Procedural Changes to Program Results Audits
August 31, 1987
TO:STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS APPROVED UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS
SUBJECT:PROCEDURAL CHANGES TO PROGRAM RESULTS AUDITS AND FOLLOW-UP REVIEWS
ATTACHMENT:Instruction on Procedural Changes to Program Results audits and Follow-up reviews. Instruction provides for submission of IV-D statistics, listings and sample cases to central location(s). These submissions will be used by the OCSE Audit Division for the Program Results audits and Follow-up reviews to determine whether the State has an effective Child Support program which is in substantial compliance with Federal requirements.
BACKGROUND:In order to expedite the Program Results audits and Follow-up reviews and to promote State stewardship and accountability for Child Support program management, certain procedural requirements are being implemented for all States. These procedures are being initiated in accordance with Section 452(a)(4) of the Social Security Act and the provisions of OCSE Audit Regulations at 45 CFR Part 305.13 and 305.35 and are effective on October 1, 1987 for all audits and Follow-up reviews conducted thereafter, as specified.
REFERENCE:45 CFR Parts 302.15, 303.2, 305.13, 305.20, 305.35 and 305.98
REFERENCE:Letter, dated May 29, 1987, Subject: Expediting the Audit Process
INQUIRIES TO: OCSE Audit Division
Wayne A. Stanton
PROCEDURAL CHANGES TO PROGRAM RESULTS AUDITS
In an effort to promote State IV-D Agency stewardship and accountability over the child support program, OCSE has implemented new procedures for the conduct of the Program Results audits and Follow-up reviews relating to the review of case files to evaluate the provision of child support services. The procedural changes, described below, will enhance the States' efforts to improve their control, tracking and management of cases. We have found that those States which have taken the initiative to develop better case management and tracking processes have shown steady improvement in program effectiveness. Therefore, these procedural changes will be advantageous to both the Federal OCSE and States in our goals of: providing better child support services; expediting the audit and penalty process; establishing better case management and control; and enhancing State IV-D agency responsibility.
The Child Support Enforcement provisions of the Social Security Act, as amended, required OCSE to revise the Audit Regulations contained in 45 CFR Part 305. The revised Regulations, require OCSE to conduct an audit of States' child support enforcement programs at least once every three years and to use a "substantial compliance" standard to determine whether States have an effective child support enforcement program. The State must substantially comply with both the State-plan related audit criteria specified in 45 CFR 305.20 and the performance indicators specified in 45 CFR 305.98.
The State plan-related audit criteria have been categorized as either relating to the administration of the State's child support enforcement program or to the actual provision of required child support enforcement case services. As to those audit criteria involving the provision of child support services, the State must utilize its procedures to provide services in at least 75 percent of the sample cases reviewed in order to be found in substantial compliance. Additionally, the State must meet specified time standards for the audit criterion "Expedited Processes".
The determination of substantial compliance comprises evaluations involving: (1) an examination of the State's administration of its child support enforcement program; (2) a review of sample cases to determine if the State is providing required child support services; and (3) application of the performance indicators specified in the regulations.
This Action Transmittal details the procedures to be followed, beginning with the audits commencing after October 1, 1987 for conducting that portion of the audit relating to the State's
substantial compliance with the State plan-related audit criteria involving the provision of child support services. These procedures are also applicable to all Follow-up reviews conducted after October 1, 1987.
This Action Transmittal places all States on notice of the new procedural requirements so that, if necessary, the State can take steps to generate the data and take such other actions as may be required. OCSE will provide additional specific information to those States to be audited, in any given fiscal period, informing them as to where and when the statistical data, case listings and case documentation should be sent for audit review.
IV-D CASELOAD LISTINGS FOR PROGRAM RESULTS AUDIT
For all Program Results audits initiated after October 1, 1987, each State to be audited is required to provide the cognizant OCSE Audit Division's Area Audit Office, by October 1, 1987, complete and accurate statistical data pertaining to its IV-D caseload, by local child support unit. The IV-D caseload statistics will be used to select local child support units for audit. The State must also submit a listing of its AFDC payment register as of January' 1, 1987, or the earliest date available during Federal Fiscal Year (FFY) 1987, if a listing as of January 1 is not available. The State will be notified of the specific child support units to be audited. The State must submit, for these locations, a complete and accurate listing(s) of their IV-D caseloads.
The listing(s) of these cases must account for all active and inactive IV-D cases within the selected units. A separate listing of all cases which were closed from October 1, 1986 through June 30? 1987 must also be submitted. The listing(s) of IV-D cases must be by local child support units, e.g., counties, districts, etc., in which each case file is maintained and it must designate each case within one of the following classifications: AFDC; non-AFDC (applicants and former AFDC recipients continuing to receive IV-D services); Foster Care; AFDC and Foster Care "arrearage-only" cases ; and incoming interstate (including Uniform Reciprocal Enforcement of Support Act) which were processed through the IV-D program.
