oversight

Child Support Enforcement: Strong Leadership Required to Maximize Benefits of Automated Systems

Published by the Government Accountability Office on 1997-06-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Requesters




June 1997
                 CHILD SUPPORT
                 ENFORCEMENT
                 Strong Leadership
                 Required to Maximize
                 Benefits of Automated
                 Systems




GAO/AIMD-97-72
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Accounting and Information
      Management Division

      B-275037

      June 30, 1997

      The Honorable Henry J. Hyde
      House of Representatives

      The Honorable Lynn C. Woolsey
      House of Representatives

      This report responds to your request that we update our 1992 report entitled Child Support
      Enforcement: Timely Action Needed to Correct System Development Problems (GAO/IMTEC-92-46,
      Aug. 13, 1992). Specifically, we addressed (1) the status of state development efforts, including
      costs incurred, (2) whether the Department of Health and Human Services had implemented
      our 1992 recommendations, and (3) whether the Department was providing effective federal
      oversight of state systems development activities. This report makes several recommendations
      designed to increase the likelihood that states will develop child support systems that perform
      as required and to minimize the risk of costly technology decisions and wasted federal and state
      expenditures during the development and implementation of these systems.

      As agreed with your offices, unless you publicly announce the contents of this report earlier, we
      will not distribute it until 30 days from the date of this letter. At that time, we will provide
      copies to the Secretary of Health and Human Services; the Director, Office of Management and
      Budget; appropriate congressional committees; and the state child support enforcement offices
      included in this review. We will also make copies available to others upon request.

      You can reach me at (202) 512-6253 or by e-mail at willemssenj.aimd@gao.gov if you have any
      questions concerning this report. Major contributors to this report are listed in appendix V.




      Joel C. Willemssen
      Director, Information Resources Management
Executive Summary


             According to the Department of Health and Human Services (HHS), the
Purpose      number of child support cases in which collections are being made is
             about 20 percent. As a result, millions of children may not be adequately
             provided for or may need to rely on welfare. Child support payments will
             become even more important to recipients who may cease to be covered
             by welfare under recently enacted legislation.

             In an attempt to increase collections of child support, the Congress in 1980
             authorized federal funding to pay up to 90 percent of states’ costs for
             operating and developing automated child support enforcement systems.
             This has amounted to over $2 billion to date. Concerned about how
             effectively this money has been spent, Representatives Henry J. Hyde and
             Lynn C. Woolsey asked GAO to update its 1992 report on this subject,1
             examining (1) the status of state development efforts, including costs
             incurred, (2) whether the Department of Health and Human Services had
             implemented GAO’s 1992 recommendations, and (3) whether the
             Department was providing effective federal oversight of state systems
             development.


             The Office of Child Support Enforcement (OCSE) is part of HHS’
Background   Administration for Children and Families. The Child Support Enforcement
             Program was established in 1975 to help strengthen families and reduce
             dependence on welfare by helping to ensure that the responsibility for
             supporting children was placed on parents. The states operate programs to
             locate noncustodial parents, establish paternity, and obtain support
             orders, along with enforcing actual collections of those court-ordered
             support payments. The federal government—through OCSE—funds
             66 percent of state administrative and operating costs, including
             automated systems, as well as 90 percent of expenses associated with
             planning, designing, developing, installing, and/or enhancing automated
             systems.

             The Family Support Act of 1988 required that statewide systems be
             developed to track determination of paternity and child support
             collections; it set a deadline of October 1, 1995, for implementation and
             federal certification of such systems. However, only a handful of states
             met the deadline. The Congress then passed legislation extending the
             deadline by 2 years, to October 1, 1997.



             1
              Child Support Enforcement: Timely Action Needed to Correct System Development Problems
             (GAO/IMTEC-92-46, Aug. 13, 1992).



             Page 2                                          GAO/AIMD-97-72 Child Support Enforcement
                   Executive Summary




                   To meet the criteria for federal funding, state systems were required to
                   carry out the following specific functions: case initiation, case
                   management, financial management, enforcement, security, privacy, and
                   reporting. In determining whether a state met these criteria, OCSE reviewed
                   the advance planning document (APD) that each state had to develop and
                   submit, describing its proposed system.

                   To obtain a broad picture of systems development in the states, GAO
                   analyzed OCSE and state documents concerning systems development,
                   visited and conducted structured interviews with officials responsible for
                   systems development in 6 states and 1 county, held a focus group
                   discussion with child support enforcement personnel from 14 states and 1
                   county, and surveyed all 10 HHS regional offices. GAO also discussed
                   systems issues with HHS and OCSE officials and staff, both in Washington,
                   D.C., and at five regional offices.


                   It is too early to judge the potential of fully developed automated systems,
Results in Brief   yet bringing the benefits of automation to bear on child support
                   enforcement appears to have played a major role in locating more
                   noncustodial parents and increasing collections. As caseloads have risen
                   sharply in recent years, the percentage of cases in which funds are being
                   collected (about 20 percent) has been maintained. The increase in total
                   dollars collected has been significant. According to HHS, in fiscal year 1995,
                   almost $11 billion was collected—80 percent higher than the amount
                   collected in 1990.

                   While automated state child support systems are being developed, many
                   may not be certified by the October 1, 1997, deadline. As of March 31,
                   1997, only 12 states’ systems had been certified. In fact, OCSE’s director of
                   child support information systems predicted that as many as 14 of the
                   states—which account for a significant proportion of the nation’s total
                   child support caseload—may miss the October 1997 deadline.
                   Furthermore, states have underestimated the magnitude, complexity, and
                   costs of their systems projects. Costs have increased rapidly in the past 5
                   to 6 years. Systems development costs for fiscal year 1995 alone were just
                   under $600 million, and over $2.6 billion has been spent since 1980 for
                   county and statewide systems development.

                   GAO’s 1992 report discussed significant problems in federal oversight and
                   monitoring of state activity and made three recommendations. However,
                   only one has been completely implemented: OCSE now works with its audit



                   Page 3                                  GAO/AIMD-97-72 Child Support Enforcement
                             Executive Summary




                             division to identify and resolve systems problems. GAO’s recommendations
                             to (1) suspend federal funding when major problems exist and (2) require
                             states to initiate corrective actions when problems are first identified were
                             only partially addressed.

                             OCSE’s oversight of state child support systems has been narrowly focused
                             and, as a result, not effective or timely in assessing the states’ systems
                             approaches and progress. The agency does not evaluate or assess states’
                             systems development projects using a disciplined, structured approach.
                             OCSE believes it lacks the technical expertise and resources to be involved
                             at critical points in the systems development process. The agency’s role
                             has been primarily limited to document review and after-the-fact
                             certification when the states request an inspection of completed systems.
                             Therefore, OCSE has allowed some funds to be spent without ensuring that
                             states were progressing toward effective or efficient systems. And, while
                             OCSE has shared some lessons learned, its oversight has operated on a
                             state-by-state basis. Lacking this nationwide perspective has hindered the
                             agency’s ability to provide proactive leadership to the states.

                             As added systems functional requirements of the newly enacted welfare
                             reform legislation come into play, it will be increasingly important that
                             child support enforcement systems work as envisioned and that OCSE
                             monitor progress on a broader scale. Many recipients may find that they
                             no longer qualify for welfare benefits, with child support being their only
                             remaining income.



Principal Findings

Systems Yielding Benefits,   Automating child support information systems appears to have improved
Deadlines May Not Be Met     caseworker productivity, allowing automatic searches of other
                             databases—including those containing motor vehicle registrations, state
                             revenue information, and new employee registries—and eliminating the
                             need to develop voluminous paper documentation. Automated systems
                             also help track court actions relating to paternity and support orders and
                             amounts of collections and distributions.

                             These benefits, however, have been expensive. Since 1980, states have
                             spent a combined $2.6 billion on automated systems—with $2 billion of
                             this total being federally funded. Individual state estimates of how much




                             Page 4                                 GAO/AIMD-97-72 Child Support Enforcement
                        Executive Summary




                        will be required to complete their systems are, in many cases, double
                        initial projections.

                        The 12 states that currently have certified systems represent only
                        14 percent of the national caseload. Many of the larger states that OCSE
                        believes may miss this year’s deadline have officially reported to OCSE and
                        to the HHS Office of Inspector General that they will meet the date. If they
                        do not, about 44 percent of the national caseload will not be gaining the
                        benefits of full automation.


Problems Impede         Federal and state governments and private industry recognize that
Progress; Earlier GAO   investing time and resources in defining system requirements has a large
Recommendations Not     program payoff in the development of systems that are completed on time,
                        are cost-effective, and meet the needs of their users. Since major systems
Fully Implemented       decisions hinge on such baseline requirements, these must be known early
                        in the systems development process. OCSE was expected to develop federal
                        requirements for state child support enforcement systems by 1990, yet
                        final requirements were not issued until June 1993. According to OCSE, the
                        delay was caused by its own failure to use an incremental approach in
                        defining requirements and a long review process.

                        OCSE’s delay in providing states with final systems requirements slowed
                        some states’ progress in developing their systems and contributed to
                        contractor problems. One state official noted that the delay contributed to
                        many contract modifications and, eventually, to the contract’s termination.
                        According to officials of another state, late functional requirements and
                        unrealistic deadlines increased costs and delayed the project. In addition,
                        one of HHS’ regional offices stated that “states began their projects prior to
                        receiving final requirements; however, [they] were reluctant to finalize
                        anything until the requirements were issued.”

                        Increased software reuse is an effective means of improving the
                        productivity of computer software development, improving the reliability
                        of the software itself, and reducing development time and cost. In October
                        1990, OCSE mandated that states transfer systems currently in use in other
                        states. However, it took this step before assessing the availability of
                        sufficient systems to be used in such transfers. In fact, only eight certified
                        systems were then in operation—and they were based on the 1984
                        amendments. No automated systems had been certified based on the more
                        extensive 1988 act, making it highly unlikely that the available systems




                        Page 5                                  GAO/AIMD-97-72 Child Support Enforcement
                          Executive Summary




                          would be suitable for transfer to other states.2 As a result, many states
                          attempted to transfer incomplete and/or incompatible systems, causing
                          added costs and delays.

                          Finally, OCSE decided not to fully implement GAO’s 1992 recommendation to
                          suspend federal funding when major problems existed and require states
                          to implement corrective actions as soon as problems were identified. OCSE
                          recently stated that it requires corrective action when problems are noted
                          but explained that it did not consider withholding funding because it
                          believes the federal government should work with the states in rectifying
                          deficiencies. However, it will now temporarily hold up funding; this has
                          been done with several states when variations in cost figures were found
                          or when OCSE had concerns about the system’s direction.


Inadequate Federal        OCSE does not effectively use the APDs to proactively oversee, monitor, or
Oversight Hinders State   control major investments in systems development projects. The APD and
Systems Development       the states’ annual updates—advance planning document updates
                          (APDUs)—are the basic communications and analysis tools that OCSE uses
                          in assessing the progress and status of states’ systems, and whether
                          systems meet necessary functional requirements. OCSE does not require a
                          disciplined, structured approach for developing or reviewing systems
                          because, according to agency officials, it lacks the technical expertise and
                          resources needed to be involved at critical points in the development
                          process. Instead, OCSE primarily focuses on assessing whether states are
                          meeting systems functional requirements and will meet the October 1,
                          1997 deadline.

                          A disciplined, structured approach to systems development entails finite
                          phases that must be completed and assessed before moving forward. For
                          example, systems planning and analysis must precede design, design must
                          precede development, and development must precede implementation.
                          These are major milestones at which one would expect and be able to
                          judge progress and determine whether any corrective actions are
                          necessary. If work proceeds before an earlier phase is complete, problems
                          can arise from condensing the work of two or more phases into one time
                          period, thereby truncating the process. While states may provide OCSE—in
                          their APDs or APDUs—with information on all phases of their systems
                          development, and OCSE and HHS regional officials may discuss these phases

                          2
                           The Child Support Enforcement Amendments of 1984 authorized the federal government to provide
                          states with 90-percent funding for computer hardware and software to operate certified automated
                          child support systems. The Family Support Act of 1988 ended the 90-percent funding as of
                          September 30, 1995.



                          Page 6                                            GAO/AIMD-97-72 Child Support Enforcement
                           Executive Summary




                           with state officials, the agency has not used this information effectively at
                           important milestones to assess system progress and redirect inadequate
                           state development efforts, losing an opportunity to correct problems early
                           in the process.

                           A critical factor is whether the APD plans are properly carried out and
                           reflect what the states are actually doing. State officials noted that the
                           APDs are not useful for managing systems development. According to one,
                           “[APDs] are an administrative exercise to justify obtaining funding.” With
                           OCSE’s emphasis on deadlines, states are often forced to present
                           inaccurate—some feel impossible—schedules if they are to continue
                           receiving funding.

                           Further, while OCSE is required by law to certify state systems, these
                           certification reviews come too late for timely redirection of systems
                           development if needed.3 Since the agency conducts certification
                           inspections upon state invitation, OCSE is rarely in a position to promptly
                           intervene and solve problems. When the agency does note problems,
                           correction at that point will inevitably be more time-consuming and
                           expensive than it otherwise may have been.

                           In general, OCSE’s state-by-state monitoring approach inhibits effective
                           leadership. Because of the magnitude of the child support caseload, the
                           complexity and importance of the automated systems, and the large
                           amounts of funds invested, a broader, nationwide oversight that would
                           look for common themes, lessons learned, and systemic problems, is
                           essential for this program’s success. Without this perspective, it is difficult
                           to help states manage systems and control costs. Post-implementation
                           reviews after state certification would also give OCSE insight into systems
                           issues and help it to further assist the states’ developmental efforts. With
                           additional funding from the welfare reform legislation, OCSE now plans to
                           conduct post-implementation reviews.


Welfare Reform Increases   New welfare legislation enacted last summer—the Personal Responsibility
Need for Strong Federal    and Work Opportunity Reconciliation Act of 1996—dramatically altered
Leadership                 the nation’s welfare system into one that requires work in exchange for
                           time-limited assistance. Since child support is an integral part of welfare
                           reform, the states are required to operate a child support enforcement
                           program meeting federal requirements in order to be eligible for

                           3
                            OCSE is required to certify that the states’ systems meet the functional requirements as described in
                           the agency’s implementing regulations.



                           Page 7                                               GAO/AIMD-97-72 Child Support Enforcement
                      Executive Summary




                      Temporary Assistance for Needy Families block-grant funding.4 Guidance
                      the states need to prioritize systems requirements and changes is not yet
                      available. OCSE plans to release the functional requirements on an
                      incremental basis—issuing requirements on selected systems components
                      as soon as policy decisions are final. This will be critical if states are to
                      meet welfare reform’s new requirements for their systems while at the
                      same time working to complete basic child support enforcement systems.
                      Another demand on systems development will be ensuring that new
                      statewide child support enforcement systems, as well as existing systems
                      that interface with the new systems, process date-sensitive information
                      correctly in the year 2000 and beyond.5


                      GAO is making several recommendations to increase the likelihood of
Recommendations       developing state automated child support systems that will perform as
                      required. To maximize the federal government’s return on costly
                      technology investments, GAO recommends that the Secretary of Health and
                      Human Services direct and ensure that the Assistant Secretary of the
                      Administration for Children and Families take the following actions:

                  •   develop and implement a structured approach to reviewing automation
                      projects so that significant systems development milestones are identified
                      and the costs of project decisions are justified during the entire effort;
                  •   suspend federal funding for any state that is experiencing delays and
                      problems and that is not following generally accepted systems
                      development practices until the state redirects its approach;
                  •   conduct post-implementation reviews to identify any lessons learned, to
                      ensure that OCSE incorporates into its oversight role a nationwide
                      assessment of child support systems that provides a broader perspective
                      on costs, systemic problems, potential solutions, and innovative
                      approaches; and
                  •   assess the impact of welfare reform on existing child support programs
                      and develop timely technical requirements focusing on critical systems
                      changes needed by established deadlines.

                      GAOis also making other recommendations that are contained in
                      chapter 6.




                      4
                       This replaced the Aid to Families With Dependent Children program.
                      5
                       Many older systems that will still be in operation in 2000 were programmed using 2 digits to represent
                      the year—such as “97” for 1997. In such a format, 2000 is indistinguishable from 1900.


                      Page 8                                               GAO/AIMD-97-72 Child Support Enforcement
                       Executive Summary




                       GAO  requested written comments on a draft of this report from the
Agency Comments        Secretary of Health and Human Services or her designee. The
and GAO’s Evaluation   Department’s comments stressed the difference in perception between the
                       Department and GAO regarding the appropriate role of HHS’ Administration
                       for Children and Families. Notwithstanding this difference, HHS generally
                       agreed with GAO’s recommendations that OCSE evaluate its technical
                       resources, conduct post-implementation reviews, assess the status of
                       systems nationwide, and define in a timely manner the requirements
                       arising from recent welfare-reform legislation.

                       In addressing the question of role, HHS commented that it sees OCSE’s role
                       as one of assisting states in meeting congressionally-mandated deadlines
                       for certification of automated child support enforcement systems. The
                       Department disagreed with GAO’s view that OCSE should provide more
                       active, involved monitoring and oversight of state activities in this area,
                       especially at critical points in the development cycle. Along with
                       questioning the appropriateness of suspending funding for problem
                       projects, officials further stated that making the recommended changes in
                       the monitoring process would increase the administrative burden on
                       states.

                       GAO believes that HHS has interpreted OCSE’s role too narrowly, failing to
                       take adequate responsibility for helping to ensure the success of state
                       systems, especially in light of the $2.6 billion expended on child support
                       enforcement systems—$2 billion of it in federal funds. By taking a reactive
                       approach toward oversight—reviewing state progress annually or only
                       upon request after major decisions have been made—OCSE does not
                       monitor systems projects at key points in their development, thereby
                       missing the opportunity to intervene and help redirect states when
                       problems arise. As a result, federal dollars have been invested unwisely on
                       projects that were allowed to proceed in the wrong direction.

                       In terms of administrative burden, GAO believes that the streamlining it is
                       advocating would not impose an additional administrative process on
                       states. In any event, HHS officials did not address the burden—on states,
                       support recipients, and the federal government—of failing to effectively
                       complete development of these systems.

                       These comments are discussed in chapter 6, and reprinted in appendix IV.




                       Page 9                                 GAO/AIMD-97-72 Child Support Enforcement
Contents



Executive Summary                                                                                  2


Chapter 1                                                                                         14
                         The Child Support Enforcement Program                                    14
Introduction             States Are Developing Federally Funded Information Systems to            16
                           Support the Program
                         Recent Welfare Reform Legislation                                        18
                         Objectives, Scope, and Methodology                                       18

Chapter 2                                                                                         21
                         Automated Systems Appear to Be Helping States                            21
Systems Yield            Billions Spent for Automated Systems Not Yet in Compliance               22
Benefits, but Deadline      With Federal Mandates
May Not Be Met
Chapter 3                                                                                         27
                         Delayed Functional Requirements Slowed Progress                          27
Problems Impeded         Premature Policy Mandate Also Delayed Development, Increased             30
Earlier Progress as        Costs
                         GAO Recommendations Only Partially Addressed Despite Delays              33
Recommendations            and Escalating Costs
Not Fully
Implemented
Chapter 4                                                                                         36
                         APD Use Inadequate to Redirect States                                    36
Inadequate Federal       Certification Reviews Narrow in Focus and Performed Too Late             42
Oversight and              for Effective Oversight
                         Lack of Nationwide Perspective Inhibits Effective Leadership             45
Leadership Continue
to Hinder States’
Development Efforts




                         Page 10                             GAO/AIMD-97-72 Child Support Enforcement
                     Contents




Chapter 5                                                                                        47
                     Welfare Reform Features Automated Systems                                   47
Welfare Reform       OCSE Plans to Address Welfare Reform                                        49
Places New Demands   Millennium Changes Are Also Important to Automation                         50
on Child Support
Systems
Chapter 6                                                                                        52
                     Recommendations                                                             53
Conclusions,         Agency Comments and Our Evaluation                                          55
Recommendations,
and Agency
Comments
Appendixes           Appendix I: Total Cost for Each State’s Child Support                       62
                       Enforcement System and the Federal and State Shares of These
                       Expenditures for Fiscal Years 1981-1996
                     Appendix II: Total Federal Cost for Each State’s Child Support              64
                       Enforcement System Including Enhanced and Regular Funding
                       for Fiscal Years 1981-1996
                     Appendix III: Overview of Systems Development Phases                        66
                     Appendix IV: Comments From the Department of Health and                     67
                       Human Services
                     Appendix V: Major Contributors to This Report                               79


Figures              Figure 1.1: Total Child Support Collections, Fiscal Years                   15
                       1990-1995
                     Figure 2.1: Cumulative Funds Spent on Child Support                         23
                       Enforcement Systems, Fiscal Years 1981-1996
                     Figure 2.2: Certified and Conditionally Certified Child Support             25
                       Enforcement Systems as of March 31, 1997
                     Figure 4.1: State Plans for Software Programming and Unit                   39
                       Testing




                     Page 11                                GAO/AIMD-97-72 Child Support Enforcement
Contents




Abbreviations

ACF        Administration for Children and Families
AFDC       Aid to Families With Dependent Children
AIMD       Accounting and Information Management Division
APD        advance planning document
APDU       advance planning document update
CFR        Code of Federal Regulations
GAO        General Accounting Office
HHS        Department of Health and Human Services
IMTEC      Information Management and Technology Division
OCSE       Office of Child Support Enforcement
SSAIS      State System Approval Information System


Page 12                            GAO/AIMD-97-72 Child Support Enforcement
Page 13   GAO/AIMD-97-72 Child Support Enforcement
Chapter 1

Introduction


                      The general well-being of children and families is a critical national policy
                      goal. Current priorities are aimed at protecting children and preserving
                      families, including meeting the needs of millions of parents who annually
                      seek child support for their eligible children. However, when noncustodial
                      parents fail to provide financial support, millions of children must rely on
                      welfare programs. In 1995, over 9 million of the 13.6 million people
                      receiving benefits from the Aid to Families With Dependent Children
                      (AFDC) program were children.1


                      The Congress created the national Child Support Enforcement Program in
The Child Support     1975 as title IV-D of the Social Security Act. This intergovernmental
Enforcement Program   program involves federal, state, and local governments. The Department of
                      Health and Human Services’ (HHS) regional office staff and the Office of
                      Child Support Enforcement (OCSE) oversee the state-administered
                      programs. The purpose of the program is to increase collections from
                      noncustodial parents and reduce federal, state, and local welfare
                      expenditures. As shown in figure 1.1, reported collections in fiscal year
                      1995 were 80 percent higher than they were in 1990.




                      1
                       As of July 1, 1997, AFDC will be replaced by the Temporary Assistance for Needy Families block
                      grant.



                      Page 14                                            GAO/AIMD-97-72 Child Support Enforcement
                                       Chapter 1
                                       Introduction




Figure 1.1: Total Child Support
Collections, Fiscal Years 1990-1995
                                       Total collections in billions of dollars
                                       11                                                                      10.8

                                       10                                                           9.9

                                        9                                              8.9
                                                                          8.0
                                        8

                                        7                     6.9
                                                 6.0
                                        6

                                        5

                                        4

                                        3

                                        2
                                      27%             29%                29%                 27%                   26%                 25%
                                        1

                                        0
                                                 1990        1991         1992        1993         1994         1995



                                       Source: Child Support Enforcement—Twentieth Annual Report to Congress (draft), for the period
                                       ending September 30, 1995 (HHS/ACF/OCSE). We did not independently validate this
                                       information.




                                       The number of reported child support cases has also increased 60
                                       percent—from 13 to 20 million cases over that same time period. As a
                                       result, according to HHS, the number of cases in which collections are
                                       being made has remained about 18 to 20 percent.




                                       Page 15                                          GAO/AIMD-97-72 Child Support Enforcement
                        Chapter 1
                        Introduction




                        Families entering the Child Support Enforcement Program require
                        different combinations of services at different times, and child support
                        enforcement agencies are directly responsible for providing these services.
                        For instance, in some cases the child’s paternity has not been established
                        and the location of the alleged father is unknown. In these cases, the
                        custodial parent needs help with every step: locating the alleged father,
                        establishing paternity, obtaining and enforcing a child support order, and
                        collecting the support payment. In other cases, the custodial parent may
                        already have a child support order; in such a case, the child support
                        enforcement agency must review and possibly modify the order as a result
                        of changes in the employment status or other circumstances of the
                        noncustodial parent before tackling enforcement.

                        State child support enforcement programs are organized in significantly
                        different ways. They report to different state agencies and follow different
                        policies and procedures. In addition, relationships between the state child
                        support enforcement programs and other state agencies differ. These
                        characteristics usually vary by the type of service delivery structure, levels
                        of court involvement required by state family law, population distribution,
                        and other variables. For example, some state child support agencies
                        manage their programs centrally (operating a number of state offices),
                        while others allow the counties or other governmental entities or even
                        private companies to manage the programs locally.2


                        Growing caseloads, increased costs, and social demands have given rise to
States Are Developing   the need to implement expedited processes for establishing and enforcing
Federally Funded        payment of child support. As such, automation was (and still is) seen by
Information Systems     many, including the federal government, as an effective tool for addressing
                        this need. In 1980, the Congress promoted the development of automated
to Support the          systems that could improve the performance of the child support program.
Program                 Public Law 96-265 authorized the federal government to pay up to 90
                        percent of the states’ total costs incurred in planning, designing,
                        developing, installing, or enhancing these systems.3 The systems are
                        required by OCSE to be implemented statewide and be capable of carrying
                        out mandatory functional requirements, including case initiation, case
                        management, financial management, enforcement, security, privacy, and



                        2
                         Child Support Enforcement: Early Results on Comparability of Privatized and Public Offices
                        (GAO/HEHS-97-4, Dec. 16, 1996).
                        3
                         For the purposes of this report, the term systems refers to the hardware and software components of
                        the child support enforcement systems.



                        Page 16                                             GAO/AIMD-97-72 Child Support Enforcement
Chapter 1
Introduction




reporting.4 Incorporating these requirements can help locate noncustodial
parents and monitor child support cases. Since 1981, the federal
government has spent over $2 billion for automated systems to assist
states in collecting child support.

The Family Support Act of 1988 mandated that by October 1, 1995, each
state have a fully operational automated child support system that meets
federal requirements. At that time, the 90-percent development funding
was to be discontinued. In addition, if a state did not have its system
certified as fully operational by this date, the act declared that the state’s
child support program may have its program funding reduced. However,
by October 1, 1995, only five states had met the deadline. Therefore, the
Congress passed Public Law 104-35, extending the deadline to October 1,
1997.

Developing child support enforcement systems is a joint federal and state
responsibility.5 In providing most of the funding for systems, the federal
government, through OCSE, is responsible for providing leadership,
technical assistance, and standards for effective systems development.
OCSE is also responsible for assessing states’ automated systems and
ensuring that states are effectively using the 90-percent funding.6

To receive 90-percent federal funding for the development of an
automated child support enforcement system, a state is required to
develop and submit an advance planning document (APD) to OCSE,
describing its proposed system. The APD is reviewed by OCSE’s Division of
Child Support Information Systems and by HHS’ regional, program, and
financial management staff to ensure that the proposed system
incorporates the minimum functional requirements and will meet federal,
state, and user needs in a cost-effective manner. After the APD is approved,
OCSE provides 90-percent funding for the project and monitors its progress.
Federal regulations and OCSE guidance (1) require states to update their
APDs when projects have significant changes in budget or scope and
(2) give OCSE the authority to suspend funding if a state’s development

4
 A functional requirement is a requirement that specifies a function that a system or system
component must be able to perform.
5
 In HHS’ state systems advance planning document guide, the agency notes that the administration of
this program is a cooperative endeavor, with federal and state governments working together to
implement information systems. HHS provides leadership and direction and is responsible for
approving, monitoring, and certifying states programs—and ensuring that federal funds are spent
wisely.
6
 The federal government provides 66 percent of the costs incurred by states for operating child
support programs, which includes operating and obtaining automated systems. The “enhanced”
funding of 90 percent is paid to develop systems.



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                     Introduction




                     does not substantially adhere to its approved plan. When the state
                     considers its system complete, a state official requests that the federal
                     government certify that its system meets requirements. After certification,
                     a state is authorized to receive additional funding to maintain its
                     operational system.


                     While states are still trying to meet the challenges of the 1988 act, they are
Recent Welfare       also faced with newer challenges. The Personal Responsibility and Work
Reform Legislation   Opportunity Reconciliation Act of 1996 requires that states implement
                     specific expedited and administrative procedures intended to expand the
                     authority of the state child support agency and improve the efficiency of
                     state child support programs. In order to comply with the expedited
                     processes requirement, states have to meet specific time frames for
                     establishing paternity and establishing and enforcing support orders.7
                     Under current law their statewide systems must automatically perform
                     specific locate, establishment, enforcement, and case management
                     functions and maintain financial management, reporting, and under the
                     new law states’ security and privacy functions.8 In addition, under the new
                     law states must enhance their current statewide systems to electronically
                     interface with other federal and state agencies. This is needed to establish,
                     for example, central case registries and new-hire directories. Therefore, to
                     successfully comply with the welfare reform legislation, it is critical that
                     the states and OCSE have fully operational child support systems in place.


                     In 1992, in response to a request from the Senate Committee on Finance,
Objectives, Scope,   we reviewed HHS’ oversight of states’ efforts to develop automated child
and Methodology      support enforcement systems. In August 1992, we issued a report citing
                     major problems with oversight and monitoring of these development
                     efforts.9 We reported that while taking timely corrective action on known
                     problems is critical to developing well designed automated systems, OCSE
                     had not required needed changes in some states facing serious systems
                     problems. We, therefore, made recommendations to HHS for improvement.
                     On June 20, 1996, Representative Henry J. Hyde requested that we conduct

                     7
                      States must (1) establish support orders within 6 months of service in 75 percent of title IV-D cases
                     needing orders and within 12 months in 90 percent of cases, (2) take action to enforce delinquent
                     orders within 30 days (or 60 days if service is needed), (3) send advance notice of income withholding
                     within 15 days of location, and (4) meet additional time frames for interstate cases.
                     8
                      For example, states must establish automated registries of child support orders and directories of
                     newly hired employees to track and locate parents owing support.
                     9
                      Child Support Enforcement: Timely Action Needed to Correct System Development Problems
                     (GAO/IMTEC-92-46, Aug. 13, 1992).



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a follow-up review. Later, Representative Lynn C. Woolsey joined in this
request.

Our specific objectives were to determine (1) the status of automated state
systems, including costs, (2) whether HHS had implemented our 1992
recommendations, and (3) whether HHS was providing effective federal
oversight of state systems development.

To accomplish these objectives, we reviewed federal laws and regulations
on OCSE’s oversight of state development of automated systems. We
assessed OCSE systems guidelines, policies and procedures, and
correspondence with the states. We also interviewed officials in OCSE’s
Office of Child Support Information Systems and Division of Audit to
discuss their continued roles and responsibilities in overseeing the
planning, development, and implementation of state child support
enforcement systems.

To update our knowledge of automated systems issues, we analyzed state
planning documents, OCSE certification reports, and state audit reports of
automated systems. In addition, we reviewed financial reports produced
by OCSE’s statistical and reporting systems; however, we did not
independently verify data contained in these reports. We coordinated with
the HHS Office of Inspector General and reviewed, analyzed, and
summarized the results of its nationwide child support systems state
survey. We also interviewed selected contractors developing and
implementing child support enforcement systems. Further, we conducted
a focus group of 18 state officials, representing 14 states (California,
Connecticut, Delaware, Georgia, Iowa, Louisiana, Massachusetts,
Michigan, Minnesota, Missouri, Nebraska, New York, Ohio, and Texas) and
Los Angeles County to determine the benefits, barriers, and solutions to
developing automated child support systems.

We performed our work at OCSE headquarters in Washington, D.C. We also
surveyed all 10 HHS regional offices and visited 5 (Atlanta, Dallas, Denver,
New York, and Philadelphia) to gain an understanding of the history of
each state’s development effort and of OCSE’s role in providing regional
oversight and technical assistance. Further, we visited six states (Alabama,
California, Massachusetts, Ohio, Texas, and Washington) and Los Angeles
County. We selected these locations based on the following criteria: levels
of funding requested, methods used to develop systems (e.g., in-house,
contractor, and combination of in-house and contractor), caseload,
geographic location, phase of development (e.g., pilot, implementation,



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enhancement, in operation), and level of certification. During our site
visits we assessed the systems’ status, best practices, and barriers to
implementing systems using relevant components of our system
assessment methodology.10 We also reviewed various state and contractor
systems-related documents and correspondence and interviewed state
agency officials.

We conducted this work between August 1996 and March 1997, in
accordance with generally accepted government auditing standards. We
requested written comments from the Secretary of Health and Human
Services or her designee. The Inspector General provided us with written
comments, which are discussed in chapter 6 and reprinted in appendix IV.




10
 The System Assessment Framework: A Guide for Reviewing Information Management and
Technology Issues in the Federal Government (GAO/AIMD-10.1.12, August 1996).



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                           Many states have made progress in their automation projects, and state
                           officials report that the systems have already demonstrated benefits.
                           However, some states’ costs are twice as high as originally estimated, and
                           the extent of final costs is not yet known. Progress in developing systems
                           varies—some states have automated many features, while others are in the
                           earlier phases of development and may not be certified or operational by
                           the October 1, 1997, deadline.


                           According to state program and systems managers, child support
Automated Systems          enforcement systems have improved program effectiveness and worker
Appear to Be Helping       productivity by automating inefficient, labor-intensive processes and
States                     monitoring program activities. Systems have improved efficiency by
                           automating the manual tasks of preparing legal documents related to
                           support orders and calculating collections and distributions, including
                           interest payments. Further, automated systems can help locate absent
                           parents through interfaces with a number of state and federal databases
                           more efficiently than could the old, manual process. These systems have
                           also improved tracking of paternity establishment and enforcement
                           actions. The following examples show specific reported improvements in
                           program performance since states began developing their automated
                           systems.

                       •   According to one systems official, while it is difficult to attribute benefits
                           entirely to the system, “the system has changed the way business is done
                           in the child support office.” The automated system assisted the state’s staff
                           in increasing the number of parents located from almost 239,000 in fiscal
                           year 1995 to over 581,000 in fiscal year 1996—a reported increase of
                           143 percent. Additionally, while using the system from July 1994 through
                           December 1996, the staff increased the number of support orders
                           established by over 78 percent, the number of paternities established by
                           almost 89 percent, and child support collections by almost 13 percent.
                       •   Officials from another state noted that staff performance increased with
                           the new system because it gives staff a new tool to use to improve their
                           productivity. Collections per employee have more than doubled—from
                           about $162,000 to $343,000 annually. The system has also helped the state
                           reduce the time required to process payments: The turnaround time for
                           checks for nonwelfare custodial parents dropped from 29 days to
                           processing a payment in only seconds and issuing checks within 24 hours.
                       •   Officials from the same state also reported that the automated system
                           allowed cases to be viewed on-line by several individuals simultaneously,
                           eliminating the bottlenecks created by manually searching, retrieving, and



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                            delivering hard copy case files. Before the state implemented its new
                            system, 11 percent of the child support staff was dedicated to the manual
                            process of retrieving files.


                            States have spent billions of dollars on automated child support
Billions Spent for          enforcement systems. Costs for developing and operating these systems
Automated Systems           continue to mount, while progress in developing systems varies. Despite
Not Yet in Compliance       the escalating costs, only 12 systems have been certified, and as many as
                            14 states may not meet the October 1997 deadline.
With Federal
Mandates
Systems Costs Continue to   According to OCSE records, states have spent over $2.6 billion since the
Increase; Vary Widely       early 1980s to develop, operate, maintain, and modify county and
From State to State         statewide automated child support systems. Of these costs, the federal
                            government has paid 66 to 90 percent of states’ systems costs, amounting
                            to more than $2 billion. Since 1980, federal expenditures for child support
                            enforcement systems have risen dramatically. Figure 2.1 shows the history
                            of federal funding for these systems from fiscal year 1981 through fiscal
                            year 1996. As the chart reveals, federal spending escalated as states began
                            working to comply with the 1988 act. Appendix I provides the total
                            reported costs for each state’s child support system and the federal and
                            state shares of those expenditures, and appendix II provides the enhanced
                            and regular federal expenditures.1




                            1
                             We did not independently validate OCSE’s state and federal child support systems costs.



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Figure 2.1: Cumulative Funds Spent on Child Support Enforcement Systems, Fiscal Years 1981-1996

        Spending in millions of dollars
         1980: Congress authorizes 90-percent                       1988: Family Support   1991: States   1993:             1995:       1997: New deadline
3,000    "enhanced" funding for statewide systems                   Act mandates           must have      HHS/OCSE          Systems     (10/1/97)
                                                                    automated statewide    APDs for       issues require-   to be
                                                                    systems                mandated       ments for         operational
                                                                                           systems        systems           by 10/1/95



2,500




2,000




1,500




1,000




 500




   0

         1980        1982            1984           1986         1988           1990           1992           1994            1996


                   Total
                   Federal share


                                                     Note: We did not independently validate funds spent on child support enforcement systems.

                                                     Source: HHS.




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                          Although the 90-percent enhanced funding ended on October 1, 1995, the
                          Congress later retroactively extended it to October 1, 1997, for those states
                          having approved enhanced funding in their APDs as of September 30, 1995.

                          States generally underestimated the costs of developing and operating
                          child support enforcement systems. During our seven site visits, we
                          compared the projected costs in the original APDs with the most recent
                          estimates. While two sites’ original estimates were fairly accurate, the
                          remaining five were significantly understated. For example, in total,
                          current cost estimates for the states we visited are about twice as high as
                          originally planned. In addition, at least 10 states are now discovering that
                          their systems will cost more to operate once they are completed. While
                          these states expected cost increases as a result of added system
                          functionality, increased information storage, and the use of sophisticated
                          databases, estimated operating costs for some new systems may be even
                          higher than anticipated. For example, one state’s initial estimate showed
                          the new system’s data processing costs would be three to five times higher
                          than that of the old system. However, according to a state official, those
                          costs will likely be six to seven times higher than the current system’s
                          operating costs. Operating that state’s new system may cost nearly
                          $7 million more annually than the old system.

                          Further, costs for developing and operating child support systems have
                          varied greatly among the states—from a low of $1.5 million to a high of
                          $344 million. The difference can be attributed to a variety of factors,
                          including caseload size, whether the states or the counties administer the
                          child support program, the number of attempts states made to develop
                          child support enforcement systems, the way the systems were
                          developed—by modifying an existing system or developing a new one, and
                          the kind of system being developed.


Few States Certified as   Only five systems were certified and seven conditionally certified as of
Deadline Approaches       March 31, 1997. OCSE grants full certification when a system meets all
                          functional requirements and conditional certification when the system
                          needs only minor corrections that do not affect statewide operation.
                          Figure 2.2 indicates which states have certified and conditionally certified
                          systems as of March 31, 1997.




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Figure 2.2: Certified and Conditionally Certified Child Support Enforcement Systems as of March 31, 1997




                                        Certified

                                        Conditionally certified

                                        Not certified



                                            Source: HHS.




                                            The certified and conditionally certified states represent only 14 percent of
                                            the nation’s reported child support caseload. Further, according to OCSE’s
                                            director of state child support information systems, as many as 14




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states—6 with caseloads over 500,000—may not have statewide systems
that fully meet certification requirements in place by this October 1. These
states represent 44 percent of the nation’s child support caseload. OCSE
does not yet know how long it will take or how much it will cost to bring
these states into compliance with federal requirements. In addition, 2 of
these states that chose to update their existing systems rather than
develop new child support enforcement systems may need to redesign
their systems.

Responding to an HHS Office of Inspector General survey, 36 of the 42
states3 that are not certified reported that they will meet the 1997 deadline.
However, this task may well present a challenge for many of them. While
almost two-thirds of the states reported that they were either enhancing
operational systems to meet certification requirements or in the
conversion or implementation phases, the remaining one-third of the
states responding to the 1996 survey stated that parts of their systems are
only in the design, programming, or testing phases of systems
development—with major phases to be completed, including conversion
and statewide implementation.4 State systems officials in our focus group
considered conversion to be one of the most difficult problems and a
barrier to successful implementation.




3
 We are using the term state to refer to the 50 states plus the District of Columbia, Guam, Puerto Rico,
and the Virgin Islands.
4
 The Office of Inspector General’s survey was sent to the states in April 1996 and completed and
returned by August 13, 1996.



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                      All too often an organization’s inability to take basic but necessary steps to
                      decrease systems development risks leads to failure. Problems
                      consistently identified in reviews by GAO and others include information
                      systems that do not meet users’ needs, exceed cost estimates, or take
                      significantly longer than expected to complete. In its efforts to assist in the
                      development of automated, statewide child support enforcement systems,
                      OCSE is no exception. The agency did not define requirements promptly,
                      adequately assess systems issues prior to mandating a transfer policy, or
                      seek to identify and aggressively correct problems early in the
                      development process. The lack of sound, timely federal guidance, coupled
                      with some states’ own inadequate systems approaches, caused systems
                      development activities to proceed with increased risks.


                      The federal and state governments and private industry recognize that an
Delayed Functional    investment of time and resources in requirements definition has the
Requirements Slowed   biggest program payoff in the development of systems that are on time,
Progress              cost-effective, and meet the needs of its users. Major systems decisions
                      hinge on baseline requirements; these requirements, therefore, must be
                      defined early. Without them, reasonable estimates of the scope,
                      complexity, cost, and length of a project cannot be adequately developed.1
                      In addition, failure to clearly and accurately define requirements may
                      preclude alternatives, restrict competition, and further increase the risk of
                      cost and schedule overruns.2

                      According to OCSE’s director of state child support information systems,
                      the agency was expected to develop federal requirements for the statewide
                      systems by October 1990. However, OCSE did not publish federal
                      regulations—which described in general the program and automated
                      systems—until October 1992. The agency did provide draft systems
                      development guidance—functional requirements—to the states, but it was
                      not disseminated until July 1992. OCSE did not provide the states with final
                      systems functional requirements until June 1993.3




                      1
                        Mission Critical Computer Resources Management Guide, Defense Systems Management College
                      (September 1988).
                      2
                      Information Technology: An Audit Guide for Assessing Acquisition Risks (GAO/IMTEC-8.1.4,
                      December 1992).
                      3
                       Automated Systems for Child Support Enforcement: A Guide for States, U.S. Department of Health
                      and Human Services, Administration for Children and Families (Revised June 1993). (This guide
                      replaced draft guidance distributed in July 1992.)



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OCSE acknowledges that the federal requirements were late; it attributes
this primarily to its not using an incremental approach in releasing the
requirements to the states. Rather than issuing certain requirements as
they were defined, it waited until all requirements could be issued
together. This was done because OCSE believed that certain underlying
policy issues needed to be resolved before requirements could be made
final and released. In addition, because OCSE’s minimum requirements
were extensive and difficult policy issues needed to be resolved, the
review and approval process also contributed to the delayed issuance of
requirements. According to OCSE, it took time to assess policy issues,
determine the most effective way to automate related changes, and
accurately define related requirements. For example, according to OCSE,
before it could even begin to define requirements related to the
replacement of monthly mail-in notices (e.g., of a client’s child support
status) with telephone recordings, complex policy decisions had to be
considered.

Another example of a policy issue needing resolution, according to OCSE,
was related to guidance on financial distributions. For instance, OCSE had
to assess how systems would handle the required “$50 pass-through”
policy of the program.4 This policy states that the first $50 of current child
support payments collected for a child also covered under Aid to Families
With Dependent Children (AFDC) must be delivered to the mother of that
child rather than to the state AFDC office. While this policy sounds simple,
it presented a certain degree of administrative complexity, especially for
cases in which support payments were not made on time. In such a case,
regardless of how many months a payment has been in arrears, only $50
(for the current month) goes directly to the mother.

We have indicated in the past that an agency in the process of defining and
analyzing requirements should assess the impact of changes on other
organizational elements;5 therefore, we agree that policy issues such as
these must be addressed prior to developing detailed requirements. We
also agree with OCSE that where possible, it should have made final and
issued certain requirements sooner, using an incremental approach.




4
 The “$50 pass-through” (also referred to as the “$50 disregard”) is the amount collected and
distributed as payment to families and disregarded in consideration of welfare program eligibility. The
$50 pass-through was eliminated effective October 1, 1996, by the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996.
5
 GAO/IMTEC-8.1.4, December 1992.



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    Delays in issuing final systems functional requirements meant more than
    just a late start; they compounded other problems. Uncertainties about
    final requirements slowed some states’ development activities and
    contributed to contractor problems. Seven of the 10 regions we surveyed
    indicated that the delay in requirements had an adverse effect on their
    states’ development. The following excerpts illustrate the impact of the
    delay on certain state projects.

•   An official of one region (representing four states) indicated that the
    requirements were issued much later than needed and ranked the “lack of
    timely final functional requirements” the number one impediment to
    states’ systems development. This official added that all four of its states
    “wanted better clarification in black and white as to . . . what the system
    should look like, how it should operate . . . etc.” The regional official added
    that its states were “left to figure this out for themselves, then they [had]
    to pass a certification review that is totally subjective in the areas of
    functionality and level of automation.”
•   Another regional official said that all five of its states began their projects
    prior to receiving final requirements; however, they were reluctant to
    finalize anything until final requirements were issued. Another HHS
    regional official said, “the delay in getting official regulations published
    impacted contracts with the vendors and was an embarrassment to ACF
    [Administration for Children and Families] [yet, because of the deadline
    imposed], development efforts went forward.”
•   Still another region surveyed indicated that requirements were somewhat
    late and, for four of its six states, this was an impediment. However, a
    regional official alluded to strong contractor relations as one of the
    primary reasons that the delay was not a problem (but otherwise could
    have been) for two of the region’s states. The official stated, “the effect of
    timing on [these two states was] unique. Each was building one system
    that supported a few offices throughout each jurisdiction. Each also had a
    fairly good working relationship with its vendor. Because of the nature of
    the projects, the type of environment and working relationship with the
    vendor, [both states were not as affected by the delay].”

    Likewise, during our visits to individual states, four of them attributed
    their systems development problems to late functional requirements. One
    state official noted that the late functional requirements and short time
    frames contributed to development delays and increased costs. Another
    state noted that the delay in functional requirements contributed to many
    changes in the contract and, eventually, to contract termination. Finally, in
    one state, the child support systems’ development contract had to be



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                          amended to address modifications to the functional requirements. In fact,
                          three work segments in the contract had to be added as a result of these
                          modifications, increasing project costs by at least $210,000 due to
                          reprogramming.

                          The HHS Office of Inspector General has similarly reported that several
                          states experienced systems problems as a result of late functional
                          requirements.6 In response to the Office of Inspector General survey, one
                          state official noted that the state’s system was designed to meet the
                          requirements set out in the draft guidelines; once the final requirements
                          were issued, the state had to shift to a new initiative and virtually start
                          over. Another state official said “. . . the late issuance of the certification
                          guide was a major factor in the decision to delay statewide
                          implementation of the system. The delay in receiving the guide caused [the
                          state] to compress the development cycle of [its] subsystem, putting a
                          higher risk on the success of the overall system.”


                          In addition to being hindered by the delay in functional requirements,
Premature Policy          states encountered delays in developing systems and incurred more costs
Mandate Also Delayed      as a result of OCSE’s policy requiring states to transfer systems. Two years
Development,              after the passage of the 1988 act, OCSE required states to “transfer” existing
                          child support systems from other states or counties rather than building
Increased Costs           entirely new systems. While certainly a reasonable approach for saving
                          money, at the time of this policy mandate, only a few available systems
                          had been certified as meeting OCSE’s old requirements and no systems
                          were certified based on the more extensive 1988 act. As a result, states had
                          difficulty transferring these systems and adapting them for their own
                          programs. OCSE had intended for the transfer policy to be an efficient
                          method of building systems; however, in many cases, the transfer policy
                          actually slowed systems development and led to increased systems costs
                          when states attempted to transfer incompatible, incomplete, or
                          inadequately tested systems.


Policy Mandate Poorly     Before issuing its transfer policy, OCSE did not perform sufficient analyses
Planned and Implemented   to support the requirement that states transfer systems. By not thoroughly
                          evaluating the available alternatives, OCSE had no assurance that states
                          would be able to transfer systems in an effective and efficient manner. As
                          a result, states were faced with choosing from a limited number of

                          6
                           Implementation of State Child Support Certified Data Systems, Department of Health and Human
                          Services, Office of Inspector General (OEI-04-96-00010, April 1996).



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systems, some of which were incomplete or unsuitable for their systems
environments.

OCSE established the transfer policy on October 9, 1990; it said that all
states must transfer a child support system from another state or county.
OCSE noted that states needed to review other states’ systems and
determine how these systems varied from their own systems requirements.
According to OCSE, this sharing of technology among states would
decrease the installation time for automated systems and reduce the risk
of systems failures due to poor system design or inadequate planning.

The transfer policy required states to reuse software. Software reuse can
be an appropriate part of systems development projects. According to the
National Bureau of Standards, one of the most effective means of
improving the productivity of software development is to increase the
proportion of software that is reused. Reusable software not only
increases productivity, but also improves reliability and reduces
development time and cost. However, many technical, organizational, and
cultural issues usually need to be resolved before widespread reuse of
software should be mandated.7 In this case, this was not done.

If properly implemented, OCSE’s transfer policy could have saved states
time and money in developing child support systems. As early as 1987, we
reported that sharing state systems could save OCSE time and money.8
However, we also noted at that time that OCSE had not adopted standards
or provided adequate oversight of states’ efforts to develop compatible and
transferable automated systems. Careful and detailed alternatives analyses
are required prior to selecting software to be transferred. Analyses should
consider functional requirements; standardization of data elements;
compatibility of software and hardware platforms; and other factors, such
as caseload processing, organizational structure, state and contractor
expertise and skills, and any unique state requirements. For alternatives,
state agencies should consider only completed systems that have been
tested, validated, and successfully used in operation to ensure that
benefits will be achieved.

Two factors intensified the need for adequate planning for software reuse:
states’ different organizational structures and methods of administering
the program and the magnitude of changes required by OCSE’s

7
  William Wong, Management Guide to Software Reuse, Department of Commerce, National Bureau of
Standards’ Special Publication 500-155 (April 1988).
8
 Letter to the Administrator, Family Support Administration, HHS, Feb. 20, 1987 (B-221220).



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    implementation of the 1988 act. Since states administer the federal child
    support program, each state determines how its program will be organized
    and operated. These differences in state programs affect systems
    development. For example, county-administered states faced an additional
    challenge in complying with the 1988 requirement to have one statewide
    child support system. Those states had to build systems that considered
    the needs of users in all of their county offices, complicating system
    design. Careful planning for software reuse was especially important.
    Under the 1988 act and implementing regulations, states were required to
    obtain and track more detailed information on each absent parent, child,
    and custodial parent. OCSE mandated that states transfer systems before
    making the requirements final, so they were unable to first evaluate the
    ability of the transfer systems to meet those requirements.

    Despite its lack of requirements, oversight, and alternatives analyses, OCSE
    mandated the transfer policy without performing sufficient analyses or
    feasibility studies of existing certified systems as potential transfer
    candidates. Only eight certified systems were available when the mandate
    was issued, and these were certified based on the 1984 requirements. At
    the same time, no automated systems were certified based on the more
    extensive 1988 act, making it highly unlikely that the available systems
    would be suitable for transfer to other states. While, in July 1994, OCSE
    changed its transfer policy making it optional, this was after most states
    had attempted to transfer systems and when systems efforts had
    progressed further.

    Only one state we visited noted that it had successfully transferred
    another system. It was among the last to transfer a system, initiating the
    transfer in 1994. Moreover, the state began its project after the final federal
    requirements were issued, conducted thorough analyses of three potential
    systems, and transferred a system that had already been certified as
    meeting the 1988 requirements. In addition, the system selected was the
    result of a successful, earlier transfer from another location.

    However, some states we visited did not take as thorough an approach and
    faced difficulties in attempting to transfer existing child support systems.

•   One project team we visited spent almost $400,000 attempting to transfer a
    system from another state, only to discover that the transfer was not
    possible because the system was not compatible with its existing
    operation.




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                            Problems Impeded Earlier Progress as
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                        •   Another state’s official explained that, to meet the mandate and the 1995
                            deadline, his state attempted to transfer a system that was immature,
                            incomplete, and inadequately tested. While the state started to implement
                            parts of the transfer system, the entire system was not delivered until a
                            year later, increasing project costs.
                        •   Yet another state attempted to have a contractor modify a transfer system
                            that was also incomplete. Later, the entire effort was abandoned, wasting
                            over a million dollars and contributing to a delay of several years.

                            The HHS Office of Inspector General recently reported that 71 percent of
                            states said that their attempts to transfer a system delayed, rather than
                            enhanced, development of an automated system. In response to that
                            survey, one state official noted, “. . . when we began our project there were
                            no systems certified to the 1988 level. We chose one state’s system as our
                            transfer model and wasted about a year documenting all of its deficiencies
                            in order to justify not transferring it.” In addition, we were told by officials
                            in several other states that they transferred only concepts from other
                            systems—that the amount of computer code actually transferred was
                            negligible.


                            In our 1992 report, we stated that efforts to develop child support
GAO                         enforcement systems were plagued by problems, particularly in the area of
Recommendations             federal oversight provided to states.9 According to laws and regulations,
Only Partially              OCSE is responsible for continually reviewing and assessing the planning,
                            design, development, and installation of automated systems to determine
Addressed Despite           whether such systems will meet federal requirements. OCSE is required to
Delays and Escalating       monitor 90-percent federally funded child support systems to ensure that
                            they are successfully developed and are cost-effective. If this is not the
Costs                       case and if a state is not substantially adhering to its approved plan, OCSE is
                            authorized to suspend federal funding.

                            Past compliance reviews conducted by OCSE’s systems division identified
                            many deficiencies with states’ development of automated child support
                            systems and escalating costs. For example, development of three severely
                            flawed systems continued at a total cost of over $32 million before they
                            were stopped and redirected by OCSE. Rather than directing needed
                            remedial actions when these problems were identified, OCSE informed the
                            states of the deficiencies yet continued to fund the systems based on
                            states’ assurances that the problems would be addressed. Further, OCSE’s


                            9
                             GAO/IMTEC-92-46, Aug. 13, 1992.



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systems division did not routinely use audit division reports to help
monitor development because it was not required to do so.

In 1992, we recommended that OCSE (1) work with the audit division to
identify and resolve systems-related problems, (2) use its authority to
suspend federal funding when major problems existed, and (3) require
states to implement needed corrective actions when first identified.
Despite the seriousness of the problems we identified in 1992 and
recurring problems since then, the only recommendation fully
implemented by OCSE was the first one, regarding working with the audit
division to identify and resolve systems-related problems. OCSE reviews
audit reports prior to certification visits and the auditors are now
members of the certification review teams. In addition, officials in both the
systems and audit areas stated that communication and coordination
between the two have improved substantially since our 1992 report.

Even though systems costs were escalating, OCSE did not fully implement
the other two recommendations. It continues to assert that the federal
government should work with the states to correct deficiencies rather than
take enforcement actions. However, law and regulations require that OCSE
monitor the 90-percent federally funded child support systems to ensure
that they are successfully developed. OCSE is authorized to suspend federal
funding if a state is not substantially adhering to its approved plan. While
HHS regional staff noted that OCSE either held up, reduced, or stopped
funding to 18 states since the 1988 act, almost 60 percent of these reported
disruptions were due to insufficient information on the required APD or the
state’s exceeding its authorized funding level. OCSE believes that
suspending funds is counterproductive to helping states meet the deadline.

Even when funding was held up for major systems-related problems,
efforts to correct these problems did not appear to be timely. For example,
one HHS regional official suggested to OCSE that it hold up funding for
projects in his region, yet, according to this official, the agency did not
stop any funding until one of those projects’ “initial efforts crashed.” In
another instance, OCSE had serious concerns about the status and future
direction of one state’s project, staffing levels, and methods of
incorporating changes in code. As a result, it held up funding for several
months. However, some problems were not identified until 2 years into the
project’s life cycle; as of the end of our review, OCSE was still working with
the state to resolve them. In another case, OCSE identified problems with
poorly documented code, inadequate planning and guidance, and contract
management but did not stop federal funding.



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According to OCSE’s systems division director and analysts, states have
primary responsibility for developing their systems and therefore the
federal government should not assume a primary role in directing how
states should develop systems and remedy problems. We disagree with
OCSE’s approach of continuing to fund systems with serious problems that
endanger the projects’ success. Such an approach involves the risk of
needing to fix serious problems later in the development process, when it
is much more costly and time-consuming to do so.




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                     Because of the complexity, costs, and large caseloads associated with the
                     child support program, effective development of automated systems
                     requires continuing oversight and strong leadership. Yet despite the
                     pressure that federal and state agencies are under to improve their child
                     support enforcement services, the development of statewide automated
                     systems is hampered by ineffective federal leadership and some
                     inadequate state development approaches. Major mechanisms OCSE uses to
                     oversee states’ systems development projects include reviews of the
                     states’ advance planning documents (APDs); advance planning document
                     updates (APDUs); and certification reviews, which are assessments to
                     determine if projects meet federal requirements. While these reviews
                     provide OCSE information on states’ plans for designing automated
                     systems, the agency does not effectively use the APDs to oversee, monitor,
                     or control the systems development projects, and the certifications are
                     performed too late in the process to detect and correct problems.

                     In short, critical systems development decision points are not monitored
                     by OCSE and reviews of states’ systems are primarily focused on
                     determining whether all federal requirements have been met. Further, OCSE
                     has not completed nationwide analyses or post-implementation reviews to
                     effectively assess lessons learned, hindering its ability to provide more
                     thorough, helpful leadership. OCSE acknowledges these facts, yet cites a
                     management approach that holds states responsible for developing their
                     systems; OCSE believes it lacks the technical expertise and resources
                     needed to be involved at critical points in the development process.


                     While the review of APDs is one of OCSE’s principal vehicles for monitoring
APD Use Inadequate   states’ systems activities, the agency’s review is inadequate for systems
to Redirect States   monitoring because OCSE does not require a disciplined, structured
                     approach for developing or reviewing systems. As such, the APDs are not
                     used to measure systems development progress at key decision points;
                     rather, according to state officials, APDs are used primarily as a funding
                     approval mechanism only, requiring the states to report information and
                     plans on the basis of a deadline that may or may not be realistic.
                     Consequently, systems problems may go undetected until much later in
                     the process when they are considerably more difficult and expensive to
                     correct.

                     APDsare written plans of action submitted by states to request federal
                     funds for designing, developing, and implementing their systems.
                     According to an OCSE guide, the three primary purposes of the APD process



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are to (1) describe in broad terms a state’s plan for managing the design,
development, implementation, and operation of a system that meets
federal, state, and user needs in an efficient, comprehensive, and
cost-effective manner, (2) establish system and program performance
goals in terms of projected costs and benefits, and (3) secure federal
financial participation for the state.1 The document contains the state’s
statement of needs and objectives, requirements analysis, and alternatives
analysis. The APD also sets forth the project management plan with a
cost-benefit analysis, proposed budget, and prospective cost allocations.
To obtain continued federal funding throughout the system’s life, a state
submits an APDU to report the system’s status and to request additional
funding—annually or, if needed, more frequently.

Public Law 100-485 requires that states submit APDs to OCSE and that based
on the APDs, OCSE review, approve, and fund information systems. This
review focuses on ensuring that each state incorporates the minimum
functional requirements by the legislatively mandated date of October 1,
1997. OCSE is also required to review the security requirements, intrastate
and interstate interfaces, staff resources, hardware requirements, and the
feasibility of the proposed plan. HHS regional staff support OCSE by
monitoring states’ development efforts and, at times, assist the states in
preparing their APDs and APDUs. In addition, regional staff provide states
technical assistance and suggestions to help the states comply with
systems requirements.

A well-defined, disciplined structure for systems development, covering
the status of systems at critical design points, is key to preventing
software development problems and encouraging strong, effective
management oversight. For example, phases include systems planning and
analysis, design, development, and implementation. These are major
milestones in any system development project and are to be used to
identify risks, assess progress, and identify corrective actions needed
before proceeding to the next phase. Appendix III provides an overview of
typical systems development phases. The key is to identify system risks
and problems early in the design, in order to avoid major failures and
abandoned projects, and to help ensure that major segments do not have
to be extensively recoded or redesigned.2




1
 State Systems APD Guide, Department of Health and Human Services, Administration for Children
and Families and Health Care Financing Administration (September 1996).
2
 GAO/AIMD-10.1.12, August 1996.



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                         While states recognize the benefits of using a structured systems
                         development approach and may provide OCSE with information on each of
                         these phases in their APDUs, OCSE does not effectively use this information
                         for determining the adequacy or progress of the systems development
                         projects. APDUs are revised annually, rather than corresponding to major
                         system phases. According to OCSE’s director of state child support
                         information systems, the agency has not monitored the projects using a
                         structured approach because it lacks the technical expertise and resources
                         needed to be involved at critical points in the development process.
                         Recent funding from the welfare reform legislation has allowed OCSE to
                         conduct more frequent reviews; it is critical to assess systems
                         development activities at each phase and to identify problems and any
                         potential risks early, before moving forward to the next phase.

                         Further, OCSE has not provided specific guidance describing the
                         information needed in the APDUs to assess different phases of
                         development. For example, while OCSE requires that the states provide
                         schedules of systems development activities, these schedules—formats,
                         descriptions, and structure—vary from state to state and, even within a
                         state, may vary from year to year, making it difficult to effectively assess
                         state progress and monitor systems development. Specifically, some APDUs
                         do not provide information on how much data have been converted, code
                         written, modules produced, nor portions and results of the modules tested,
                         again hindering OCSE’s ability to effectively measure progress.

                         While state officials indicated that the APDUs were useful for budgetary
                         purposes, officials at six out of seven locations we visited said that APDUs
                         are not useful in helping them manage their systems developments. “They
                         are an administrative exercise to justify obtaining funding,” said one.
                         Officials also noted that the deadline seemed to be OCSE’s primary concern;
                         even when the deadline seemed impossible to meet, the states were forced
                         to present inaccurate schedules.


Problems in State        Because of the significant financial investment in information systems and
Development Approaches   their crucial role in helping locate noncustodial parents, a structured
Not Corrected or         systems development approach is essential to reducing major systems
                         risks. In several instances, even when states’ APDUs contained adequate
Redirected               information to identify significant problems in approach, OCSE has not
                         required the states to correct the deficiencies. As a result, more money
                         was spent and systems underwent further development without




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                                                   disciplined, structured systems development approaches, increasing the
                                                   likelihood of system failures.

                                                   In the case of one state we visited, as shown in figure 4.1, despite three
                                                   revisions to time estimates for systems testing, OCSE approved each
                                                   updated estimate. Only after the state officials told OCSE that delays and
                                                   problems were occurring did the agency, in November 1996 and in
                                                   February 1997, review systems progress. State officials told us that they
                                                   wanted the OCSE review to identify that the time for testing was insufficient
                                                   to support the state in vendor discussions, yet the agency had not, as of
                                                   March 31, 1997, reported on this matter. According to OCSE’s director of
                                                   child support information systems, the review focused only on one
                                                   specific functional requirement and was not a comprehensive systems
                                                   review, and would not, therefore, address the software testing issue.



Figure 4.1: State Plans for Software Programming and Unit Testing




    January 1991 APD submitted
    with no schedule for testing


                                            March 1994 initial estimate (6.5 months)


                                                 August 1994 revised estimate (6.5 months)




                                                                            December 1995 revised estimate (20 months)


                                                                                              May 1996 revised estimate (34 months)



  1/91       1/92         1/93     1/94   1/95       1/96        1/97       1/98       1/99        1/2000

 Dates APDUs were submitted


                                                   Source: State’s child support enforcement systems advanced planning document updates.




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In systems development, building and testing sections of computer code
and then using test results to refine the software are critical.3 Testing
results need to be considered in correcting errors and improving identified
inefficiencies. Despite this essential need for systems testing, in the
example in figure 4.1, OCSE continued to approve the APDUs and fund the
project, without assessing the increasing risks. The APDUs also showed that
the state was not following a structured systems development approach
and was developing software while at the same time attempting to
integrate software in preparation for systems testing. According to this
state’s systems project director, the project’s costs increased from
$30 million to over $50 million, in part because of the poor quality of
software developed. If work on a later phase proceeds before an earlier
phase is completed, one risks problems from condensing work and
truncating the process. Completion of the automated system is now
uncertain.

In another state we visited, OCSE had ample indication that the state’s
system was experiencing difficulty, yet failed to act until just recently. In
August 1993, the state initially scheduled implementation to last until April
1996—a period of 39 months. The estimated completion date was
subsequently extended twice—first in September 1995 by an additional 10
months (to February 1997), and then again in October 1996 by an
additional 5 months (to July 1997). These extensions, taken together,
prolonged the implementation phase by almost 40 percent, from an
initially envisioned 39 months to 54 months. The 1995 updated estimate
should have signaled to OCSE that the state’s system needed help. However,
not until the state requested a substantial increase—$133 million in project
costs—did OCSE, in January 1997, question the state’s systems progress.
According to OCSE’s director of child support information systems, the
agency should have visited this state sooner to provide technical
assistance. Given that the October 1996 update judged implementation to
be less than half finished, it is questionable whether the July 1997 target is
even realistic.

OCSE has not effectively provided program oversight by detecting and
redirecting states’ approaches that are inadequate and threaten successful
systems development. When planning and developing a system, a state
must ensure that it meets users’ needs, provides the intended benefits to
users and their constituencies, and is developed on time; otherwise, it will
not be effective.4 Gaining commitment and support from key

3
 GAO/AIMD-10.1.12, August 1996.
4
 GAO/AIMD-10.1.12, August 1996.



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decisionmakers is particularly important for states developing child
support systems because they serve a variety of users—district attorneys,
county and state officials, and court officers. Key users’ needs should be
considered, and general agreement is critical in developing systems’
requirements and design. However, not all states clearly defined their
functional requirements and user needs.

In one state, the system design was insufficient because it did not clearly
define functional requirements and did not gain the support and
involvement of key county officials. While OCSE reviewed requirements and
reported minor deficiencies, it did not mention any serious problems in
the state’s systems development approach. Yet just 1 year later, after the
state had an independent contractor conduct a risk assessment of the
project, state officials acknowledged that the approach needed to be
completely revamped. According to OCSE’s director of child support
information systems, the agency’s review for this state focused only on
whether functional requirements were being met rather than the systems
approach being followed. She further noted that the state is responsible
for developing the system and obtaining system buy-in from the users.
Because of OCSE’s large financial investment in systems—the approval of
$154 million for this state alone—and the importance of gaining user
acceptance for successful systems development, we believe the state and
federal agencies are both responsible.

Two states we visited also encountered similar problems by not involving
all key players—program, systems, and management officials—in the
decision-making process. In one state, the information resources
management official was not involved in the systems planning and
implementation. Later a disagreement occurred in policy decisions related
to operating the system, resulting in an abrupt change in management of
the system. Consequently, the project’s direction is uncertain and the
system conversion progress has been delayed. Another state allowed its
child support program office to develop its system without ensuring that
key officials with technical program and managerial expertise were
adequately involved. Systems problems were identified late in
development, and project management was changed to put more emphasis
on technical project experience. If this technical expertise had been
involved initially, the system might have been more successfully planned
and implemented.




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                        While OCSE does review and certify states’ systems to determine if
Certification Reviews   functional requirements are being met, as described in the 1988 act and the
Narrow in Focus and     agency’s implementing regulations, these reviews are conducted toward
Performed Too Late      the end of a systems development project, at the states’ request, and are
                        not performed at critical decision points (such as analysis, design, coding,
for Effective           and testing). Thus, these reviews are too late to identify problems and
Oversight               redirect approaches. Despite being the predominant stakeholder for over
                        $2.6 billion worth of child support systems, OCSE maintains that its
                        philosophy is to work with the states as opposed to suspending funding
                        until problems are corrected, allowing federally financed projects to
                        proceed when such projects do, in fact, require redirection.

                        Two types of reviews are conducted by OCSE: functional and certification
                        reviews. During a functional review, OCSE helps the state work on specific
                        system requirements. For example, it may telephone or visit the state to
                        discuss how to meet automation requirements for the noncustodial parent
                        locating function. The certification review comprises a two-level process,
                        level 1 and level 2. A level 1 review is performed when an automated
                        system is installed and operational in one or more pilot locations. (OCSE
                        created this level of review in 1990 due to state requests for agency
                        guidance prior to statewide implementation.) A level 2 review is
                        conducted when OCSE visits the state to determine if the system meets
                        certification requirements. The certification review normally takes a week
                        to perform; the OCSE review team is made up of headquarters systems
                        officials and HHS regional personnel representing the systems, fiscal,
                        program, and audit functions.

                        Prior to a certification review, OCSE provides a questionnaire including
                        questions on how the system meets specific federally required functions
                        (such as case initiation and the detail supporting this function) and a test
                        deck of financial transactions (mainly test cases of different types of child
                        support payment distributions) to be run on the state’s system. OCSE also
                        supports, through federal funds, child support user group meetings so
                        state officials can meet and share related systems experiences.

                        OCSE’s reviews—functional and certification—of state systems focus on
                        whether functional requirements are met, while they lack but need
                        comprehensive assessments of the systems’ development approaches and
                        schedules. Since 1991, OCSE has visited, assessed, and reported on 31
                        states’ system development projects.5 We reviewed all of these and found

                        5
                         Since 1991, OCSE has visited and reviewed 34 state systems projects; however, the agency had only
                        issued reports on 31 of these reviews as of March 31, 1997.



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that 28 of the 31 functional and certification reviews focused primarily on
systems’ functional requirements. Specifically, OCSE determines whether
the system can initiate a new case, locate an absent parent, establish a
support order, manage cases, enforce cases, perform financial
distributions, perform management reporting, and maintain
security/privacy. Suggestions for improving the efficiency and
effectiveness of the systems’ operations are discussed in reports following
these reviews. For example, recommendations include having the states
consider automating more functions, such as developing an automatic
tickler file to remind caseworkers of required actions or an approaching
time frame. While suggestions for improved efficiency in automation are
valuable, OCSE’s reviews lack a comprehensive assessment of the states’
systems development approach, including the overall design, project
management, user involvement, and delays in major milestones and
critical tasks. While 3 of the 31 reviews did address systems development
approaches and overall project management, OCSE officials noted that they
only do this type of review for states that are experiencing delays and
significant problems.

Even though OCSE required states to submit APDs by October 1, 1991, all but
1 of the 31 functional and certification reviews conducted by OCSE were
performed in October 1995 or later. Since OCSE only does certification
reviews upon state request and toward the end of systems development,
much of the federal funding had already been spent.

Even when OCSE identifies state systems problems and notifies the states,
corrective actions do not always follow. In one state, OCSE performed two
reviews and noted that the state had serious managerial problems. There
was no project manager for extended periods of time, and users did not
support the project, despite the fact that a key early step in designing a
proposed system is identifying and satisfying users’ needs.6 Even after the
second review was performed and the problems noted in the first review
had not been corrected, OCSE took no action to stop or delay the project or
to suspend funding. Again, according to OCSE systems analysts, the
agency’s main focus is to help states fix problems as they arise; agency
officials believe that withholding funds is counterproductive to meeting
deadlines. As a result, the federal government has approved over
$50 million for this one system; it has been in partial operation—primarily
in the smaller counties—since mid-1993, and its expected completion is
still not known.


6
 GAO/AIMD-10.1.12, August 1996.



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In another example, OCSE approved a state’s proposal to meet functional
requirements by developing a distributed system estimated to cost nearly
$178 million to complete and maintain through 2000. This system involves
developmental costs for at least 23 county databases, plus additional costs
to maintain separate systems. While OCSE questioned the state about the
additional costs of personnel, the agency’s certification process does not
require that a state receive an approval before moving from one phase of
development to the next. By not visiting the project to review critical
design documents, the agency was not able to effectively assess the
distributed processing strategy and associated costs or to suggest an
alternative approach. This state now estimates that the system will cost
about $311 million to complete and maintain through 2000. Further,
according to state officials, the system will not meet the October 1997
deadline.

Systems managers from three states we visited indicated their desire that
OCSE play a more active role. Systems that are being developed are very
sophisticated, and the officials said that it was important for OCSE to assess
the management and direction of the project early to avoid or minimize
problems later. One state official said that OCSE should see itself as a
stakeholder in the development of these systems and not just a reviewer to
see if certain requirements were followed. Another official noted that OCSE
is scrupulously hands-off with all, especially with the private sector.
Another state official told us that because the contractor’s work was so
poor and late in delivery, the state had to support the project with more of
its own staff, contributing to an increased cost of $20 million. When the
state asked for assistance from OCSE on how to handle the contractor, they
were told that “it was a state contract and it had to be resolved at that
level.”

Further, while a recent HHS Office of Inspector General survey noted that
70 percent of the states felt that OCSE’s guidance was good to
excellent—including the certification guide, clarification of requirements,
and questions and answers on functional requirements—43 percent said
they needed additional technical assistance. One state official said “there
has been very little monitoring to date. The delays will come when we
request certification and OCSE doesn’t like what it sees.” Another state
official noted, “It would have been helpful to have had more compliance
reviews and technical reviews of designs, but it was probably not practical
given OCSE’s [limited] staffing resources.” Finally, another state official
noted “I’ve only known OCSE to be the gatekeeper with regard to funding




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                       and ultimate certification. I don’t have any experience to see them in
                       another role.”


                       The narrowness of OCSE’s reviews limits its ability to gain a nationwide
Lack of Nationwide     perspective on the status of states’ systems development; this, in turn,
Perspective Inhibits   hinders effective leadership in earlier stages. OCSE has completed neither a
Effective Leadership   comprehensive, nationwide analysis nor post-implementation reviews to
                       determine whether state systems are sound financial investments. Such
                       analyses are essential to assessing the ongoing progress of child support
                       systems and evaluating the impact of automated systems on program goals
                       and objectives—including any lessons learned.7 While the Administration
                       for Children and Families (ACF) developed an automated system to help
                       the agency perform individual state and nationwide analyses, we found the
                       system was not being fully used, was not user friendly, and contained
                       errors in about half of the states’ data.

                       Because OCSE has not conducted a nationwide assessment, it has not
                       analyzed the hardware, software, database structures, and networks
                       supporting state child support systems; as a result, state officials have had
                       to discuss these issues through informal means. If OCSE had performed a
                       nationwide analysis, it would have a sound basis for encouraging states to
                       share innovative database designs, software, and other technologies for
                       greater efficiencies and cost savings. Further, analyses of systems costs,
                       benefits, and schedules from a nationwide perspective would help identify
                       where improvements are needed in a timely manner. Aggregate data on
                       projects help identify recurring problems, successes, and other trends for
                       decision-making purposes.8

                       To collect states’ data more effectively, assess systems costs, and monitor
                       projects nationwide, ACF created the State System Approval Information
                       System (SSAIS). This was designed to establish a more accurate way of
                       tracking state systems projects. SSAIS tracks the historical data on
                       automated systems projects—including the child support program—on a
                       state-by-state basis. Users may access the following data on any state
                       project: (1) funding requests, reviews, and approvals, (2) names of
                       contractors, (3) completed systems reviews, and (4) notes from systems
                       reviews.


                       7
                       Assessing Risks and Returns: A Guide for Evaluating Federal Agencies’ IT Investments
                       Decision-making (GAO/AIMD-10.1.13, February 1997).
                       8
                        GAO/AIMD-10.1.13, February 1997.



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While we commend ACF’s actions to develop this system, we found that
SSAIS recorded incorrect funding levels for nearly half of the projects.
During our comparison of OCSE’s approval letters and the data in SSAIS, we
found errors, such as duplicate entries and entries for systems projects no
longer underway, and inconsistencies, such as entries for some states that
included planning costs while entries for other states did not. Specifically,
SSAIS showed that the states were authorized to spend nearly $1.9 billion
on automated child support systems projects, while hard copy approval
letters maintained by OCSE indicated that the states were authorized to
spend about $100 million less.

OCSE’s director of state child support information systems acknowledged
that SSAIS is not yet comprehensive, complete, or user friendly. She said
that for these reasons, OCSE was not fully using or relying on the SSAIS
entries at the time of our review. However, she acknowledged that our
review led the division to assign a higher priority to correcting
discrepancies in SSAIS and to establishing a consistent policy regarding
entries for planning costs.

In addition to tracking systems development nationwide,
post-implementation reviews are the basic means of ensuring that systems
meet program objectives and identify techniques for improving work
processes, data integrity, and project management—thereby avoiding
costly systems mistakes.9 This information is also helpful in identifying the
benefits of information technology projects and prioritizing technology
investments that best meet mission needs. To date, OCSE has not
completed post-implementation reviews on any of the 12 certified or
conditionally certified child support systems.

OCSE’s information systems director called post-implementation reviews
important. However, she said that until recently, resource constraints
limited OCSE’s ability to complete such reviews. Instead, OCSE focused its
resources on assessing the states’ progress in meeting system certification
requirements. Under welfare reform, 1 percent of the federal share of child
support payments collected annually will be provided for state child
support programs and systems oversight.10 According to OCSE’s
information systems director, this will allow OCSE to conduct
post-implementation reviews.


9
 GAO/AIMD-10.1.13, February 1997.
10
 For 1996, the federal share of child support payments collected amounted to $1.2 billion. One percent
of this—$12 million—is provided for program and systems oversight.



Page 46                                             GAO/AIMD-97-72 Child Support Enforcement
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Welfare Reform Places New Demands on
Child Support Systems

                     Recently enacted welfare reform legislation substantially increases the
                     importance of collecting child support payments from noncustodial
                     parents, since for welfare recipients who lose eligibility, child support may
                     be their only remaining source of income. As such, it will be even more
                     important that state automated systems operate correctly and efficiently in
                     helping eligible child support recipients collect funds due them. The law
                     also places specific new requirements on states relating to the functioning
                     of their systems. Recognizing the importance of these developments, OCSE
                     plans to change its approach and issue functional requirements
                     incrementally, and has taken steps to work with the states; however, the
                     impact of welfare reform and associated costs is not yet known. Another
                     demand on systems development will be monitoring and ensuring that
                     new statewide child support enforcement systems, as well as existing
                     systems that interface with the new systems, will process date-sensitive
                     information correctly in the year 2000 and beyond.


                     In August 1996, the Congress enacted the Personal Responsibility and
Welfare Reform       Work Opportunity Reconciliation Act, fundamentally changing the nation’s
Features Automated   welfare system into one that requires work in exchange for a 5-year
Systems              program of assistance; implementing many of its most critical features
                     involves automated systems. The law contains work requirements, a
                     performance bonus that rewards states for moving welfare recipients into
                     jobs, and comprehensive child support enforcement measures. It also
                     provides support for families moving from welfare to work—including
                     increased funding for child care and guaranteed medical coverage.
                     Provisions are also included to improve automation in order to increase
                     paternity establishment, obtain more information on work and residence
                     locations of noncustodial parents, and process child support orders and
                     collections.

                     Both the states and ACF will be required to address these provisions by
                     developing new databases or enhancing existing automated child support
                     systems before October 1, 2000. A $400 million cap has been placed on
                     enhanced federal matching funds1 through 2001 for development costs of
                     automated systems, and funds are to be allocated to the states on the basis
                     of existing workloads and level of needed automation.

                     Welfare reform further underscores the need for streamlined business
                     processes and automated systems for the child support program. Since

                     1
                      The legislation lowered the federal reimbursement rate for enhanced funding from 90 percent to
                     80 percent. The cap applies only to this enhanced funding, not to regular funds, which continue to be
                     reimbursed at a rate of 66 percent.



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    Welfare Reform Places New Demands on
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    welfare reform establishes time limits and eligibility restrictions on
    individuals in the Temporary Assistance for Needy Families block grant,
    states are being faced with the need to increase child support collections.
    According to experts, this likely will force some states to manage child
    support cases differently and require modifications to existing laws
    governing child support operations.2 States will be required to automate
    many child support operations to more efficiently disclose, exchange, and
    compare information on noncustodial parents owing delinquent support
    payments. Some of the more significant state welfare reform systems
    requirements include

•   establishing, by October 1, 1997, or following the close of the next regular
    legislative session, a statewide system for tracking paternity orders and
    acknowledgements of paternity;
•   developing, by October 1, 1997, a new-hire registry on which employers
    will report information on employees recently hired, with the capability of
    reporting the information to a national database and issuing wage
    withholding notices to employers within 2 business days, and making data
    comparisons with the case registry database by May 1, 1998;
•   developing, by October 1, 1998, a central case registry for all child support
    cases and support orders established or modified in the state after that
    date and, as of that date, capable of making data comparisons; and
•   establishing, by October 1, 1998 (or by October 1, 1999, if court
    administered), a centralized unit to collect and disburse child support
    payments, and by October 1, 2000, a statewide child support system that
    meets all requirements.3

    To comply with these mandates, many states will not only have to reassess
    the way child support cases are managed administratively but
    electronically as well. This may include developing new databases and
    electronic links to other public and private organizations, including
    financial institutions; credit bureaus; the Internal Revenue Service; and
    state agencies—including judicial, corrections, licensing, business
    ownership, motor vehicle, labor, vital statistics, and Medicaid. For
    example, the requirement to develop a registry of paternities will likely
    result in the development of a new database that interfaces with
    departments or bureaus responsible for tracking statewide births.
    However, tracking these data electronically may be a challenge since some


    2
     Vickie Turetsky, Child Support Administrative Processes: A Summary of Requirements in the Personal
    Responsibility and Work Opportunity Reconciliation Act of 1996, Center for Law and Social Policy
    (January 1997).
    3
     Vickie Turetsky, Child Support Administrative Processes.



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                  Welfare Reform Places New Demands on
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                  states have not automated the departments or bureaus responsible for
                  birth certificates.4

                  The states will also have to develop automated interfaces with the national
                  Federal Parent Locator Service and the yet-to-be-developed federal case
                  registry and new-hire registry databases. The Federal Parent Locator
                  Service is an electronic system that cross-matches data to help locate
                  noncustodial parents across state lines through links with other state
                  systems and existing national databases, such as those of the Internal
                  Revenue Service, Social Security Administration, and Department of
                  Labor.

                  Both the new-hire registry and the federal case registry will also need to be
                  designed to receive and compare state data on child support cases and
                  noncustodial parents. The states, in turn, will be required to develop
                  similar databases that electronically interface with these national systems.
                  The federal new-hire and case registry systems must be completed by
                  October 1, 1997, and October 1, 1998, respectively.5 OCSE has contracted
                  with several vendors to develop the software for these databases and to
                  provide states with technical assistance.

                  Many states will have to adapt their existing systems and change laws
                  governing child support operations to implement many of these systems
                  requirements. For example, three states we visited indicated that existing
                  laws governing the child support program and new-hire reporting
                  requirements for employers would have to be amended or rescinded
                  before mandated systems requirements could be implemented. Other
                  states will have to make welfare reform system changes while finishing
                  work on child support systems mandated by the 1988 act.


                  While OCSE has initiated some steps to identify welfare reform systems
OCSE Plans to     issues and plans to change its approach in issuing functional requirements,
Address Welfare   the agency does not yet know the impact the legislation will have on state
Reform            systems. As of March 31, 1997, OCSE had not developed functional
                  requirements for implementing welfare reform or fully analyzed the impact
                  of these provisions on existing state child support systems. Guidance for
                  developing the new-hire registries had not been completed, even though


                  4
                   Vickie Turetsky, Child Support Administrative Processes.
                  5
                   Welfare Reform Act—Telephone Seminar: Personal Responsibility and Work Opportunity
                  Reconciliation Act of 1996, American Bar Association family law section and KRM Information
                  Services, Inc. (Oct. 2, 1996).



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                        these registries are due to be in operation by October 1, 1997. However,
                        OCSE does plan to apply lessons learned from technology projects
                        mandated as part of the 1988 Family Support Act and release technical
                        guidance for systems changes required by welfare reform incrementally.
                        The early release of technical guidance should help states decide on
                        systems requirements as soon as possible, minimizing project delays.

                        With the increased funding being made available through welfare reform,
                        OCSE plans to conduct more on-site reviews of child support systems
                        projects to help identify and prevent costly systems development
                        problems during earlier stages of the projects. The agency has also
                        supported ACF user groups and established electronic information bulletin
                        boards to identify and share information on systems issues. Further, OCSE
                        is participating in welfare reform work groups with the states to discuss
                        policy and systems-related issues. In January 1997, the agency also created
                        a federal, state, and local government initiative to work with the eight
                        largest states—representing almost 50 percent of the child support cases.
                        This initiative focuses on improving program performance, which may
                        include automated systems issues. In addition, the agency recently queried
                        the states to identify technical support needs and planned to issue, in
                        May 1997, a national plan to better address OCSE technical assistance to the
                        states’ systems activities. Despite these early attempts to work with the
                        states, according to OCSE’s information systems director, the agency does
                        not know the impact the welfare reform will have on the states’ child
                        support systems. She noted that until the requirements are defined, the
                        extent of systems changes and their costs are not known.


                        The change in century could have a significant impact on state systems
Millennium Changes      that process date-dependent information related to child support.
Are Also Important to   Ensuring that all state child support enforcement systems adequately
Automation              address the processing of information that is date-dependent is critical.
                        Correcting noncompliant year-2000 software may be expensive. Among
                        these systems are those that must interface directly and provide
                        information to the newly-developed child support enforcement systems.
                        Many older state systems that will still be in operation in 2000 were
                        programmed using 2 digits to represent the year—such as “97” for 1997.
                        However, in such a format 2000 is indistinguishable from 1900.

                        OCSE has stated that it has informed the states that both the new child
                        support systems and their applications software under development, as
                        well as the existing systems that must still interface with the new



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statewide systems and their applications software, must be year-2000
compliant.




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Conclusions, Recommendations, and
Agency Comments

              Thanks to technology, many states are better able to locate noncustodial
              parents who owe child support payments, seize government tax refunds or
              benefits, and issue child support payments to families more efficiently. But
              this progress has been expensive. The cost of developing state child
              support enforcement systems has risen over the past 15 years to the point
              that it now exceeds $2.6 billion, of which $2 billion is federal funds. The
              amount remaining to be spent to bring all states into full legal compliance
              is unknown. At the time of our review, most states did not yet have fully
              functional child support enforcement systems. Aside from new
              requirements resulting from welfare legislation, only 12 states had
              federally certified child support enforcement systems; as many as 14
              states—responsible for about 44 percent of the national caseload—may
              well miss the October 1, 1997, deadline for completing their automated
              systems.

              The causes are widespread. States have underestimated the magnitude,
              complexity, and costs of their projects and operations, and they could
              have received better guidance and assistance from the federal government,
              specifically OCSE. The lack of progress in the development of state child
              support systems also can be partly attributed to the agency’s limited
              leadership and oversight and some states’ inadequate systems approaches.
              OCSE’s release of final functional requirements for the state systems was
              late, which encouraged some states to automate many tasks without
              adequate requirements management or control. Though ready, some states
              hesitated to make their systems’ requirements final; it must be
              remembered that deadlines loomed, with or without final requirements.
              Another factor was OCSE’s mandated transfer policy, which was premature
              and poorly implemented. This alone caused long-term problems, increased
              costs, and delays.

              Against this backdrop, which included the failure to fully implement
              recommendations we made some 5 years ago, OCSE allowed state systems
              with serious problems to proceed, thus escalating spending with no
              assurance that effective, efficient systems would result—and many
              indicators to the contrary. Specifically, OCSE did not establish levels of
              oversight and technical review commensurate with the size and
              complexity of this nationwide undertaking. It did not require states to
              follow a structured systems development approach; nor did OCSE assess
              progress at critical decision points, thereby missing opportunities to
              intervene and successfully redirect systems development.




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                  OCSE relied on required annual planning documents, which were optimistic
                  projections and for many states did not relate to the critical phases of
                  system development. Certifications were narrowly focused and conducted
                  only at a state’s request, when the state was ready. While OCSE has
                  supported state-to-state interaction with users’ groups, the agency itself
                  cannot develop a truly nationwide perspective without an understanding
                  of the trends that typify development of individual state systems. Lacking
                  this knowledge, OCSE cannot disseminate valuable information to states in
                  earlier stages of development.

                  During the last 5 years, when much of the money has been spent and when
                  it was most critical for OCSE to take a leadership role and evaluate states’
                  efforts, agency and HHS regional officials noted that their oversight was
                  hindered by limited technical expertise and resources. Critical areas of
                  systems expertise—systems development, systems engineering, and
                  program management—are essential to assess how effectively systems are
                  being implemented.

                  Because of the magnitude of the caseload, the funds being provided, and
                  the importance of the program’s mission, it is essential that both federal
                  and state officials take responsibility for developing effective and efficient
                  automated child support systems. While evaluating states’ efforts is one
                  major component of OCSE’s role, it is important that the agency considers
                  itself a stakeholder in these efforts. The problem appears to stem from
                  OCSE’s view of its role—one of merely monitoring requirements and
                  approving funds rather than being held accountable for effective systems
                  development approaches.

                  With the enactment of welfare reform, OCSE’s role becomes much more
                  important: for those who may no longer be eligible for welfare benefits
                  and rely solely on child support, the effectiveness of their state’s system
                  will be critical. Effective, strong federal leadership will be necessary if we
                  are determined to support those who rely on these automated systems.


                  We are making several recommendations to increase the likelihood of
Recommendations   developing state automated child support systems that will perform as
                  required. To maximize the federal government’s return on costly
                  technology investments, we recommend that the Secretary of Health and
                  Human Services direct and ensure that the Assistant Secretary of the
                  Administration for Children and Families take the following actions.




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•   Develop and implement a structured approach to reviewing automation
    projects to ensure that significant systems development milestones are
    identified and that the costs of project decisions are justified during the
    entire effort. We recommend each major systems phase be reviewed and,
    at critical points—analysis, design, coding, testing, conversion, and
    acceptance—that OCSE, according to preestablished criteria, formally
    report to the state whether it considers the state ready to proceed to the
    next milestone or phase.
•   Develop a mechanism for verifying that states follow generally accepted
    systems development practices to minimize project risks and costly errors.
    OCSE should revise the guidance for the APDs and APDUs to ensure that these
    documents provide the information needed to assess different phases of
    development and are consistent from year to year. This information should
    include clearly defined requirements; schedules reflecting the amount of
    data converted, code written, modules produced, and the results of
    testing; and other measures to quantify progress.
•   Use an evaluative approach for planned and ongoing state information
    technology projects that focuses on expected and actual cost, benefits,
    and risks. OCSE should require states to implement needed corrective
    actions for federally funded systems when problems and major
    discrepancies in cost and benefits are first identified. If a state experiences
    delays and problems and is not following generally accepted systems
    development practices, OCSE should suspend funding until the state
    redirects its approach.
•   Evaluate current staff systems knowledge, skills, and abilities and identify
    what additional technical expertise is needed. Develop the technical skills
    needed to allow OCSE to become more actively involved with the states at
    critical points in their development processes, and enhance the skills of
    existing systems reviewers through additional training. This expertise
    should include program management, software development, and systems
    engineering.
•   Conduct timely post-implementation reviews on certified child support
    systems to determine whether they are providing expected benefits,
    identify any lessons learned, and assess innovative technical solutions.
•   At least annually assess the progress of child support systems projects
    nationwide to gain and share with the states a broader perspective on
    costs, systemic problems, potential solutions, and innovative approaches.
    Information should be shared with other states to help reduce costs and
    improve effectiveness of the child support program nationally—especially
    any practices or systems that could benefit states attempting to develop or
    implement welfare reform systems requirements.




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                     •   Assess the impact of welfare reform on existing child support
                         programs—including automated systems and business operations—and
                         determine whether states will be able to implement systems requirements
                         within established time frames and without exceeding the $400 million
                         cap. This assessment should also include an estimate of additional regular
                         rate funding for automated systems that states may need to comply with
                         the requirements of welfare reform.
                     •   Provide the states with technical requirements for implementing welfare
                         reform systems, including the new-hire, central case, centralized
                         collection, and disbursement registries in enough time to allow the states
                         to meet the legislatively mandated deadlines of October 1997, 1998, and
                         ultimately 2000.


                         HHS  disagreed with our recommendations on agency monitoring and
Agency Comments          oversight and suspending federal funding for flawed state systems, while
and Our Evaluation       generally agreeing with our other recommendations. HHS officials’ primary
                         concern with the report was the degree of federal stewardship appropriate
                         in the effective development of automated state child support enforcement
                         systems. The Department notes that we have a different perception of the
                         appropriate federal role in state automated systems development than is
                         authorized. The Department indicated that reviewing state systems at
                         critical phases would increase the administrative burden on the states, and
                         result in OCSE’s “micromanagement” of state projects. Further, officials
                         reiterated their belief that withholding funds was counterproductive to
                         developing automated systems. Finally, HHS expressed concern about our
                         presentation of the level of state automation and systems costs. The
                         Department did, however, generally agree with our recommendations
                         regarding assessing OCSE’s technical resources, conducting
                         post-implementation and nationwide systems reviews, and defining—in a
                         timely manner—welfare reform requirements.

                         We have reviewed HHS’ comments, and found no reason to change our
                         conclusions and recommendations. HHS views OCSE’s role narrowly, as one
                         of monitoring requirements and approving funds. The agency believes its
                         role is to assist states in meeting mandated deadlines, rather than more
                         actively monitoring and overseeing state systems development activities
                         with an eye towards helpful intervention. We disagree with HHS’ approach.
                         Instead of placing the responsibility solely with the states, OCSE is also
                         accountable for effective state systems development. According to
                         statutory requirements, the agency should review, assess, and inspect
                         systems throughout development. Given the significance of state child



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                     support enforcement systems to the operation of the program and the
                     magnitude of expenditures, it is critical that these systems be developed
                     correctly and efficiently from the beginning. A philosophy of providing
                     funds, despite serious systems problems and costly mistakes, misses the
                     opportunity to reduce the risk of systems failure and save taxpayer dollars.
                     OCSE does not evaluate or assess states’ systems development projects
                     using a disciplined, structured approach. The agency’s reviews are
                     narrowly focused and, as a result, not effective or timely in assessing the
                     states’ systems approaches and progress. A summary of the Department’s
                     comments and our evaluation is provided below. HHS’ comments are
                     reprinted in appendix IV of this report.


HHS’ Role Narrowly   We do not agree with HHS’ position that OCSE’s role be primarily focused on
Focused              providing technical assistance and guidance. HHS’ statutory
                     responsibilities, as set forth in the Social Security Act, delineate a
                     leadership role in developing child support enforcement systems. Section
                     452(a) of this act provides that a “designee of the Secretary” (Office of
                     Child Support Enforcement) shall, . . . “review and approve state plans” for
                     child support enforcement programs, “establish standards” for state
                     programs, “review and approve state plans,” and “evaluate the
                     implementation of state programs.” With regard to child support
                     management information systems, Section 452(d) provides that OCSE shall,
                     “on a continuing basis, review, assess, and inspect the planning, design,
                     and operation of management information systems . . . with a view to
                     determining whether, and to what extent, such systems meet and continue
                     to meet requirements imposed [under the act].”

                     The agency’s advance planning document (APD) guide,1 also refers to its
                     leadership role in approving, monitoring, and certifying state systems
                     programs to ensure that federal expenditures are made wisely. In HHS’
                     response to our report, it noted elsewhere that the agency “has the
                     authority, which it frequently exercises, to require states to send an
                     as-needed APD at critical milestones in its life cycle methodology.” And in
                     response to comments from states concerning the extent of OCSE’s
                     reviews, HHS said that it intends to continue monitoring state systems
                     projects, noting that it has “responsibilities for assuring that the
                     expenditure of federal funds on state systems is necessary for the effective
                     and efficient operation of the programs.”2 This is consistent with recent

                     1
                     State Systems APD Guide, Administration for Children and Families and Health Care Finance
                     Administration, Department of Health and Human Services (September 1996).
                     2
                      The Federal Register, vol. 61, no. 148 (July 31, 1996).



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legislation that requires more effective oversight of systems development
activities. The Clinger-Cohen Act of 19963 and recent Office of
Management and Budget guidance for managing information technology
investments4 specify the need for greater accountability for systems during
the critical development and implementation phases.

The federal government is a major stakeholder in these systems, paying
about $2 billion dollars over the last 15 years. As such, it is critical that
OCSE’s current approach to monitoring and overseeing state systems be
improved to ensure that the federal government’s investment in systems is
spent wisely. Our recommendations reflect systems development practices
that are widely used in both the private and public sectors. Monitoring at
critical points in the development process allows earlier intervention and
greater opportunity to correct problems before they become more costly.
We disagree that this approach constitutes micromanagement; we believe
that to do less constitutes lax management. These activities also need not
create an administrative burden. OCSE does not have to impose additional
reporting requirements on the states; it must simply streamline its existing
reporting process to ensure the inclusion of key pieces of information at
critical phases. It is imperative that HHS take advantage of its legislatively
authorized oversight and monitoring role. In the absence of such action,
HHS is likely to continue to provide little added value to states; instead, it
will remain merely a bureaucratic hurdle for states to climb to fund
critically important systems.

HHS asserts that OCSE should provide technical assistance to the states,
rather than suspend federal funding—especially given the statutory
deadline. We disagree. Federal regulations provide for the suspension of
federal funding when states’ systems under development cease to
substantially comply with requirements and other provisions of the APD.5
Further, irrespective of the deadline, allowing systems to be developed
ineffectively and inefficiently at the expense of the taxpayers is not
supporting the goals and underlying intent of the legislation. Allowing a
state to go forward before correcting inadequacies in approach
contributes to rising systems’ costs.

In this report and in our 1992 report, we pointed out that OCSE continues to
fund systems with serious problems—problems that threaten their very

3
 This act requires, among other things, that agencies manage risks associated with information
technology projects from initiation to completion.
4
 Evaluating Information Technology Investments, OMB Office of Information and Regulatory Affairs,
Information Policy and Technology Branch, November 1995.
5
 45 CFR 307.40.


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                         success.6 As discussed in this report, such an approach invites the need to
                         correct serious problems later in the development process, when it is more
                         costly and time-consuming to do so.

                         OCSE has periodically suspended state funding for automation projects. As
                         we reported, however, almost 60 percent of these disruptions were due to
                         insufficient information on the required APD, or for states’ exceeding their
                         authorized funding levels—not for more substantive issues on the
                         soundness of the development approach itself. Even when funding was
                         held up for major systems-related problems, efforts to correct these
                         problems did not appear to be made in a timely fashion. Further, in cases
                         in which an HHS regional official suggested that OCSE hold up funding for a
                         project, the agency did not stop funding until the project “crashed.”


Weaknesses in OCSE’s     HHS  agreed that the states are encountering automation problems and that
Current Process          states need a greater degree of oversight. The Department stated that OCSE
                         follows a structured approach in reviewing states APD submissions. We
                         believe this approach is not sufficient oversight. While we described the
                         agency’s review process—APD and certification reviews, we believe that
                         the APD process should ensure that systems development activities at
                         critical decision points are evaluated. OCSE does not consistently monitor
                         state systems development at critical milestone points, such as the
                         completion of design or requirements development. We noted that OCSE’s
                         certification reviews are usually conducted toward the end of the
                         development process, and as such are often too late to help identify
                         problems and redirect the approach.


