Audit Report on the Timely Processing of Child Support Payments by the Administration for Children’s Services

EXECUTIVE SUMMARY

The mission of the Administration for Children’s Services (ACS) is to ensure the safety and well-being of New York City children. The mission of the ACS Office of Child Support Enforcement (OCSE) is to ensure that "non-custodial" parents (i.e., parents who do not have custody of their children) provide financial support for their children.

Courts issue child support orders so that custodial parents (clients) can receive financial support for their children from non-custodial parents (respondents). When an order is issued, OCSE establishes a child support account on the Child Support Management System (CSMS), an automated system maintained by the New York State Department of Social Service (State DSS). OCSE is responsible for taking enforcement action against respondents who do not pay support as ordered by the court. In 1992, State DSS entered into a contract with Lockheed Information Management Services, now known as Affiliated Computer Services (Affiliated) to collect and disburse child support payments on behalf of local social service districts in New York State. New York City is one such district. All moneys paid by respondents are forwarded to Affiliated’s processing center in Albany.

As of June 30, 2001, there were 208,251 active child support cases in New York City. As a result of court orders, in Fiscal Year 2001, respondents were to pay a total of $558.9 million in child support payments; $446.9 million (80%) of that amount was collected.

The objective of our audit was to determine whether child support payments are processed and forwarded to custodial parents in a timely manner, and whether OCSE disburses appropriate payments to clients who receive public assistance.

The time period reviewed in this audit was Fiscal Year 2001.

To gain a general understanding of OCSE procedures in processing child support payments, we reviewed relevant Federal and New York State social service laws, as well as OCSE agency directives.

To determine whether payments to child support recipients were made in a timely manner, we obtained a list of all payments made in March 2001. From the 324,951 payments Affiliated received that month, we selected a sample of 50 payments of $1,000 or more and compared the dates that Affiliated received the payments to the dates that it was required to disburse them, and the dates the payments were actually disbursed to clients.

To determine whether child support payments were sent to qualified clients, we verified whether those in our sample of 50 payments were on public assistance (PA) or not on public assistance (non-PA).

To assess OCSE efforts in identifying clients whose payments were placed in suspense accounts (i.e., money sent in by respondents that could not be immediately applied to client accounts), we reviewed 50 randomly selected payments from the population of 1,017 that OCSE placed in suspense in March 2001.

This audit was conducted in accordance with Generally Accepted Government Auditing Standards (GAGAS) and included tests of the records and other auditing procedures considered necessary. This audit was performed in accordance with the New York City Comptroller’s audit responsibilities as set forth in Chapter 5, § 93, of the New York City Charter.

Child support payments are generally processed and forwarded to custodial parents within federally mandated timeframes. For custodial parents who are receiving public assistance, OCSE correctly identifies their status and payments are appropriately disbursed to State DSS and, if applicable, a portion is disbursed to the custodial parents themselves. Furthermore, the internal controls established by OCSE and State DSS over child support payments provide reasonable assurance that payments are forwarded to custodial parents within federally mandated time frames.

Forty-seven (94%) of the 50 sampled payments were sent to clients within federally mandated time guidelines. The remaining three were delayed because they were placed on hold for various reasons—for instance, to await confirmation of an address change. These funds were then distributed to the appropriate parties (to custodial parents and, for parents receiving public assistance, to State DSS).

Of the 50 cases we reviewed, 23 involved custodial parents who were on PA during the period for which the payments were applicable. The PA status recorded in CSMS for these parents reconciled with information recorded in the State WMS system. Payments for these cases were properly forwarded to State DSS; none of the payments for the remaining 27 cases involving non-PA custodial parents was forwarded to State DSS.

Of the 50 suspense payments we reviewed, OCSE applied 30 (60%) to the appropriate accounts within the agency’s informal 30-day standard. Another 15 were applied in 33 to 364 days, and five were still in suspense as of April 11, 2002. For the 45 payments that were applied to accounts, OCSE identified the clients an average of 67 days after the payments went into suspense, more than twice as long as the agency’s informal standard. We were unable to determine whether OCSE followed its procedures in investigating these cases, however, because officials did not provide us adequate documentation of their efforts as we requested. As a result, we were unable to verify whether OCSE exhausted all efforts to identify the correct accounts for these cases or that it did so as quickly as possible.

While OCSE does have a Customer Service Unit to handle inquiries from clients and respondents, it does not formally track the resolution of such inquiries. As a result, OCSE may be hindered in (1) tracking the unit’s effectiveness, and (2) identifying any significant trends regarding Affiliated’s processing of child support payments.

The audit resulted in four recommendations, specifically, that OCSE should:

• Require Suspense Unit staff to more fully document its efforts (e.g., directory searches, correspondence sent), including the dates of each of their investigative efforts, to identify the correct custodial parents for suspense payments. Management should use such information to evaluate the Suspense Unit’s effectiveness.
• Require Suspense supervisors to review all payments that remain in suspense more than 30 days to ensure that staff have exhausted all efforts to identify the correct custodial parents.
• Review every month the age of payments remaining in suspense in order to track the Suspense Unit’s effectiveness in identifying the correct custodial parents as quickly as possible.
• Devise a method for tracking and aggregating customer inquiries and resolutions to help ensure that any systemic issues regarding child support payments are quickly identified and resolved.

The matters covered in this report were discussed with ACS officials during and at the conclusion of this audit. A preliminary draft was sent to ACS officials and was discussed at an exit conference on May 20, 2002. On May 23, 2002, we submitted a draft report to ACS officials with a request for comments. We received a written response from ACS on June 7, 2002. In its response, ACS agreed with the audit’s findings and recommendations, and stated:

"ACS was pleased to have confirmation from the Comptroller’s audit report that (1) child support payments are generally forwarded to custodial parents within federal mandated timeframes, (2) internal controls established by ACS’ Office of Child Support Enforcement (OCSE) and the State Department of Social Services are adequate to ensure that payments are disbursed to custodial parents within mandated timeframes and (3) OCSE correctly identifies custodial parents on public assistance and ensures that payments to them are appropriately adjusted."