RE: Base Level Program Expenditures for Incentive Reinvestment Purposes -- Revision
On July 6, 2001, the Office of Child Support Enforcement issued a dear colleague letter (DCL-01-33) that included two ways of calculating the base amount of spending for each state for incentive reinvestment purposes. A question was raised regarding whether the base amount using the average of expenditures for fiscal years 1996-1998 could be calculated by subtracting the average incentives for fiscal years 1996-1998. We believe this would be a fair interpretation of the regulation at 45 CFR 305.35(d) and have included a table that shows the results of this computation each for state (see Table 3).
Regardless of the computation method chosen, a state’s reinvestment base equals the state share of expenditures for fiscal year 1998 (or alternatively, fiscal years 1996-1998), unless the state reinvested its incentive payments for those years back into its child support program. If the state did reinvest the incentives received in those years, then the incentive amount can be subtracted from the expenditure base. The state must maintain records supporting this reinvestment, and make them available for review upon request.
We have attached revised tables that show the different ways of calculating the base level of program expenditures for incentive reinvestment purposes. Expenditure data for FY 1996 were incorrect for some states in the tables provided in DCL-01-33, and these numbers have been corrected. Also, the tables were corrected to show that the deduction of incentives from the state share of expenditures applies only for states that reinvested the incentive funds.
If you have any questions regarding this matter, please contact Lisa Johnson, Division of Planning, Research, and Evaluation.at (202) 401-5599.
Sherri Z. Heller, Ed.D.
Office of Child Support Enforcement
Calculating the Base Level of Program Expenditures for Incentive Reinvestment Purposes (39K MicroSoft Excel file)