Tier Provides Update Regarding Ohio Child Support Subcontract

Business Wire, June 24, 2004

RESTON, Va. -- Tier Technologies, Inc. (Nasdaq:TIER), a leading provider of transaction processing and packaged software and systems integration solutions for public-sector clients, announced today that it has been notified by Affiliated Computer Services, Inc. (ACS), the prime contractor to the state of Ohio for the state's child support central collection and disbursement unit, of ACS's decision not to renew Tier as subcontractor under this contract, effective June 30, 2004.

ACS is the prime contractor to the Ohio Department of Administrative Services and the Department of Job and Family Services, providing child support payment receipt processing services and overall project management under this contract. Tier is a subcontractor to ACS, providing a range of services including training and start-up service, the processing of outgoing payments, direct deposit enrollment, and exception processing.

The contract ACS signed with Ohio was announced in September 2002 with an initial term ending June 30, 2003, an optional one-year renewal through June 30, 2004, and optional renewals every two years through June 30, 2009. Tier teamed with ACS in the development of the Ohio child support central collection and disbursement unit solution and proposal that resulted in ACS being awarded the prime contract. Tier continues to work with ACS as a subcontractor in Illinois and New York. The base contract renewal for Illinois is June 30, 2006, and the base contract renewal for New York is May 31, 2007.

"While we teamed with ACS to win the Ohio project and expected to work through June 30, 2009, we are disappointed that ACS has chosen not to renew this subcontract," said James R. Weaver, Tier's Chairman and Chief Executive Officer. "Although ACS exercised its unilateral right not to renew our subcontract and gave no specific reason for the non-renewal, we do not believe the decision was related to performance issues. Tier has an exemplary child support payment processing record, and has operated child support payment centers in ten states, processing more than 20 million child support payments valued at over $3 billion annually."

ACS's decision not to renew the Ohio subcontract will have no impact on Tier's third fiscal quarter ending June 30, 2004.

Tier expected the Ohio child support contract to represent $1.6 million of total revenue in the fourth fiscal quarter ending September 30, 2004. After taking the non-renewal of the Ohio contract and the completion of the EPOS Corporation acquisition on June 1, 2004, into consideration, Tier now projects total revenue for the fourth fiscal quarter to be $30.0 million, GAAP earnings per diluted share of $0.06 to $0.07, and core earnings per diluted share of $0.07 to $0.08. The difference between GAAP and core earnings per diluted share includes costs relating to the Walnut Creek office consolidation, legal and other costs to comply with the Department of Justice subpoena, and legal and other costs associated with the CalPERS terminated contract.

About Tier

Tier is a leading provider of transaction processing and packaged software and systems integration services for public-sector clients. We combine our understanding of enterprise-wide systems with domain knowledge enabling our clients to rapidly channel emerging technologies into their operations. We focus on sectors that we believe are driven by forces that make demand for our services less discretionary and are likely to provide us with recurring long-term revenue streams. Tier is included in the Russell 3000(R) Index. More information about the Company is available at www.Tier.com.

Statements made in this press release that are not historical facts, are forward-looking statements that are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995.

Each of these statements is made as of the date hereof based only on current information and expectations that are inherently subject to change and involve a number of risks and uncertainties. Actual events or results may differ materially from those projected in any of such statements due to various factors, including but not limited to the potential loss of funding by clients, including due to government budget shortfalls or revisions to mandated statutes; failure to achieve anticipated gross margin levels with respect to individual projects, including due to unanticipated costs incurred in fixed-price or transaction-based projects; the timing, initiation, completion, renewal, extension or early termination of client projects, including the remaining subcontracts with ACS; the Company's ability to realize revenues from its acquisition of EPOS Corp. and its business development opportunities, and achieve cost savings from its restructuring activities and integrating EPOS' operations and staffing; the Company's ability to recruit, train and retain consultants and key personnel, including EPOS personnel; and unanticipated claims as a result of project performance, including due to the failure of software providers or subcontractors to satisfactorily complete engagements.