In addition, effective on October 1, 1987, each State is required to submit for each of the selected local units: (1) a listing of those individuals who had requested "Payment of support through the IV-D agency or other entity" during the fiscal year; (2) a listing of all requests from consumer reporting agencies regarding amounts of overdue support owed by absent parents; and (3) a listing of those cases requiring establishment or enforcement of a support obligation, which during the FFY being audited, had been filed or completed under "expedited processes" or the State's judicial system (if an exemption had been granted). For example, for States utilizing "expedited processes", this would include establishment and enforcement ofsupport obligation cases for which the case was filed with the presiding
officers during the FFY being audited, as well as cases in which the support order or enforcement order was officially established and/or recorded. For States in which an exemption was approved for expedited processes, the listing should include cases requiring establishment and enforcement of support which were filed in a judicial system during the FFY being audited, as well as cases in which a court order or enforcement order was officially established. If a State had a 1-year exemption approved during the FFY being audited, the State should send the detailed listing of cases used as documentation for the quarterly reports provided to OCSE to track compliance with the time standards.
The IV-D caseload listing(s) will be used by the OCSE Audit Division as a universe from which to randomly select case files for review in determining whether the State has met the substantial compliance requirement of taking action to provide the required service(s) in at least 75 percent of the sample cases reviewed.
CASE FILES AND DOCUMENTATION FOR PROGRAM RESULTS AUDITS
Similar to the regulatory requirement for States to provide case documentation within a required time frame for the quality control reviews conducted by the Office of Family Assistance, effective for all Program Results audits beginning after October 1, 1987, States must provide duplicate copies of their complete case files, and related documentation, for all sample cases selected for review. These cases will be drawn only from those child support units selected for review. The complete case file, and all related records/documentation, in hard copy or electronic form, are to be submitted to the central location(s), and/or the Area Audit Office within thirty (30) days of request by the OCSE Audit Division. To ensure that the State maintains the original case files and related documentation and continues to provide child support services during the period the audit is conducted, only duplicate copies of the files/records should be submitted. This will also ensure that files/records are not lost or misplaced. The location(s) to which the case file and records are to be sent will be mutually agreed upon by the OCSE Audit Division and State officials prior to initiation of audit fieldwork.
For purposes of this Instruction, a complete case file is defined as documentation from all State and local units providing IV-D services whether or not the units are under cooperative agreement or receiving Federal funds. OCSE Audit Division's judgments and conclusions as to whether an action was taken to provide the required child support enforcement service(s) will, effective for audits commencing October 1, 1987, be based primarily on the case file and related records/documentation furnished by the Stateagency at the time of the audit. However, in accordance with 305.13(a), "Each State shall make available to the Office such records or other supporting documentation as the Office's audit staff may request. The State shall also make available personnel associated with the State's IV-D program to provide answers which the audit staff may find necessary in order to conduct or complete the audit."
Data sources for case files and records may include: legal agencies (e.g., District Attorneys, State Prosecutors, Family Court); child support collection agencies (e.g., Clerks of Court), local child support enforcement units; State-level child support units (e.g., State Parent Locate); or any other entity providing IV-D services.
The designated single and separate State IV-D agency is responsible for obtaining required case files/and or records from any entity providing child support enforcement services, including entities providing such services under State statute in lieu of a cooperative agreement, even if the entity is not receiving Federal funds. Requirements as to (1) specific types and (2) format of documentation to be submitted to the central location(s) may vary from jurisdiction to jurisdiction. The OCSE Audit Division will determine, in conjunction with the State under audit, the types of data sources and the format in which documentation is to be submitted. For example, automated data processing tapes, computer printouts, and hard copies of case service documentation will generally be accepted as documentation to substantiate the provision of child support services. If computer terminals are available for the auditors to access the case information at a central location, this would be preferable. Detailed below are examples of information which may need to be submitted for review:
- all documentation supporting IV-D and non-IV-D case files and services provided, including: case logs; referral documents from IV-A, documents identifying case actions and records identifying court orders; and other related documentation detailed in 45 CFR 303.2. These regulations require the establishment of a case record which contains all information collected pertaining to the case.
