Revisions to Financial Reporting Requirements to Conform with Recent Legislation


Publication Date: January 17, 1989




January 17, 1989


SUBJECT:Revisions to financial reporting requirements to conform with recent legislation.

STATUTES: Public Law 100-203:

"Omnibus Budget Reconciliation Act of 1987"

Public Law 100-485:

"Family Support Act of 1988"

REVISIONS:Each of the statutes listed above contain provisions that necessitate changes in the States' quarterly financial reporting for the Child Support Enforcement Program, as follows:

1. Section 9141, P.L. 100-203: Amends Section 457(c) of the Social Security Act to eliminate the mandatory treatment that had been applied to the portion of child support collections received in excess of the current support obligation during the five-month period following the termination of a family's eligibility for AFDC. This treatment often included a modified distribution process that differed from the distribution of other non-AFDC collections.

The revised statute eliminates this different treatment and requires that collections received on behalf of former AFDC recipients be distributed and processed in the same manner as other non-AFDC collections (with the exception of the treatment of any amount applied to an AFDC arrearage amount as explained below), thereby effectively eliminating the five-month "transitional" period.

Action Required: In recognition of the five month transitional period, collections received by the State during that period on behalf of former AFDC recipients have been reported as "Collections Made for Terminated AFDC Cases" on line 18 of Form OCSE-34, the "Quarterly Report of Collections." To recognize the change under this statute, State agencies are no longer required to report an amount on this line. This line may either be left blank, completed with a zero (0), or completed with "NA." (NOTE: It remains the policy of OCSE

that under the "full and complete" reporting requirements of Section 455(d) of the Social Security Act, the use of either blank spaces or "NA" on a financial reporting form is unacceptable. This restriction will be waived in regard to line 18 of this form only).

In accordance with the instructions for Form OCSE-34, current quarter collections received on behalf of these families are considered non-AFDC collections and are reported, depending on the source of the collection, on lines 2(b) through 8(b), as appropriate.

In accordance with each State's distribution policy, any amount collected in excess of the current support obligation must be applied to either the absent parent's AFDC or non-AFDC arrearage, if any, and will be considered as either an AFDC or non-AFDC collection, respectively. These average collections are reported on Form OCSE-34, depending on the source of the collection, on either lines 2(a) through 8(a) or 2(b) through 8(b), as appropriate.

Effective Date: Applicable to all collections made on behalf of former AFDC families on or after December 22, 1987.

(Since the collections reported on line 18 of Form OCSE-34 are also found elsewhere on this report, States are not required to revise reports submitted since December 22, 1987. The revised reporting requirements will be effective with the first quarterly report submitted following publication of this Action Transmittal.)

2. Section 112, P.L. 100-485: Amends Section 455(a)(I) of the Social Security Act to provide Federal financial participation at the 90 percent rate for "laboratory costs incurred in determining paternity".

Action Required: "Laboratory Paternity Determination Expenditures" are reported on line 8 of Form OCSE-41, the "Quarterly Report of Expenditures".

(Under Section 458(c) of the Social Security Act, it remains a State option to report laboratory costs related to the establishment of paternity separate from other administrative expenditures. However, FFP at 90 percent rate will only be available for laboratory costs reported on this

line of the reporting form. OCSE is currently developing regulations to provide guidelines to State IV-D agencies concerning the type of laboratory expenditure that qualifies for Federal funding at the 90 percent rate.)

Prior quarter increasing and decreasing adjustments will continue to be reported in columns b or c of this line of the report and will be funded at the rate applicable to the quarter in which each expenditure was made.

The instructions for the calculation of the "Total Federal Share of Expenditures" reported on line 10 (column a) of this report should be changed to read: "(Equal to: [(Enhanced FFP Rate) x (Lines 5+6+8) + (Regular FFP Rate) x (Lines 7+9)]".

Effective Date: Applicable to eligible expenditures made on or after October 1, 1988.

3. Section 127.P.L. 100-485: Amends Section 458(d) of the Social Security Act to exclude from the calculation of the State's annual incentive payments, any expenditures made under the terms of a special project grant awarded under the provisions of Section 455(e) of the Act.

Action Required: The calculation of the estimate of State incentive payments prior to each fiscal year and the adjustment of those estimates following each fiscal year is performed by the FSA Office of Financial Management. This revision requires no change in reporting by the State agency.

Effective Date: All expenditures made on or after January 1, 1990, under the terms of a special proJect grant award will not be included in the calculation of incentive payments.


MATERIAL: OCSE-AT-85-4, dated April 5, 1985, only insofar as

it pertains to the instructions for reporting

laboratory paternity determination expenditures on

line 8 of Form OCSE-41 and collections made for

terminated AFDC cases on line 18 of Form OCSE-34.


TO: OCSE Regional Representatives

Wayne A. Stanton


Last Reviewed Date: