Child Support Enforcement Ignores Tools to Collect Tens of Millions, Auditors Find - Southern Maryland Headline News

Child Support Enforcement Ignores Tools to Collect Tens of Millions, Auditors Find

By Megan Poinski,

(September 13, 2011)—Millions of dollars in child support payments are going uncollected because the Child Support Enforcement Administration has not been utilizing tools put in place to recoup unpaid funds, including wage garnishing, suspending professional licenses and seizing bank funds.

A report released Monday by the Office of Legislative Audits found that the agency, a division of the Department of Human Resources, had longstanding and pervasive problems. A few of them include:

-- The agency had not initiated wage garnishing for 8,763 noncustodial parents, who were collectively late with $88 million in payments.

-- State-issued professional licenses had not been suspended for 6,966 people who owed a total of $47 million in child support.

-- The agency also did not garnish funds from bank accounts of 25,550 people who owed between $500 and $2,500 in child support, worth $33 million in total.

According to the report, total unpaid child support statewide is $1.7 billion – about three times what the agency collected in child support payments in fiscal year 2010.

“There are a lot of areas where we think there’s opportunities for additional collections,” said Legislative Auditor Bruce Myers. He called some of the missed opportunities “frustrating,” and said that some of the problems have been longstanding.

In written response to the audit, DHR staff agrees with all of the findings, and has outlined ways that the problems have been or will be corrected.

“We are working very hard to address the issues as best we can,” said DHR Communications Director Ian Patrick Hines.

The General Assembly’s Joint Audit Committee will hold a hearing next week on the report – as well as ones previously done on the Family Investment Administration and Social Services Administration, which are also both part of DHR.

“All of them have a lot of money involved, and there’s a lot of potential impact there,” Myers said.

No wage withholding

If a parent is not paying child support, the agency has the power to withhold that money from his or her wages. About two-thirds of child support collections come from payments withheld from paychecks in fiscal year 2010. According to the report, the state’s database of new hires is supposed to be crosschecked with people who owe child support every 20 days.

Auditors obtained a database of wage earners and the listing of parents who owe child support, and compared them. The report states they found 8,763 people who owed child support, had income, and were not having it taken out of their wages. Together, these people owed $88 million in child support, and made $43 million in the third quarter of 2010.

They took a closer look at 22 of these people, and found that 10 of them should not have their wages garnished because they were making payments in other ways.

The other 12 had been selected for manual reviews by local child support offices in order to initiate wage withholding. However, those reviews were not done, and federal government reports that prompted the agency to look at those wage earners were ignored in two of the agency’s largest jurisdictions.

Furthermore, employers had not reported that eight of those 12 people had started working. A third-party vendor prepares the new-hire database, and the report states that there were some who were concerned about passing the data on to that vendor. However, no attempts were made to solve the data issue or find out which employers had not reported – which is required by law and can result in a fine.

Few licenses pulled

The agency is also authorized to revoke state-issued professional licenses for people who have not paid child support.

In fiscal year 2010, the agency only found five people whose licenses should be pulled. Auditors, using databases from 15 professional licensing divisions, came up with almost 7,000.

Two major things caused the discrepancy. First, the agency only had databases from seven of the 15 professions that are licensed. They were missing databases on professions such as insurance agents and teachers, as well as general business licenses.

The agency also applied extremely strict guidelines to determine matches between the two databases. Names needed to be identical in order to be a match, so if a person’s insurance license was issued to “Jim Smith,” and his child support account was under “James Smith,” the two would not be counted as a match.

Auditors took a close look at 25 of their matches from the licensing databases, and found that 17 people were not paying their child support and could have had their licenses suspended.

Myers said that this is a problem that the agency has had for years.

“They have been very slow in getting anything going,” he said.

The agency can also suspend driver’s licenses of people who are two months or more behind on payments. However, auditors found, the driver’s license records are subjected to the same strict scrutiny as the business license records, and a slight difference in name causes the two not to match. In 2010, 30,361 driver’s licenses were suspended – but 7,929 were rejected.

Auditors examined 18 of these rejections. Agency staff had not reviewed 15 of them to find out if there were actual matches in the data. Auditors did review them, and found 12 matches. Agency staff examined the remaining three and matches were found, but the information was not reported to the Motor Vehicles Administration so the licenses could be suspended.

The report states that this finding has been present in the last four audits.

No bank seizures

The law also allows the agency to take child support funds out of bank accounts if a person owes more than $500 and is more than two months late with a payment. However, auditors found that the agency was only going after bank accounts of people who owed more than $2,500 in child support. There were 25,550 people who could have had their bank funds taken, but escaped through this loophole, the report states.

The agency also did not go after money in checking accounts, saying they had concerns about the person who owed child support meeting living expenses. However, auditors found 1,052 people with checking accounts who owed more than $500 – and 51 of those had balances of more than $10,000.

Other problems

Several other issues were identified in the report. These include:

-- A failure to check and correct improper Social Security numbers. This is mainly because local offices in Prince George’s County and Baltimore City – two of the largest jurisdictions – had no processes in place to look into incorrect numbers and fix them.

-- Unpaid child support was not withheld from payments to parents who are also vendors to the state. Auditors found 119 people who could have had their unpaid support withheld.

-- The agency did not monitor the private operator hired to run the program in Baltimore City closely enough to ensure that proper compliance and enforcement actions were taken.

-- A large office took its time in reviewing late payment reports, with nine out of 20 reviewed cases not moving forward for weeks to months after the agency’s 30-day deadline.

-- Careful comparisons were not done between state death records and the database of custodial parents receiving child support. Child support checks were processed to 362 parents who had been dead for more than a month, auditors found.

-- Invoices from local entities who did work for the agency were not verified – and were not for standard amounts.

-- Several employees had unnecessary access to databases

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