Child Support Report - August 1996

Privatization: An Interview with Montana's IV-D Director Mary Ann Wellbank

CSR: What is privatization and why are child support agencies getting so interested in it?

MAW: Privatization is a public-private partnership, with each sector contributing its expertise. Child support agencies are interested because managers are looking for ways to meet public expectations and hold down caseload size without expanding government. The private sector has flexibility to add employees, equipment, and state-of-the-art technology. And there are a number of private companies with good IV-D track records that can offer alternatives to government delivery of services.

CSR: What are some examples of privatized functions?

MAW: They range from provision of full IV-D services to collection of arrearages, legal services, systems development, automated voice response systems, central payment processing, hospital based paternity establishment, project-based consulting, and blood testing, among others. States have contracted out blood testing from the start of the child support enforcement program.

CSR: And in Montana?

MAW: We contract for system maintenance and blood testing and have a few other projects in the works. But our most innovative contract is for a centralized customer service phone unit in Helena, which became fully operational in November, 1995. Our goal is twofold: to provide prompt and courteous service to callers, and to allow caseworkers to focus on collecting support for children. Montana is the only State in the nation with this type of contract. The contractor is responsible for answering all incoming calls promptly and for settling 95 percent of the calls without passing them through to a caseworker. The 12 customer service reps, who are contractor employees, have access to the automated system and can reply to questions callers may have concerning specific cases or child support policies in general. Of course, the contractor adheres to confidentiality requirements. Comprehensive records of calls are maintained on the computer, and the customer service manager can monitor calls for quality control. Overall, we are pleased with the unit's progress. Our caseworkers appreciate the opportunity to concentrate on casework, and our customers are adapting to it very well.

CSR: What are some of the benefits?

MAW: Customer service representatives can give undivided attention to their callers. This enables caseworkers to give their undivided attention to the cases they are working on. Since we began we have moved more cases into enforcement and project a 25 percent increase in collections. We think our Customer Service Unit has a lot to do with that. On the 22,000 phone calls we get each month, the vendor generates a report which tells us who is calling e.g., attorney, obligor, obligee. Also recorded: the time of day of each call; how quickly each call is answered; length of the call; how long a caller is kept on hold; and the nature of the call. This information can help us to pinpoint areas where we need to improve services or where clarification of an issue may be needed.

CSR: How about complaints?

MAW: We've had relatively few about two dozen. And when we do get one we respond quickly with a personal letter of assurance from me to the individual. We're planning to survey our customer base on this system in the very near future, to get a better handle on overall customer satisfaction.

CSR: How is privatization faring around the country?

MAW: I think it's going well. It's still fairly new, and there may have been a few negative incidents, but on the whole the experience is positive. Most of the states that have privatized services have brought in people who have real expertise in child support enforcement and sensitivity to what the program is trying to achieve. Vendors are looking for long term contracts. The next few years will see some evaluation results and then we'll have a better idea of how effective privatization is in terms of costs, increased collections, and program operations.

CSR: Is it a threat to public employees?

MAW: It's seen that way by some. Some public employees may lose their jobs when services are contracted out to private firms, but many are hired by the contractors. While there's no question that privatization puts pressure on public employees to increase performance, it's a myth, in my opinion, that private employees are somehow better than public. And cost savings from privatization have not yet been substantiated. In our present environment, however, privatization is a fact of life. Buying services from a private firm is a way to add resources to meet the needs of citizens without expanding government. And contractors often do have more flexibility to hire, to buy equipment, and to give performance incentives. In addition, the competition generated by the potential for partial or full privatization of government services can be healthy and can inspire innovative approaches to problem solving. I think we need to keep some perspective, however, about privatization. This is a public-private partnership. The state is still accountable to the public for the program and managers need to carefully develop and closely monitor all contracts. States also need to clearly articulate their expectations in contracts to ensure that vendors understand and are able to fulfill their requirements. In any event, state employees must buy-in to make the project successful. In Montana, we reassured our employees about privatization by making them part of the decision-making process, and I think that has paid off in a feeling of partnership between them and our contractor.

CSR: Any advice for states that may be considering privatization?

