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SUMMARY
The Office of the Auditor General has conducted a performance audit of the Arizona Department of Economic Security (Department), Division of Child Support Enforcement (Division). This audit was completed pursuant to the provisions of Laws 1996, Second Regular Session, Chapter 290, which defined the scope of this performance audit to include five areas: the Division’s effectiveness, customer service operations, debt calculations, privatization efforts, and the statewide automated case management system (ATLAS). While audit work was conducted in all areas, this report focuses on the Division’s customer service operations, debt calculations, and privatization efforts. This report also includes information about program funding and the Division’s appeal process. A second report due July 31, 2000, will focus on the remaining two areas: ATLAS operations and overall effectiveness.
The Division administers the federally mandated child support enforcement program. The Division’s mission is to help families become or remain self-sufficient by ensuring that families receive court-ordered child support payments from the noncustodial parent. In Arizona, anyone needing program services can receive them at no cost. These services include locating noncustodial parents, establishing paternity, and placing withholding orders on noncustodial parents’ paychecks to ensure that child support is paid. For families who receive public assistance, the State retains the right to the child support payment up to the amount of public assistance the family received.
The program collected nearly $160 million in child support payments in fiscal year 1998, and as of February 1999, it had a caseload of approximately 277,000. The program costs about $60 million a year to administer. The federal government generally pays 66 percent of the program’s costs and the State pays the remaining 34 percent. The Division provides program services in 7 of Arizona’s 15 counties, county attorneys provide services in 6, and a private contractor provides services in 2.
Possible Revenue Shortfalls
Signal Need for Division to
Assess Funding Options
(See pages 11 through 17)
The Division is projecting a revenue shortfall of about $1.2 million or more for the program during fiscal year 1999 and in each of the next two fiscal years. These shortfalls are projected to occur even though the Legislature approved an increase in the Division’s General Fund appropriations of nearly $2 million in fiscal years 2000 and 2001. Several factors contribute to this anticipated shortfall, including likely decreases in several of the funding sources the State has traditionally used to provide its share of operating costs, and increased costs brought on by such things as welfare reform and salary adjustments. The shortfalls could become even greater if the federal government follows through with possible reductions in its share of funding for the program.
Deciding how to address these projected shortfalls may also involve making other fundamental decisions about the program. For example, if recovering costs is considered a fundamental purpose of the program, one option is to charge fees for the services provided, which is an approach some states take. On the other hand, if the paramount purpose is to help any participating family become or remain self-sufficient, general tax revenues may be the more appropriate program revenue source. As a starting point in studying the various funding options, the Division should work with the Child Support Coordinating Council, a body established by statute as a forum for developing and coordinating policies regarding the program.
Customer Service Operations in
Maricopa County and the
Pima County Attorney’s Office
Need Improvement
(See pages 19 through 25)
Call centers established to improve the quality of child support enforcement customer service in Maricopa County and the Pima County Attorney’s Office are not doing an effective job. Customers trying to call either center encounter busy signals, often wait on hold for many minutes once they do connect, and often hang up before the wait is over. For example, auditors called the Maricopa center 222 times during a test period and received busy signals on 176 of these attempts. When they got past the busy signals, they usually waited on hold for 10 minutes or more (the center’s goal is to put callers on hold for no more than 5 minutes). Auditors had similar experiences when they made test calls to the Pima County Attorney’s Office call center.
Although the problems are similar at both call centers, the reasons for these problems are different. In Maricopa County, many positions are vacant. For example, the center had at least 10 of its 54 positions unfilled on at least one-third of the days it was operating in 1998. It appears that high turnover and the required staff qualifications impact the Maricopa center’s ability to hire and retain call center representatives. The Pima County Attorney’s Office call center was more fully staffed, but its employees
must perform other duties, such as sorting the mail and handling walk-in customers,
and until recently did not appear to be receiving enough training to answer inquiries efficiently.
Additional Steps Would Help Solidify
the Division’s Progress in Recording
and Calculating Child Support Debts
(See pages 27 through 30)
Although the Division has made substantial progress in addressing past problems with recording and calculating child support monies owed (debts), some refinements are still needed in its processes for managing this debt information. Accurate debt information is important for ensuring that the custodial parent receives the proper child support payments and the State takes appropriate enforcement actions when payments are not received. Improvements the Division has already made include better training for the employees who record and calculate debts, more reviews of their work by supervisors, and periodic audits of a sample of cases. The refinements the Division needs to make include analyzing the data it collects on a county-by-county basis, and ensuring that all child support offices conduct supervisory reviews of the debt work performed by staff.
The Division Needs to Better
Monitor Its Appeals Process
(See pages 31 through 35)
The Division needs to improve its oversight of the administrative appeals process provided to individuals wanting to contest enforcement actions. The 1996 Welfare Reform Act provided states with strong new enforcement tools, such as the ability to administratively order employers to withhold child support payments from a noncustodial parent’s take-home pay without obtaining a court order. These stronger powers heighten the need to ensure that enforcement actions follow due process safeguards mandated in state law and Division policies. While both Arizona law and Division policy provide for an appeals process (known as an administrative review) to help protect individuals’ due process rights, the Division currently lacks important centralized management information that would help it ensure that reviews are conducted in an appropriate and timely manner.
Other Pertinent Information
(See pages 37 through 41)
To respond to the Legislature’s statutory charge for this audit, auditors also analyzed
the Division’s privatization efforts. The Division contracts with several private vendors who provide a variety of child support enforcement services including centralized payment processing, collection services, and genetic testing. During fiscal year 1999, the Division estimates the total contracting costs will be about $6.5 million. Although Arizona’s privatization efforts are in line with other states’ efforts, Auditor General staff identified two services privatized in other states that are not privatized in Arizona: customer service call centers and legal services.
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