Structured Methodology   Another issue raised by HHS was that with a variety of concurrent systems
Supports Systems         development activities, including the staggering welfare reform deadlines,
Variability              it may be difficult to use our suggested “one structured methodology fits
                         all.” We are certainly not advocating that OCSE require or impose a “one
                         structured methodology fits all” approach. A structured approach to
                         reviewing systems development—irrespective of the particular
                         methodology used—would also allow for systems variability, including the
                         differences in project size, scope, and complexity. The key to a structured
                         approach is the identification of critical milestones that are the basis for
                         systems reviews. States value this process; one state official noted that its
                         project would be unmanageable without it. Other state officials told us
                         that OCSE should play a more active role, and that they considered it

                         6
                          GAO/IMTEC-92-46, Aug. 13, 1992.



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                        important that the agency assess the management and direction of the
                        project early to avoid or minimize later problems.


Post-Implementation     HHS concurred with our recommendation to conduct post-implementation
Reviews Planned         reviews on certified child support systems. The agency has plans in fiscal
                        year 1998 to conduct both technical assistance visits and
                        post-implementation reviews to further identify lessons learned and assess
                        innovative technical solutions.


Nationwide Assessment   HHS  agreed on the importance of a nationwide assessment of child support
Initiated               systems projects and has taken steps in that direction. The Department
                        noted that it has developed the State System Approval Information System
                        (SSAIS) and uses electronic means for information sharing. However, it is
                        critical that OCSE continue to maintain and use accurate information from
                        the SSAIS and develop a sound nationwide basis for encouraging states to
                        share innovative database designs, software, and other technologies for
                        greater efficiencies and costs savings, and for identifying recurring
                        problems. With a systematic and comparison-based assessment, OCSE
                        could recognize trends and identify best practices that could be shared.
                        Identifying and taking action on such issues would be a significant benefit
                        of increased oversight.


Magnitude of Welfare    HHS agreed on the importance of providing states with technical
Reform                  requirements associated with recent welfare reform legislation. As HHS
                        noted, states’ systems funding was not limited to the $400 million
                        enhanced funding.7 We recognize that the welfare reform requirements are
                        substantial, and that the legislation will allow states to be reimbursed at
                        the regular and enhanced rate. The monetary magnitude of
                        accommodating welfare reform systems requirements further underscores
                        the importance of effective federal oversight, including comprehensive
                        assessments of systems implications and timely issuance of systems
                        requirements.




                        7
                         For the enhanced funding, welfare legislation provides 80-percent reimbursement from the federal
                        government.



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Noncertified Systems         HHS  believes our report incorrectly noted that noncertified states have “no
Show Partial Benefits; Yet   automation” to enforce child support collections. We acknowledge that
Systems Costs Are            state systems that are not yet certified may have some automation. In fact,
                             we noted that state officials indicated that partially automated systems
Significant                  have improved their capability to locate noncustodial parents, increased
                             paternity establishment and collections, and provided greater staff
                             efficiency. We also noted, however, that OCSE officials said that as many as
                             14 states may not meet the deadline for certification, leaving about
                             44 percent of the national caseload without the full benefits of automation.

                             As envisioned by the Congress in implementing this legislation, some
                             states have attained benefits; however, child support enforcement systems
                             costs continue to increase, and the extent of final costs is not yet known.
                             We acknowledge that systems’ costs include developing new systems and
                             maintaining and enhancing systems that were certified prior to 1988. OCSE,
                             however, does not track these costs separately. Some states did not design
                             new systems; rather, they built upon existing ones. In these cases, the
                             costs attributable to the 1988 act would be less than those of states that
                             developed entirely new systems. However, states that updated their
                             existing systems may now, as the October 1, 1997, deadline draws near,
                             need to significantly redesign their systems to fully meet child support
                             certification requirements and support welfare reform legislation.

                             HHS indicated that the costs of automation should be carefully placed in
                             perspective and also compared automation costs to the agency’s
                             administrative costs. We recognize that systems costs may be a small
                             percentage of the total administrative costs; however, we do not believe
                             that $2.6 billion is inconsequential. We recognize and cite examples where
                             OCSE’s weak oversight contributed to the rising costs that could have been
                             avoided if more of a proactive leadership role was demonstrated by the
                             agency. These systems will play a critical role in effectively administering
                             the child support and welfare programs in the future. As such, it is
                             incumbent upon the Department and OCSE to ensure that the dollars
                             invested in these systems are spent wisely, and provide an effective return
                             on investment.




                             Page 60                                GAO/AIMD-97-72 Child Support Enforcement
Page 61   GAO/AIMD-97-72 Child Support Enforcement
Appendix I

Total Cost for Each State’s Child Support
Enforcement System and the Federal and
State Shares of These Expenditures for
Fiscal Years 1981-1996
               State                  Federal share           State share Total expenditures
               Alabama                 $49,222,159            $13,253,068         $62,475,227
               Alaska                   11,071,718              4,653,294          15,725,012
               Arizona                  47,063,019              9,509,389          56,572,408
               Arkansas                 21,886,630              5,673,408          27,560,038
               California              248,299,485             95,658,921         343,958,406
               Colorado                 26,907,957              5,005,726          31,913,683
               Connecticut              13,981,700              4,623,786          18,605,486
               Delaware                   8,010,878             3,238,003          11,248,881
               District of Columbia       8,896,407             2,059,990          10,956,397
               Florida                  60,114,807             22,418,473          82,533,280
               Georgia                  41,611,875             12,697,507          54,309,382
               Guam                       1,357,280               179,404           1,536,684
               Hawaii                   15,070,420              3,968,630          19,039,050
               Idaho                    26,870,077              8,052,556          34,922,633
               Illinois                 64,753,779             24,385,762          89,139,541
               Indiana                  27,479,878              6,914,774          34,394,652
               Iowa                     31,310,719              7,975,500          39,286,219
               Kansas                   24,449,198              7,407,991          31,857,189
               Kentucky                 30,360,881              7,996,230          38,357,111
               Louisiana                14,004,464              2,542,250          16,546,714
               Maine                    13,446,950              3,246,462          16,693,412
               Maryland                 31,432,325              7,420,924          38,853,249
               Massachusetts            33,751,067              7,409,793          41,160,860
               Michigan                 66,577,358             10,713,170          77,290,528
               Minnesota                56,661,743             18,197,130          74,858,873
               Mississippi              16,031,897              3,943,213          19,975,110
               Missouri                 44,337,248             13,204,378          57,541,626
               Montana                    9,324,373             2,743,493          12,067,866
               Nebraska                 33,942,309             10,731,967          44,674,276
               Nevada                   17,107,631              4,001,180          21,108,811
               New Hampshire            18,451,398              4,930,405          23,381,803
               New Jersey               64,364,051             23,196,922          87,560,973
               New Mexico               23,169,261              6,372,763          29,542,024
               New York                 96,145,382             34,290,071         130,435,453
               North Carolina           43,056,136              9,723,106          52,779,242
               North Dakota               3,753,318             1,059,255           4,812,573
               Ohio                     55,426,872             18,155,838          73,582,710
               Oklahoma                 28,279,064              9,265,488          37,544,552
                                                                                   (continued)


               Page 62                                GAO/AIMD-97-72 Child Support Enforcement
Appendix I
Total Cost for Each State’s Child Support
Enforcement System and the Federal and
State Shares of These Expenditures for
Fiscal Years 1981-1996




State                            Federal share               State share Total expenditures
Oregon                               15,168,684                   4,015,436      19,184,120
Pennsylvania                         79,416,821               31,326,468        110,743,289
Puerto Rico                          22,882,169                   4,506,891      27,389,060
Rhode Island                         13,727,135                   2,863,771      16,590,906
South Carolina                       41,414,812               15,273,044         56,687,856
South Dakota                           3,427,507                   938,347         4,365,854
Tennessee                            33,337,753               11,458,018         44,795,771
Texas                               123,790,741               51,140,939        174,931,680
Utah                                 32,295,631               11,058,131         43,353,762
Vermont                                3,291,186                   949,286         4,240,472
Virginia                             66,684,309               25,108,768         91,793,077
Virgin Islands                         5,132,533                   818,705         5,951,238
Washington                           58,487,304               24,186,599         82,673,903
West Virginia                        17,011,816                   4,625,153      21,636,969
Wisconsin                            63,489,909               18,934,783         82,424,692
Wyoming                                8,824,173                  1,552,959      10,377,132
Total                           $2,016,364,197             $645,577,518       $2,661,941,715

Source: HHS. GAO did not independently verify this information.




Page 63                                            GAO/AIMD-97-72 Child Support Enforcement
Appendix II

Total Federal Cost for Each State’s Child
Support Enforcement System Including
Enhanced and Regular Funding for Fiscal
Years 1981-1996
                                      Enhanced federal       Regular federal        Total federal
               State                            share                 share        expendituresa
               Alabama                     $33,760,795           $15,461,364         $49,222,159
               Alaska                        2,118,686             8,953,032          11,071,718
               Arizona                      36,906,092            10,156,926          47,063,019
               Arkansas                     13,561,791             8,324,839          21,886,630
               California                   87,823,438           160,476,046         248,299,485
               Colorado                     23,468,483             3,439,474          26,907,957
               Connecticut                   7,945,490             6,036,209          13,981,700
               Delaware                      3,576,863             4,434,015           8,010,878
               District of Columbia          6,246,565             2,649,843           8,896,407
               Florida                      20,889,857            39,224,951          60,114,807
               Georgia                      21,425,098            20,186,777          41,611,875
               Guam                          1,286,507                70,773           1,357,280
               Hawaii                       10,262,676             4,807,744          15,070,420
               Idaho                        20,073,452             6,796,625          26,870,077
               Illinois                     20,890,710            43,863,070          64,753,779
               Indiana                      21,568,032             5,911,845          27,479,878
               Iowa                         21,720,806             9,589,913          31,310,719
               Kansas                       12,465,611            11,983,587          24,449,198
               Kentucky                     20,287,100            10,073,780          30,360,881
               Louisiana                    11,584,227             2,420,237          14,004,464
               Maine                         8,997,291             4,449,659          13,446,950
               Maryland                     22,376,517             9,055,808          31,432,325
               Massachusetts                24,232,685             9,518,382          33,751,067
               Michigan                     58,297,798             8,279,560          66,577,358
               Minnesota                    30,840,617            25,821,126          56,661,743
               Mississippi                  11,533,446             4,498,451          16,031,897
               Missouri                     30,714,110            13,623,138          44,337,248
               Montana                       5,348,540             3,975,833           9,324,373
               Nebraska                     21,982,444            11,959,866          33,942,309
               Nevada                       13,836,986             3,270,645          17,107,631
               New Hampshire                11,231,502             7,219,896          18,451,398
               New Jersey                   23,567,719            40,796,332          64,364,051
               New Mexico                   18,715,453             4,453,809          23,169,261
               New York                     36,806,611            59,338,771          96,145,382
               North Carolina               34,289,025             8,767,111          43,056,136
               North Dakota                  2,370,153             1,383,166           3,753,318
               Ohio                         25,313,569            30,113,303          55,426,872
                                                                                      (continued)


               Page 64                                   GAO/AIMD-97-72 Child Support Enforcement
Appendix II
Total Federal Cost for Each State’s Child
Support Enforcement System Including
Enhanced and Regular Funding for Fiscal
Years 1981-1996




                               Enhanced federal           Regular federal       Total federal
State                                    share                     share       expendituresa
Oklahoma                               15,366,150              12,912,914         28,279,064
Oregon                                   9,295,461                5,873,224       15,168,684
Pennsylvania                           25,242,187              54,174,634         79,416,821
Puerto Rico                            19,873,039                 3,009,130       22,882,169
Rhode Island                           10,483,904                 3,243,231       13,727,135
South Carolina                         20,183,220              21,231,592         41,414,812
South Dakota                             2,313,346                1,114,161        3,427,507
Tennessee                              19,932,879              13,404,874         33,337,753
Texas                                  31,166,306              92,624,435        123,790,741
Utah                                   14,285,463              18,010,168         32,295,631
Vermont                                  1,892,442                1,398,744        3,291,186
Virginia                               21,992,655              44,691,655         66,684,309
Virgin Islands                           4,514,866                  617,667        5,132,533
Washington                             12,529,291              45,958,013         58,487,304
West Virginia                          10,565,333                 6,446,482       17,011,816
Wisconsin                              37,614,490              25,875,419         63,489,909
Wyoming                                  8,349,121                  475,052        8,824,173
Total                              $1,043,916,894           $972,447,302      $2,016,364,197

a
    Some totals may not add due to rounding of component figures.

Source: HHS. GAO did not independently verify this information.




Page 65                                              GAO/AIMD-97-72 Child Support Enforcement
Appendix III

Overview of Systems Development Phases




                                                                                                 Users perform acceptance tests
                                                                                Acceptance       to validate functionality and
                                                                                                 processing needs.




                                                                Conversion      Data are converted and transferred to the new system.
Money




                                                  Testing       Software is integrated and tested to ensure that it meets users' needs.




                                   Coding        Software is written to support required functional processing identified by users.




                                  Systems are developed using the appropriate system solution and systems architectures
                    Design
                                  (i.e., software, hardware, security, communications, and data management).




        Analysis   System developers and users determine functional, quality, and architectural requirements.




                                                               Time

                                                          Source: Adapted from Roger F. Pressman, Ph.D., Software Engineering: A Practitioner’s
                                                          Approach (New York: McGraw-Hill, 1992).




                                                          Page 66                                                      GAO/AIMD-97-72 Child Support Enforcement
Appendix IV

Comments From the Department of Health
and Human Services




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and Human Services




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and Human Services




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and Human Services




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Comments From the Department of Health
and Human Services




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Comments From the Department of Health
and Human Services




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Comments From the Department of Health
and Human Services




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and Human Services




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Comments From the Department of Health
and Human Services




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Comments From the Department of Health
and Human Services




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Comments From the Department of Health
and Human Services




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Comments From the Department of Health
and Human Services




Page 78                                  GAO/AIMD-97-72 Child Support Enforcement
Appendix V

Major Contributors to This Report


                       Christie M. Motley, Assistant Director
Accounting and         Leonard J. Latham, Technical Assistant Director
Information            Robert F. Gerkin, Business Process Analyst
Management Division,   Norman F. Heyl, Business Process Analyst
                       Gwendolyn M. Adelekun, Business Process Analyst
Washington, D.C.       Michael P. Fruitman, Communications Analyst
                       Sharon O. Byrd, Senior Auditor


                       Carl L. Higginbotham, Senior Computer Specialist
Atlanta Regional       Amanda C. Gill, Staff Evaluator
Office
                       Yvonne J. Vigil, Information Systems Analyst
Denver Regional
Office




(511206)               Page 79                              GAO/AIMD-97-72 Child Support Enforcement
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