MAW: First determine what your agency does best. Then decide what, if anything, a contractor may be able to do as well as or better. Then look at how best to merge the two. How can the private sector enhance the agency mission? Partnership is the key. In Montana we have a full time employee whose responsibility is to examine ways to develop and improve the public-private partnership. Privatization should be seen not as a threat but as a way to help us improve our services to children and families. If we can do that, everybody wins.

CSR: Thank you.

Colorado's Privatized Payment System

Prior to the passage of the enabling legislation which created the Registry, Colorado's child support enforcement (CSE) program faced ongoing challenges to control the collection and disbursement of support payments. With an existing system that was cumbersome, inefficient, and not always customer friendly, these challenges included delays, redundant processing, barriers to technology, and inconsistent service delivery.

In an effort to re-engineer payment processing for the child support enforcement program, Colorado established a joint workgroup of court and child support practitioners to recommend a new way of processing payments. The following objectives were established for the central registry:

• Create a single point of contact for IV-D payment receipt, disbursement, billing, and customer service;
• Cut out duplicate court and CSE payment processing;
• Apply technology and achieve economies of scale;
• Reduce processing time; and
• Enhance services to clients.

In addition, employers have benefitted by having only one payment location and the option of remitting a single check for all withholding. Average processing time is down to two days (from two to three weeks), while the number of staff who process payments has declined from 50 to 12.

Perhaps the most exciting opportunity gained through central processing is the application of payment processing technology. Basic technology includes mail extraction, remittance processing, scanning technology, and microfilm. Having a central bank account has opened the door to a number of electronic services, such as Electronic Funds Transfer/Electronic Data Interchange (EFT/EDI) in receiving funds from employers and transmitting funds to other states.

As other states have added EFT/EDI capability, we have quickly converted from paper checks to electronic payments. Other electronic payment methods (such as direct deposit, automatic withdrawal, and pay-by-phone) offer innovative, reliable, and customer friendly ways for parents to receive and pay child support.

The most recent FSR service, now being pilot tested, is a no cost debit card bank account issued to unbanked obligees who are not AFDC participants.

This bank account, established by a direct deposit authorization from the obligee, offers a flexible and safe alternative to obligees who previously cashed their checks and carried cash. If you would like further information about Colorado's Family Support Registry, call Craig Goellner at (303) 866-5728.

Craig Goellner is the Systems Manager in Colorado's Division of Child Support Enforcement.

Stricter Paternity Cooperation Rules

As a condition of receipt of welfare benefits, mothers are currently required to cooperate with paternity establishment efforts, but often this does not occur until after the mother has begun receiving benefits.

The national rate for paternity establishment in welfare cases is about 40 percent. By making the receipt of benefits conditional on cooperating at the time of application, it is expected that the IV-D agency will be more successful in locating noncustodial parents, establishing paternity, and securing support.

Now an applicant will be required to give the name of the alleged father and other information sufficient to verify identity. This means a social security number, date of birth, past or present address, telephone number, past or present employer, or other information that would locate or enable service of process on the person. This would also be the case when an AFDC recipient's eligibility is redetermined.

Current rules allow an individual to attest to the lack of information, under penalty of perjury. The revised regulation replaces the attestation rule with a provision that would allow states to establish criteria for determining cooperation in cases where the applicant or recipient cannot reasonably be expected to know the required identifying information.

Under the proposed regulations, the determination of cooperation will be made during the application process, and AFDC applicants will be referred to the IV-D agency within two days of filing an application. Currently, the AFDC agency has two days after assistance is granted to notify IV-D.

To protect the custodial parent and children against potential violence, the existing good cause exceptions are not changed under the proposed regulations, and rights to fair hearings regarding cooperation still hold. Also under current requirements state or local agencies are prohibited from denying, delaying, or discontinuing benefits pending good cause determinations. To ensure that clients are similarly protected from delays in processing the applications, the proposal extends this requirement to the cooperation determination. For instance, if the name and identifying information provided by the applicant cannot be verified within the application processing timeframe (no more than 45 days from the filing date), and the delay is not due to inaction of the applicant, then AFDC benefits must be authorized once other eligibility factors have been met.

