cases where the custodial parent and children reside in one State and the noncustodial parent lives or works in another State. The employment data are updated quarterly by employers reporting to their State employment security agency and the unemployment data are updated continually from State unemployment compensation payment records. In FY 1995, approximately 3.1 million FPLS cases were submitted for crossmatching with the data from the SESAs.

9The Enumeration Verification System (EVS) is a multi-purpose SSN verification system. While States may use the FPLS to identify SSNs for noncustodial parents, the EVS verifies and corrects SSNs and identifies multiple SSNs. The EVS is comprised of two systems. One system provides a State with multiple SSNs for an individual who has been legally issued more than one SSN. The second system provides a corrected SSN in cases where a transposition of digits has occurred in the SSN that a State already has for an individual. In FY 1995, 3.8 million SSNs were submitted to EVS; over 180,000 SSNs were corrected and over 25,800 multiple SSNs were identified.

9OCSE acts as an intermediary between the States and the Internal Revenue Service (IRS) in the operation of the Federal Income Tax Refund Offset program for the collection of past-due child support. In FY 1995, Federal income tax refund offset resulted in nationwide collections of over $803 million, an increase of 17.2 percent over FY 1994. A sum of $576 million was offset on behalf of families receiving public assistance and $227 million was offset on behalf of non-AFDC families. The IRS charged an administrative fee of $7.83 per offset in FY 1995.

9The SSN verification system, EVS, was incorporated into the Federal Income Tax Refund Offset Program. Each year a significant number of no-match cases fall out of the offset program because of invalid SSNs; these SSNs were processed through EVS. In processing year 1994, over 818,000 tax refund offset cases were submitted through the EVS system, allowing OCSE to return over 99,700 corrected SSNs to the participating States. Of these, 72,300 were resubmitted in FY 1995 to the tax refund offset program, resulting in 25,731 offsets and additional income tax refund offset collections of over $22.9 million in past due child support.

9When States' attempts to recover delinquent child support have been unsuccessful, the law provides State CSE agencies with a collection mechanism referred to as the "Full Collection Process." This mechanism is used only when there is a good chance that the IRS can make a collection and only for cases in which a child support obligation is at least three months delinquent and the amount owed is at least $750.

9In FY 1994, OCSE and the IRS collaborated on a Full Collection pilot project to find ways to improve the process. OCSE worked with 12 States and submitted 698 full collection cases to the IRS. Many of the cases submitted during the pilot are still active and both OCSE and the IRS are tracking their progress. In FY 1995, approximately $65,000 was collected as a result of the pilot. Collections continue to rise. More detailed analysis of the pilot will be available in late 1996.

9Since October 1984, OCSE has participated in Project 1099 which provides State CSE agencies access to all of the earned and unearned income information reported to IRS by employers and financial institutions. The Project 1099 information is used to locate noncustodial parents and to verify income and employment, which is essential to establishing and enforcing child support obligations.

9In addition to helping locate the additional non-wage income and assets of regular wage earning obligors, the Project 1099 information is also used to facilitate States' efforts to locate income and asset sources of self-employed and non-wage earning obligors and to facilitate States' efforts to review and modify child support orders.

9In FY 1995, OCSE submitted over 3.9 million cases to the IRS under Project 1099 and over 2.5 million cases were matched for a 65 percent match rate. This high volume of cases and high match rate shows the enormous potential of this asset identification tool and the reason States are encouraged to use Project 1099 information to the maximum extent possible.

9In FY 1995, final regulations were issued to streamline the audit process, to place a greater focus on outcomes, and to specify how the OCSE audits will evaluate compliance with the requirements set forth in the law and regulations, including requirements resulting from the Family Support Act of 1988 and the Omnibus Budget Reconciliation Act of 1993.

9OCSE audits State Child Support Enforcement programs to ensure that they meet Federal requirements. Federal law specifies that a State that has been audited and found not to be in substantial compliance is subject to a financial penalty. The penalty may be held in abeyance for up to one year to allow a State the opportunity to implement corrective actions to remedy the program deficiency. At the end of the corrective action period, a follow-up audit is conducted. If the follow-up audit shows that the deficiency has been corrected, the penalty is rescinded.

9If it is determined that the State remains out of compliance with Federal requirements, a graduated penalty, as provided by law, is assessed. The penalty ranges from 1 to 5 percent of the total payments made to the State by the Federal government for the Aid to Families with Dependent Children (AFDC) program. The actual amount of the penalty depends on the severity and duration of the deficiency. If a State is under penalty, a comprehensive audit is conducted annually until previously cited deficiencies are corrected.

9The new rule revises the evaluation criteria used to determine substantial compliance and focuses on requirements in effect prior to the Family Support Act that the States often had not substantially complied with in the past. It also reflects the new provisions of the Family Support Act of 1988, including those governing standards for program operations, guidelines for setting child support awards, immediate wage withholding, and review and adjustment of child support orders. The rule redefines substantial compliance to place a greater focus on performance, eliminating administrative or procedural criteria and focusing on service-related criteria. The rule is effective for audits conducted after December 23, 1994.

9During FY 1995, OCSE continued its audit resolution process in conjunction with the ACF Regional Offices. The audit resolution process consists of tracking all non-penalty recommendations contained in audit reports issued by OCSE. The ACF Regional Offices determine whether each State is taking corrective actions to remedy the audit deficiencies. In future audits, follow-up work is conducted to determine whether the State’s actions have corrected the problems. The auditors are able to close the recommendations if no further action is required. However, if the corrective actions have failed to remedy the situations or if the State has failed to complete the corrective actions, the recommendations remain open and will be reviewed again in the next subsequent audit.9

9During FY 1995, the OCSE Division of Audit issued final reports to three States based on comprehensive Program Results/Performance Measurements audits of their programs covering various audit periods from 1992 through 1993. Two of these States had achieved substantial compliance with the Federal requirements. The remaining State did not achieve substantial compliance but a notice of substantial noncompliance informing the State of this will not be sent. The revised audit regulations significantly change the criteria used by OCSE to determine whether a State IV-D program is in substantial compliance with Federal requirements. Thus, OCSE will not take further action to enforce the audit penalty provisions under the old criteria.

9Because of this revision, OCSE focused its audit process more towards evaluating the States' financial and statistical data reporting systems and related areas which will be used to measure States performance in the future. OCSE issued 11 Reporting System Review reports in 1995, as well as one Limited Cost review, and one Family Support Act review.

9Additionally, OCSE issued a Transaction-Based Reimbursement review at the request of a State to evaluate their proposed method of cost allocation for circuit clerk salaries. OCSE also began performing Undistributed Collections reviews to evaluate the handling of these collections and determine the accuracy of undistributed collections amounts reported by States. Twelve States will be reviewed, and the results combined for issuance in a National report. In FY 1995, two States were issued these final reports. OCSE also resumed performing revised Program Results/Performance Measurements audits for purposes of management information and remedial action.

9Deficiencies noted in the reporting system reviews issued in final in FY 1995 centered on the States' statistical reporting systems. Six States were determined to have unreliable statistical reporting systems, while the collection and expenditure systems were found to be reliable in most States reviewed. Minor improvements were, however, suggested for these reporting systems in all States reviewed.

9During FY 1995, follow-up audit reports were issued to 10 States that had been sent notices of substantial noncompliance in prior years. Four of these States achieved substantial compliance with criteria on which they had previously failed. As a result, penalties were rescinded in these States. Because of revisions to audit regulations and the change of focus for audit periods beginning on or after December 23, 1994, 13 States were informed that OCSE would take no further action to enforce the audit penalty based on prior substantial noncompliance and that no follow-up review would be initiated.

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