YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

November 19, 2002

Report No. 2002-112

More aggressive enforcement actions could improve child support collections 

Missouri collected no more than 20 percent of the child support owed to 538,000 custodial parents and their children from fiscal years 1996 to 2001, leaving over $1 billion uncollected. �While the support collected by the state's Division of Child Support Enforcement (division) has been comparable to the national average, auditors found several weaknesses affecting the state's ability to increase collections.

The auditors analyzed cases in which custodial parents relied on the state to collect child support under Title IV-D of the federal Social Security Act.� According to the division, Missouri disbursed about $400 million in 2001 to children receiving IV-D services.

Some enforcement ineffective; others not used

Division data showed only 29 percent of computerized enforcement actions helped collect more child support. �Auditors also found the division did not take all available enforcement actions to collect support in 43 percent of sampled cases.� In these cases, auditors found computerized enforcement actions often occurred, but not manual enforcement actions, such as suspending drivers' licenses of delinquent, non-custodial parents. �For example, the division suspended drivers' licenses in only 1 of 17 eligible cases found in the audit sample. (See page 6)

License suspensions not intensely pursued

The division can seek suspension of professional or recreational (fishing and hunting) licenses from non-custodial parents who owe the lesser of three months support or $2,500. However, since a 1998 computer system update, the division has not suspended any professional licenses and suspended only 8 recreational licenses.� The division has not matched data with the Department of Economic Development (for professional licenses) since 1998 and has never matched data with the Department of Conservation (for recreational licenses).� Auditors conducted both matches and found delinquent, non-custodial parents who could lose such licenses.� For example, auditors found 9 professionally licensed parents who owed $1.2 million in support, including a licensed doctor who owed $300,000.� Auditors also found a parent with a recreational license who owed $37,611 in support.� (See page 7)

In addition, the division's limited use of drivers' license suspensions did produce collections. �A July 2001 division report showed 18,774 delinquent, non-custodial parents who could lose their drivers' licenses.� Division staff threatened about 26 percent of these parents with license suspension, and obtained payment agreements in 23 percent of these cases.� These agreements yielded $2 million in the last six months of 2001. �(See page 8)

Checking tax returns could help find missing non-custodial parents

The division identified 176,279 cases with no address or employer information for the delinquent, non-custodial parents.� Auditors, through the Department of Revenue, checked recent income tax returns on 101 delinquent parents and found address and employer information in 15 cases.� Division staff said they do not check income tax returns since they already electronically record address and employer information from the State Directory of New Hires. �Nonetheless, audit tests showed income tax information as another resource to locate delinquent parents. �(See page 8)

More use of private contractor could increase collections

When parents do not receive the child support owed to them, they often turn to the state for welfare benefits.� While the state pays these parents assistance, the parents give the state the right to collect future support.� This assignment allows the state to collect the unpaid support and keep up to the welfare amount it is paying the custodial parent.

This simplified, hypothetical example explains the above scenario:� Consider a mother who did not receive $100 a month in child support for 3 months. �She can apply to the state for financial assistance through welfare and let the state try to collect the support. �The state could decide to pay her $50 per month in welfare benefits and then try to collect the unpaid child support.� If the state can collect the full $400 owed - the past due amount ($300 for three months) and the current month's support ($100) - �the mother receives the first $250 and the state could keep $150 (the welfare amount for 3 months).

The state hired a private contractor to help recover the money it spent on welfare.� The state's portion of this uncollected amount could be as much as $236 million going back to 1977 when the state started collecting child support. �However, restrictive state guidelines only allow the contractor to handle a small percentage of these cases. �During a 14-month period, the state documented referring only 688 of about 5,700 cases eligible for contractor collection.(See pages 5, 10 and 18)

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