All told, hundreds of millions of dollars were sitting around in bank accounts, a casualty of outdated information technology, understaffing, and plain old indifference. And despite evidence suggesting that matters could be greatly improved if the federal government put pressure on the states to audit and improve their child-support systems, officials at the Department of Health and Human services told the Monthly they were reluctant to intervene and that the states should fix the problem on their own.
But once our article appeared, Congress began to take a closer look. In December 2002, Sen. Charles Grassley (R-Iowa), chairman of the Senate Finance Committee–which oversees federal child-support enforcement–ordered the General Accounting Office to examine the problem of undisbursed child support. Released this past April, the GAO’s final report confirms many of the problems to which the Monthly had originally drawn attention, resulting in millions of dollars in payments delayed or never reaching families. Moreover, the GAO found the states’ accounting of undistributed funds to be woefully inaccurate and unreliable. Gerri Jensen, president of the Association for Children for Enforcement of Support, says the report paints a picture of a system that is “50 percent broken”–collections are up, but distribution isn’t. “They’re supposed to just keep records and transfer the money. I don’t know if anybody understands, but that is their whole job,” she says. “It’s appalling.”
Moreover, the GAO found that some of the federal agencies which are supposed to help make sure that child support gets where it’s supposed to haven’t been doing a very good job. Take the Office of Child Support Enforcement (OSCE), the federal agency charged with monitoring child-support distribution. Our article had revealed that even though OSCE was aware that support distribution was a mess, agency officials believed the states were doing the best job they could. When questioned by GAO investigators, the officials argued that OSCE didn’t have enough staff to audit undistributed support without substantially slowing down their performance of other duties, such as auditing collections and cost-effectiveness.
Sen. Grassley wasn’t convinced. “The department seems to want to find excuses instead of solutions when it comes to verifying and reviewing undistributed collection data,” he said in a statement issued after the release of the GAO report. “It’s important that we stop guessing and start knowing the extent and scope of the problem of undistributed child support payments.” When I called OSCE commissioner Sherri Heller, she bristled when I mentioned Grassley’s statement, but conceded that she’d changed her own approach since she first told the Monthly back in 2002, that she counts on the news media, rather than the federal government, to push states to perform better. “I’ve come so far in my thinking since we first talked,” she says. Last year, the OSCE began to ask states to report more specific information about their backlogs. (Even the GAO was unable to come up with reliable total figure for the amount of undistributed child support held nationwide.) At the very least, those numbers will provide a clearer picture of the magnitude of the problem.
Another federal agency criticized by the GAO is the Department of the Treasury. Under federal law, adults who owe child support can now have their tax refunds confiscated and sent to state agencies for distribution to the custodial parents. However, in cases where the deadbeat parent had remarried, those agencies were allowed to hold the checks for up to six months, in case the couple had filed a joint tax return and the new spouse asked the IRS for his or her portion of the refund. The problem was that many states had gotten used to sitting on all checks from all remarried parents for the full six months–despite evidence, the GAO reported, that most spouses filed their claims upfront, along with their tax returns, obviating the need for a delay. In such cases, the IRS will now calculate the amount owed to the custodial parent and the new spouse simultaneously, which means the states can immediately distribute whatever child support is owed. The new procedure takes effect for the 2005 tax season, says Martin Mills, an assistant commissioner in the Department of Treasury’s Financial Management Service, a sister agency to the IRS. “We have been talking about it for some time, but it’s never been given to us as a priority until recently, based on our conversations with the General Accounting Office.”