Money for nothing: states are finally collecting money from deadbeat dads. Now, if they'd only get it to the moms

Washington Monthly, Oct, 2002 by Sandy Bergo

Instead of recommending new mandates to force states to solve the problem, the Bush administration turned to consultants--and excuses. Excuses that minimize the problem, by pointing out that undistributed funds are only three percent of total collections; excuses that obscure the problem, by pointing out that a portion--they've never bothered to figure out how much--of the undistributed money can be held legally for six months because it comes from tax refunds. To confuse matters more, the states are allowed, under federal law, to take two days to process the undistributed money before paying it out. But no one knows how much of the money is being processed at any given time. (Heller is "wrestling" with whether to mandate more detailed reporting from the states.)

The consultants, meanwhile, are hired both to give "technical assistance" to states that are looking for causes and solutions and to survey states to hear their explanations for why collected money sits undistributed. Not surprisingly, these consultants have discovered the same problems activists and local officials have been complaining about for years: difficulties in finding good addresses for custodial parents, for instance, or payments coming into the agency without enough identifying information. Even more frustrating is that much of what the consultants have reported was already known to HHS. The last time the agency did an audit of these funds was in 1997, when the department looked at 11 states and found most were underreporting the amounts that were undistributed. In some states, the audit found, "undistributed collections were not always being handled and processed in a timely manner; unidentified collections were not being researched in a timely manner and unclaimed checks which were returned to States' treasurers were not being reported properly."

But thanks to the 1996 welfare law--which, in part, was intended to reduce paperwork for the states--HHS doesn't audit the programs any more. Instead of audits, HHS relies on "self-assessments" performed by the states themselves--that is, the same states that have already been shown to underreport the problem. And without audited figures to guide them, HHS officials admit they don't really know the true size of the problem. "I can't quantify how much of the [$738 million] that the states report is a problem of reporting and how much is a problem of it not getting to families," says Heller.

Show Them the Money

"This is a national problem," says Nick Young of Virginia. He is a recent past president of a national group of child-support directors and speaks to his counterparts around the country about the issue of undistributed collections. "We have a saying here, `It is better to have not collected it, than to collect it and let it sit,'" says Young. The amounts each state reports as undistributed range widely, from a low of $332,000 in Colorado to a high of $190 million in California. State audits and news accounts have told stories of troubles getting money to families in Illinois, Tennessee, Ohio, Florida, Georgia, and California. Young says Virginia started working on the problem after meeting with Jensen of ACES a few years ago. "She was right," he says. "We weren't paying attention to it. We meant well," Young says. "It was not through malfeasance. It wasn't mean-spiritedness. There was just too much going on."