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Charge-backs for OCSE for the Printing and Processing of OCSE Issued Pre-offset Notices

AT-96-01

Published: October 30, 1995
Information About:
State/Local Child Support Agencies
Topics:
Funding, Cost Recovery
Types:
Policy, Action Transmittals (AT)
Tags:
Collection & Enforcement Systems

AT-96-01

October 30, 1995

TO: STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS

SUBJECT:Charge-backs for the Office of Child Support Enforcement (OCSE) for the printing and processing of OCSE issued pre-offset notices

AUTHORITY: Section 214 of Public Law 102-394, Department of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act of 1993 specifies that,

"for any program funded in this Act or subsequent Departments of Labor, Health and Human Services, and Education and Related Agencies Appropriations Acts, the Secretary of Health and Human Services is authorized, when providing services or conducting activities for which the Secretary is entitled to reimbursement by the State, to obtain such reimbursement as an offset against Federal payments to which the State would otherwise be entitled under such program from funds appropriated for the same or any subsequent fiscal year. Such offsets shall be credited to the appropriation account which bore the expense of providing the service or conducting the activity, and shall remain available until expended."

PURPOSE:The purpose of this Action Transmittal is to provide information on the cost recovery procedures of the Administration for Children and Families (ACF) for the printing and processing of OCSE issued pre-offset notices for the Federal Tax Refund Offset Program.

In the past, a number of States relied on OCSE for the issuance of pre-offset notices. OCSE was pre-paid for this service in July of each year. The fee charged by ACF to the States for this service includes the cost of paper, printing of the pre-offset notice with the address and nine digit bar code information inserted on the notice, trimming, bursting, folding and stuffing of the pre-offset notices in the specially prepared pre-stamped double window envelope by thecontractor, and postage.

PROCEDURES:States will now have the opportunity for these fees to be subtracted from their title IV-D grant award, rather than make payment by check.

To elect this methodology, a State must execute an agreement with ACF, enabling ACF to reduce the grant award by the amount of the fees (See attachment 1).

For States that elect not to use this methodology and do not execute the necessary agreement, the fees must be paid by check and reported as an expenditure on line 9 of Form OCSE-131.

 

The process should work in the following manner for fiscal year 1996:

1. States were informed of the estimated cost for Processing Year 1996 in Dear Colleague letter DC-95-34 dated May 18, 1995.

The fee amount has been estimated to be $.39 per pre-offset notice.

2. States were required to submit an estimate of the number of cases for the current fiscal year, no later than July 28. States should calculate the estimated tax offset charges by multiplying the per case charge ($.39) times the estimated number of cases.

3. After the pre-offset notices have been printed and mailed in September and October and the actual costs have been determined, the States that have entered into an agreement with ACF will be notified of the amount charged to them. Each of these States is to include the amount with other eligible expenditures reported on line 9, form OCSE-131, Part 1 (see attachment 2), for the first quarter of fiscal year 1996. To accomplish settlement (payment) for this charge, ACF will deduct the amount from the State's grant in the third quarter of fiscal year 1996. This will be concurrent with the normal adjustment for the first quarter from estimate to actual and ACF will include the amount on line 1.d, "Other Adjustments," on the supplemental grant computation sheet.

4. States that have not entered into the agreement with ACF will also be notified of the amount charged to them after the pre-offset notices have been printed and mailed. These States are to submit a check for the amount charged to them. Payment is due thirty days after notification of the amount charged. The procedure for remitting the check is identical to current practice. The amount charged is to be reported on form OCSE-131 as detailed above.

If payment is not received by the end of the second quarter, the amount will be deducted from the State's grant at the same time adjustments are made for the first quarter's estimate to actual. Interest will be calculated from the 31st day after notification of the amount charged.

ACTION REQUESTED:Each State retains the option of paying its pre-offset notice fees by either a grant reduction or pay-by-check methodology. It appears that the most efficient means, for both the States and the Federal government, for paying pre-offset charges would be through automatic offset of each State's grant award (OCSE highly recommends that the States use this method of payment). This would enable each State to pay charges without the need to issue a check. If a State wishes to employ this option, it should execute the attached agreement and return it to:

Office of Child Support Enforcement

Special Collections Unit

370 L'Enfant Promenade, S.W. - Room 484

Washington, D.C. 20447

A State choosing to retain the pay-by-check methodology, should advise this agency of that decision. A letter indicating that option should be sent to the Special Collections Unit at the above address.