Once a determination of noncooperation is made, the penalty does not change under the proposed regulation. As under current law, only the mother's AFDC benefits would be denied. Assistance for the eligible children would be paid in the form of protective payments, i.e. the benefits for the children would be paid on the children's behalf to someone other than the noncooperating mother.

Several states have argued that the child support agency rather than AFDC should make the decisions regarding cooperation and good cause for not cooperating in identifying the father. Although this proposal makes no change in this area, states that are interested in proposing a regulatory change to have the child support agency make the decisions are encouraged to request a waiver under section 204 of the Intergovernmental Cooperation Act of 1968.

Interested persons and agencies are invited to submit written comments on these proposed regulations no later than September 16, 1996. They should be sent to the Assistant Secretary for Children and Families, Attention: Mr. Mack Storrs, Director, Division of AFDC/JOBS, Fifth Floor, Office of Family Assistance, 370 L'Enfant Promenade SW, Washington, DC 20447. For further information, phone (202) 401-9289.

Children First Concept Goes international

Calling the conference, a first step toward establishing reciprocal declarations of cooperation, Ross welcomed participants from the Bahamas, Barbados, the British Virgin Islands, California, Dominica, the Dominican Republic, New Jersey, Puerto Rico, Texas, Trinidad and Tobago, and the Virgin Islands. Participants resolved to extend the Children First concept across international boundaries, so that child support obligations can be enforced between them.

Joanne Krudys, Region II's child support enforcement program manager, and Jens Feck, the region's Puerto Rico based program specialist, played central roles in planning the conference. Feck and the U. S. State Department's Gloria DeHart provided on-site facilitation during two-days of meeting.

Puerto Rico's Administration for Child Support sponsored the event. Co-sponsors included the National Child Support Enforcement Association, the Family Law Section of the American Bar Association, and Banco Popular.

OCSE Announces New Division of State and Local Assistance

Michelle Jefferson, who has served OCSE in a variety of important assignments, is the new division's acting director. Michelle worked on the task force to implement the original law establishing the child support enforcement program, directed the agency's public information and inquiries branch, and, most recently, was special assistant to the director of the division of program operations.

Michelle expects to work closely with OCSE's regional offices in providing states and localities with a strengthened level of technical assistance and training support. To ensure a cooperative approach, the division has two workgroups, one for training and one for technical assistance.

These are composed of OCSE central and regional office staff, as well as representatives of state and local CSE agencies, and other organizations involved in child support enforcement initiatives. We must work together as full partners, Michelle says, if we are to be successful in improving the lives of children and families across America.

She will be ably assisted by Jeff Ball, who will serve as chief of the division's newly created Technical Assistance Branch, and his staff, and by Yvette Hilderson Riddick, who continues as chief of the National Training Center, and her staff.

If you would like to know more about the division and its activities, please send a note to Michelle Jefferson, Acting Director, State and Local Assistance, at OCSE, 370 L'Enfant Promenade SW, Washington, DC 20047 or call her at (202) 401-9374.

New Hire Update

Systems specialists and programmers in ACF are preparing for the new data, scheduled to arrive in OCSE early in August.

The data, which by conservative estimates could amount to more than seven million new hire records being received, will be compiled and crossmatched with existing cases in the Federal Parent Locator Service (FPLS) and the Federal Tax Refund Offset Program.

States will be sent data matches and use the information for the establishment and enforcement of child support orders and for the establishment of paternity.

How valuable is new hire data? Many states using it have significantly increased their collections. Massachusetts, for example, reported an increase $15.4 million as a result of new hire reporting, while Iowa attributed an additional $5 million to it.

Interstate cases currently make up about 30 percent of the child support caseload, so there is considerable opportunity for new hire reporting to have an impact on collections and the establishment of support orders and paternity. In addition, it shows promise in aiding location efforts.

When an individual leaves a job and goes to another state, location can be far more difficult. Crossmatching with new hire data can sometimes make a difference, so to take advantage of this one-time-only crossmatch, states are being encouraged to submit new locate cases to FPLS as close to September 1 as possible.

