OCSE - AT - 97-07
May 15, 1997
TO:STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS APPROVED UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS
SUBJECT:Instructions for Requesting an Exemption from the Mandatory State Plan Provision in Section 454(27) of the Social Security Act.
BACKGROUND: The State plan provision at õ454(27) of the Social Security Act (the Act) requires the States to have a State plan which provides for operation of a State disbursement unit in accordance with õ454B. However, under õ454B(a)(3), States may be exempt from certain aspects of this requirement.
CONTENT:This Action Transmittal establishes the procedure for application by a State for an exemption from the requirement of a State disbursement unit. This procedure is added to address the new provision of õ454B of the Act allowing an exemption.
TO: ACF Regional Administrators
Anne F. Donovan/s/
Acting Deputy Director
Office of Child Support Enforcement
I . INTRODUCTION
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) amended the Social Security Act ( the Act) to require States to operate a centralized State disbursement unit to handle the collection and disbursement of payments under support orders enforced by the State under Title IV-D of the Social Security Act (IV-D cases), and in all non-IV-D cases in which a support order is issued after January 1, 1994 and in which the income of the noncustodial parent is subject to wage withholding. The unit may be operated by the State IV-D agency or a contractor under a cooperative agreement with the IV-D agency. In IV-D cases, the collection and disbursement of payments must be in coordination with the State’s automated system.
The centralized state disbursement unit must be operational by October 1, 1998. States which, as of the enactment of PRWORA, processed child support payments through local clerks of court may continue to do so through September 30, 1999.
A State may apply for an exemption to establish its disbursement unit by linking local disbursement units through an automated information network, provided that the State can prove, to the satisfaction of the Secretary of the Department of Health and Human Services, that it will be neither more costly nor more time-consuming to establish or operate than a centralized system. However, even if the State is granted an exemption, there must be one central place to which all monies collected from employers through wage withholding are sent.
II. EXEMPTION PROCESS AND MATERIAL FOR SUBMISSION
States must submit an original and one copy of the exemption request to the appropriate ACF Regional Office. The submission must be made by April 1, 1998 to allow time for development of the centralized state disbursement unit if the exemption request is denied. The Regional Office will review the State’s submission and will recommend to the Central Office approval or disapproval of the State’s exemption request.
If further materials are needed before a recommendation can be made, the Regional Office will request them from the State in writing. The State must provide the additional material within two weeks of the date of the Regional Office’s letter requesting the additional material. If the State’s submission remains incomplete or insufficient to the point that the review cannot proceed, the Regional Office will recommend disapproval of the State’s request.
The Deputy Director of OCSE will notify the State in writing that the exemption has been approved or disapproved and the basis for the decision. Disapprovals of requests for exemptions are not subject to administrative appeal.
All exemptions are subject to continuing review, per section 652(a)(4) of the Act, at any time. If circumstances change, or if OCSE determines that a previously granted exemption should not have been granted, an exemption may be terminated by the Deputy Director of OCSE. (Section III contains information pertaining to disapproval or termination of an exemption.)
B. Materials for Submission of Requests for Exemptions
1. Cover letter. The State’s cover letter must specify that the State is seeking an exemption from the requirement that it operate a centralized State disbursement unit.
2. Justification and Documentation. The State must submit satisfactory evidence that establishment of a State disbursement unit by linking local disbursement units would not cost more nor take more time to establish or operate than a centralized system.
A. Narrative Justification. The State must include a written explanation of the process that will be used and linkages between the state automated child support enforcement system, local units and the central wagewithholding receipt point and an explanation and justification for the methodology that will be used to ensure timely disbursement within the required timeframes if support is received at the local level.
B. Timing. In addition, the State must compare for a fiscal year period the effectiveness of operating a centralized State disbursement unit to the effectiveness of operating a disbursement unit consisting of linked local units plus a central unit for wage withholding collections, by comparing the average period of time between initial receipt of the payment by the State at the actual point of collection (local or central) and disbursement of the payment.
C. Cost. The State’s evidence must include an estimate of:
149 the developmental costs of establishing a centralized State disbursement unit for all
IV-D and non-IV-D wage withholding cases as compared to having a central unit for wage withholding collections and linking local disbursement units for all other collections;
149 the operating costs of the centralized State disbursement unit as compared to operating a disbursement unit consisting of linked local disbursement units and a central unit for wage withholding collections (including personnel costs, equipment costs, overhead costs, etc.);
149 the staffing needed to operate a centralized State disbursement unit as compared to operating a disbursement unit consisting of linked local units and a central unit for wage withholding collections.
Actual costs for any aspects of the existing collection and distribution scheme that will be retained must be added to the estimates. All current costs for collection and disbursement under existing cooperative agreements which will be continued must be included.
3. Statistical Requirements. A State must fully document the request and define the methodology(ies) used to reach its conclusions. The methodology(ies) must be sound and supported by data that are reliable and representative. Where estimates are used, the State must identify any assumptions made and/or the sampling approach(es) used. In addition, all sampling must be statistically valid, include adequate sample size, and take into account sampling error. All inferences should be made at a 95 percent (or greater) level of confidence.
III. REVOCATION OF EXEMPTION
As stated previously, exemptions are subject to review at any time. If circumstances change, or the procedures used by the State under the exemption prove in practice to be more expensive or less efficient than claimed or than operating a centralized state disbursement unit, an exemption may be revoked by the Deputy Director of OCSE. If an exemption is revoked, the State must implement and begin using procedures in compliance with the requirements of section 654B of the Act within four months of the date of revocation of the exemption. The State must also amend its State plan within the same time period.
IV. CERTIFICATION OF IMPLEMENTATION OF MANDATORY PROCEDURES
To ensure that States fully implement the mandatory procedures required under section 654B, States must certify compliance on the appropriate State Plan page and submit for approval copies of all required laws, written policies and procedures, and administrative regulations or court rules as attachments.
The ACF Regional Administrator, in consultation with the Regional Chief Counsel, as appropriate, will review each submittal to ensure that all requirements are met. An approval of a State plan preprint page by the ACF Regional Administrator indicates that the State has fully implemented a procedure or has an exemption consistent with Section II of this Action Transmittal.