DEBT COLLECTION:For those States that do not choose the grant reduction methodology, the amount of thesefees will be considered a debt under the 9 provisions of 45 CFR Part 30, including the assessment of interest to be added to the amount of the debt.

RELATED REFERENCE:OCSE-AT-94-05 dated August 23, 1994

EFFECTIVE DATE: October 1, 1995

INQUIRIES TO: Marcia LaRue

Office of Child Support Enforcement

Special Collections Unit

370 L'Enfant Promenade, S.W. - Room 484

Washington, D.C. 20447

Phone Number: (202) 401-9267

Deputy Director Office of Child Support Enf. Administration for Children and Families

Attachments

 

Attachment 1

AGREEMENT BETWEEN

THE ADMINISTRATION FOR CHILDREN AND FAMILIES (ACF)

DEPARTMENT OF HEALTH AND HUMAN SERVICES (DHHS)

AND

THE STATE CHILD SUPPORT ENFORCEMENT AGENCY

I. PURPOSE

To record the agreement and understanding between the Administration for Children and Families (ACF) and the State

of _______________________, to permit the fees for the

processing of pre-offset notices for the Federal Tax Refund Offset Program issued by the Federal Office of Child Support Enforcement (OCSE) to be offset against the State's quarterly child support grant.

II.BACKGROUND

OCSE, at the State's request and if OCSE agrees, must send a written advance notice (pre-offset) to individuals before referring their names to the Internal Revenue Service (IRS) for offset. The notice must inform noncustodial parents of the following:

o The right to contest the State's determination that past-due support is owed or the amount of past-due support submitted;

o The right to an administrative review by the submitting State or at the noncustodial parent's request the State with the order upon which the referral for offset is based; and

o The procedures and timeframe for contacting the IV-D Agency in the submitting State to request an administrative review.

The pre-offset notice must also include the arrearage amount which will be submitted to IRS and a State or local address and telephone number for the taxpayer to contact if there are any questions.

As stated in OCSE Action Transmittal 94-05 dated August 23, 1994 the States that request OCSE to process and mail their pre-offset notices will be charged for the expenses associated with this service.

 

Attachment 1

Section 214 of Public Law 102-394, Department of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act of 1993 specifies that,

"for any program funded in this Act or subsequent Departments of Labor, Health and Human Services, and Education and Related Agencies Appropriations Acts, the Secretary of Health and Human Services is authorized, when providing services or conducting activities for which the Secretary is entitled to reimbursement by the State, to obtain such reimbursement as an offset against Federal payments to which the State would otherwise be entitled under such program from funds appropriated for the same or any subsequent fiscal year. Such offsets shall be credited to the appropriation account which bore the expense of providing the service or conducting the activity, and shall remain available until expended."

III. UNDERSTANDING

A.OCSE will provide the State Child Support Enforcement Agency with the estimated charge to print and process OCSE issued pre-offset notices. For processing year 1996 the amount has been estimated to be $.39 per pre-offset notice.

B.States were required to submit an estimate of the number of cases they would submit for processing year 1996 no later than July 28, 1995 so that OCSE will know approximately how many envelopes to order.

C.After the pre-offset notices have been printed and mailed in September and October 1995 and the actual costs have been determined, the State will be notified in December of the amount that will be deducted from their grant in the third quarter of fiscal year 1996. This agreement authorizes ACF to offset the State's grant for the actual costs incurred in the process.

D.The State is eligible to receive Federal funding at the regular matching rate for the costs of processing the OCSE issued pre-offset notice. The State should report the actual charges on line 9 of the OCSE-131 reporting expenditures for the quarter during which the State was advised of the amount charged to them (first quarter).

E.ACF and the State agree to identify a liaison to each other to facilitate carrying out the provisions of this agreement.

 

Attachment 1

F.Signatures

The parties executing this agreement are authorized to enter into agreements of this nature on behalf of their agencies.

AGENCY APPROVAL/SIGNATURES

 

ADMINISTRATION FOR CHILDREN AND FAMILIES

Date:

Deputy Director,

Office of Child Support Enforcement

Administration for Children and Families

Date:

State Child Support Official

Title:

State Agency:

Address:

 

 

Date:

Concur, Chief Financial Officer

Administration for Children and Families