In a recent match of 9,000 cases by New York's new hire reporting program, 4,000 cases were located in which no order had been established. Other states using new hire data report successfully tracking individuals who change jobs and states frequently and thus being able to reopen cases once considered hopeless.

North Carolina Child Support Initiative Gathers Momentum

The second phase, taking effect in July, 1996, allows for restrictions on occupational, professional, and business licenses. The third phase, to begin in December, 1996, allows restrictions on driving and hunting licenses, as well as restrictions on the registration of motor vehicles.

The results of the first phase have been promising: collections were up $3 million in the first quarter of this year.

North Carolina's initiatives include a comprehensive campaign to raise public awareness of child support enforcement, the distribution of most wanted posters, and closer work with organizations at the community level. On March 29, 1996, State child support director Mike Adams appeared on the Phil Donahue show to discuss the State's child support initiative and share with the audience issues currently facing the child support community in North Carolina.

Intent on making the public aware of the importance of child support enforcement to the children of North Carolina, the State Office of Child Support is continuing to explore other ways to increase public awareness through radio, television, billboards, and transit advertising. For more information, contact Dan Pickett, Public Awareness Manager, at (919) 571-4114 x 220.

Loren Southard, an intern in OCSE during the spring semester of this year, is a graduate student in Public Administration at George Washington University.

Mail Busters Overcome Backlog in Prince George's County

Begun in early 1996, Mail Busters is part of Prince George's County's SWAT project (Special Work Action Team). A basic principle of the County's child support enforcement program is that empowering staff and encouraging teamwork improves services to customers. SWAT establishes and implements quick fixes to problems or issues that may impede the agency's delivery of services, while long-term solutions are being developed.

The Mail Busters Team illustrates SWAT's concept. With a caseload of more than 34,000 customers, the agency receives over 6,000 pieces of mail every month, and 3,700 pieces are routed to its enforcement unit. Before Mail Busters, each enforcement worker, on top of regular duties, was responsible for reviewing, investigating, and taking action on all mail received, making it difficult to respond quickly. Mail began to pile up.

Mail Busters took on the backlog. The Team consists of a review group and a processing group. The review group, comprised of a cross-section of workers from different child support units, meets one hour each day to read, sort, and route all incoming mail. Mail for the enforcement unit is further sorted into subject categories and forwarded for response to the processing group, which is made up of staff who volunteer to work flexible hours, including Saturdays.

By May, 1996, after only four months in operation, Mail Busters was handling more than 50 percent of the enforcement unit's mail and had reduced processing time for most inquiries from six weeks to one week. This achievement has enabled enforcement workers to spend more time doing what they are paid to do: enforce delinquent cases. Prince George's County OCSE continues to set the standard for innovative techniques, said the agency's Executive Director, Geraldine Jones.

Agency cost effectiveness is at an all-time high this year, owing partly to the contribution of the Mail Busters Team. Not only is OCSE responsive, it is cost effective, said County Executive Wayne K. Curry. They collect more than $9.60 in support for each program dollar spent. This greatly exceeds the national average of $3.30. An additional benefit: Mail Busters was implemented at no increase in expenditures.

For more information about the Prince George's County Office of Child Support Enforcement's Mail Busters Team Project, contact Sharon Eurich at (301) 952-4943.

Opportunities

Coming Soon . . . OCSE 6th National Training Conference

Targeted for IV-D directors (or their designated managers) and IV-D trainers, this conference places emphasis on how we can achieve success as partners through strategic planning.

To continue building our partnership, we are also inviting several IV-D directors to participate as presenters and/or facilitators.

Together, participants and faculty from OCSE, states, and co-sponsors Policy Studies Inc. and Service Design Associates will explore timely, major issues impacting the child support enforcement community.

Space is limited to two persons per state: one IV-D director or designated manager who is involved in strategic planning and one IV-D trainer.

Date and Place: September 16-17, Holiday Inn Hotel and Suites, Alexandria, Virginia.

Please contact Mae Rowlett of the National Training Center at (202) 401-3443 for further information.