- child support payment collection and distribution records;
- register of $50 disregard payments computed for AFDC recipients;
- lists of subpoenas served, clerks' of court docket books, or presiding officers' docket books for selection of cases for expedited processes cases;
- listing of cases certified for IRS tax refund intercept;
- County attorney files relating to legal services provided (e.g. enforcement proceedings);
accounting records for non-AFDC collections;
-documents to show notice of collections of child support for AFDC recipients;
- lists matching absent parents who owe child support with persons receiving unemployment compensation;
- case listing for annual receipts for unemployment offset paid by absent parents;
- case listing for information regarding the recovery process for payments received directly by AFDC recipients;
- documents from automated billing system (e.g., identification of delinquencies, delinquency enforcement letters);
- listings informing the Medicaid Agency of medical information secured and/or when a new or modified court order or administrative order includes medical support; and
- cases certified for State income tax refund offset.
Additionally, States must submit copies of the following data for each local child support entity from which sample cases are drawn:
- Procedure Manuals;
- Organizational Chart;
- Cooperative Agreements; and
- Collection and Expenditure Reports
IV-D CASELOAD LISTING BY SERVICE CATEGORIES FOR PROGRAM RESULTS AUDITS
For all Program Results audits commencing after October 1, 1988, each State must develop and maintain IV-D caseload information as to the service(s) required on each case as of the first day of the audit period, i.e., October 1. If the October 1st data is not available the listing may be prepared as of a later date mutually agreed upon in advance of the specific request for the case listing(s), by the State and the OCSE Audit Division. The required date may not, however, be later than March 31. Each case is to be classified in one of the following three service categories: "Locate", "Establishment", or "Collection/Enforcement." These categories are defined below. The case listing(s) are to be submitted to the cognizant OCSE Area Audit Office within sixty (60) days of the date requested.
Definitions of Service Categories
Effective October 1, 1988, the following definitions are established to categorize cases:
Locate - cases requiring the determination and/or verification of the current address, residence, and/or employment of the absent parent or putative father for the purpose of establishing or enforcing the child support obligations. In addition, this
listing should include "locate-only" cases for which additional child support services are not requested.
Establishment - comprises two subcategories of cases which must be identified separately, as follows: (1) cases requiring the establishment of paternity and/or support obligation where the location of the putative father has been confirmed; and (2) cases requiring the establishment or modification of a support obligation where paternity is not an issue or has been established prior to the audit period and the location of the absent parent has been confirmed. Cases in this category will also be used to evaluate the criterion "Medical Support Enforcement."
Collection/enforcement - cases requiring that current child support payments be monitored in order to identify and enforce delinquent child support obligations. These cases must include all those requiring the following enforcement criteria: "Wage or income withholding"; "Expedited processes"; "Imposition of liens against real and personal property"; "Posting security; bond or guarantee to secure payment of overdue support"; "Federal Tax Refund Offset", "Collection of overdue support by State and income tax refund offset"; "Withholding of unemployment compensation"; and "Medical support". These cases should also include other enforcement techniques utilized by the State such as contempt proceedings, garnishment, creditors' claims in bankruptcy proceedings, etc. In addition, this category will include cases requiring the: receipt and distribution of child support collections; collection of spousal support; collection and accounting of fees; computation of the $50 disregard; making of required payments to the family; notification to IV-A of collections received; and notice of collection of assigned support.
IV-D CASELOAD LISTING AND CASE FILE DOCUMENTATION FOR FOLLOW-UP
The procedures discussed for the Program Results audits will also apply to all Follow-up reviews. However, the Audit Division will notify the States in advance as to: (1) the period to be covered by the Follow-up review., (2) the specific date for the caseload statistics; (3) the specific locations to be reviewed; (4) the specific dates for the caseload listings; and (5) the due datefor submission of the caseload statistics, caseload listings, and case files. Because the Follow-up reviews only address the ummet and marginally-met audit criteria cited in the "Notice of Substantial Noncompliance," the Audit Division will also inform the State regarding what specific case file documentation is needed to be submitted.
FEDERAL REGULATIONS REQUIREMENTS/CERTIFICATION AND TESTING OF DATA
Providing the universe of cases for audit sample selection and furnishing case files and related records/documentation on cases selected for review are solely State IV-D agency responsibilities. Under provisions of section 45 CFR 305.13 of the OCSE Audit Regulations entitled "State cooperation in annual audit," States are required to make available such records or other supporting documentation as the audit staff may request. In addition, 45 CFR 305.35(a) requires that States maintain the records necessary for proper and efficient operation of the plan.
The single and separate State agency, or its designee, must certify that the duplicated case files and related records/documentation are complete and accurate. The OCSE Audit Division will perform appropriate tests and checks of the data provided, including the statistical data and listing(s) of cases, to verify that they are accurate, and complete and can be relied upon for audit purposes.