Statement of Nathaniel L. Young, Jr., Director,
Virginia Department of Social Services' Division of Child Support Enforcement, Richmond Virginia; 
President, National Council of Child Support Directors; Board Member,
National Child Support Enforcement Association; and Board Member,
Eastern Regional Interstate Child Support Association

Testimony Before the Subcommittee on Human Resources
of the House Committee on Ways and Means

Hearing on Child Support and Fatherhood

June 28, 2001

Good afternoon Mister Chairman and members of the Subcommittee. My name is Nick Young, and I am the Director of the Virginia Department of Social Services’ Division of Child Support Enforcement. I am also a Board member of the National Child Support Enforcement Association (NCSEA) and the Eastern Regional Interstate Child Support Association (ERICSA), as well as President of the National Council of Child Support Directors (NCCSD). I am here today in my dual capacity as Virginia’s Child Support Director and as President of NCCSD.

The subject before you today is "Child Support and Fatherhood Proposals." I am here today to share with you the numerous accomplishments that states have made against the backdrop of the progressive laws and systems Congress has worked so hard to put in place.

First, permit me to share a couple of telling statistics about Virginia’s Child Support Enforcement Program: Our caseload today is 394,000, representing approximately 558,000 children---25 percent of Virginia’s child population. Though Virginia is recognized as having a very efficient program, it is unfortunately the case that we carry a $1.8 billion cumulative arrearage, an amount that is growing by $200 million a year. During the past five years, our caseload has grown by 10 percent. Our collections have increased by an average of 13 percent per year for a total of 75 percent increase during the past five years. We are one of the states that can conduct our business both administratively and through the courts. As a result, approximately 70 percent of our cases are managed administratively, which saves a great deal of time, paperwork and money. Our work is also accurate and our data reliable; we have a very low rate of appeals of our administrative decisions. Virginia was one of the first two states in the nation to receive in early 1996 full federal certification of its automated case manage-ment system under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). Just last month, we again received the welcome news of federal PRWORA certification of our automated system. Currently, six states in the Nation share this achievement: Iowa, Nevada, New Mexico, Maryland, Washington, and Virginia.

Automation, in conjunction with the powerful tools at our disposal under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), is what will catapult states toward the vision that Congress holds for the Nation’s Child Support Enforcement Program. Just last week, Virginia’s new interactive web application was inaugurated. The rollout of this technological innovation makes Texas and Virginia the first states in the Nation to have designed and implemented a web-based customer services application that will give customers yet another way in which to access their updated payment and case information. Other states are not far behind in similarly using technology to bring more government services to customers.

There is lots of good news in Virginia,

• During the past five years, Virginia’s child support Enforcement Program has increased its support collections by 75 percent.

• The Division of Child Support Enforcement collected $347 million in State Fiscal Year 99 and $391 million in State Fiscal Year 00, an increase of 12.7 percent, and will collect $440 million this fiscal year.
  
• In addition to our new interactive web application, Virginia designed and implemented an interactive voice response system that improves communication with and services to all child support customers. Through the latter, Virginia fields over eight million customer calls each year with 70 customer services staff statewide.

• Since July 1998, we have offered customers the use of direct deposit to expedite payment and receipt of their child support. To date, 38,134 customers have taken advantage of this tool. Customers are signing up for this service at a rate of 1,000 per month.

• Virginia’s pioneering New Hire Reporting Program began before the national program under PRWORA and has resulted in over $60 million in child support that otherwise would not have been collected. Using matches from New Hires, Virginia is automatically generating income withholding notices, which saves countless hours in staff time.

• Our ongoing KidsFirst Campaign, which sprung from a one-time limited Gubernatorial amnesty program offered to 57,000 of the most egregious support evaders in 1997, has collected over $150 million for children owed past due child support. As important as collecting financial support, KidsFirst has heightened and sensitized public awareness to the plight of children owed child support. The Campaign encourages both parents to assume financial support of their children and increases the likelihood that children will grow up with a sense of financial security, and a respect for personal responsibility—both hallmarks of the Nation’s Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). An added bonus has been enhanced rapport with the law enforcement community and the judiciary.

• Increased emphasis on the inclusion and enforcement of medical support as an intrinsic ingredient of child financial support.

• Recently, Virginia was cited by the National Center for Children in Poverty as one of only four states in the nation showing significant progress in the area of fatherhood program promotion.

• More than 70 community-based fatherhood initiatives are currently underway in Virginia. These community-based groups focus on a variety of areas including new and expecting fathers, young fathers, incarcerated fathers, fathers of children with special health care needs, visitation and medication, mentorship and school involvement. Over 250 new community leaders are trained each year on how to provide effective services to men in being better emotional and financial providers for their children.

• Judicious use of the tool of suspending or denying driver permits of egregiously-delinquent NCPs, with the primary intent being to motivate them to pay what they owe to avoid loss of their permits. Since 1995, when this program was initiated, only 2,900 NCPs have undergone action to suspend their permits, while approximately $100 million in delinquent financial and medical support as a result of this potent initiative has been collected attributable to the "threat."

• Virginia has fully implemented the revocation of both occupational and recreational licenses, as well as the denial of passports to delinquent parents.

• Virginia’s Paternity Establishment Program (PEP) is a model of collaboration and cooperation. Established in 1990, PEP grew under welfare reform into an effective program that gives unmarried parents the opportunity to voluntarily acknowledge paternity in the hospital, before the child goes home. Currently, 68 hospitals are participating statewide, generating 13,000 paternities per year.

• Virginia returned $5.41 in collections for every dollar spent in State Fiscal Year 00.

• Virginia was the first state in the Nation in 1998 to begin booting vehicles as a technique for gaining the attention of recalcitrant delinquent noncustodial parents. This initiative, which began in one locality in 1998, was expanded statewide in December 1999. To date, over $420,000 has been collected from 79 bootings under this initiative. Furthermore, Virginia’s successful booting initiative is cited as a model by federal authorities and has been included in federal law.

Virginia’s accomplishments are but a sample of the innumerable successes that the fifty states and four territories have achieved. Among these achievements are:

• Arizona, Georgia, and many other states are using access and visitation programs to reconnect fathers with their children and to address the root causes of nonsupport. They are developing partnerships with hospitals to increase paternity establishments and with workforce development programs and community-based organizations to address a wide range of barriers faced by many fathers in getting a job.

• California has completely restructured its child support program to achieve greater accountability and facilitate a sound approach for an automated statewide system. The state has increased program spending by 17 percent during the past two years to underscore its commitment to the child support program. Despite automation penalties, California’s collections will exceed $2 billion this year, a 12 percent increase over the past year.

• Connecticut’s Legislature passed historic child support legislation during 2001 that mandates regulation of private child support collection agencies. The practices of some private child support collection agencies tend to deprive custodial parents and their children of monies that should come to them – often enriching the collection agencies on the basis of collections in which they had no role. This bill includes private child support collection agencies in the state's existing Fair Debt Collection Act that regulates consumer collection agencies and gives the Banking Department authority to license and regulate them. The bill prohibits private child support collection agencies from deducting a fee from any child support payments collected through the efforts of a governmental agency. In addition, it limits the imposition of a fee for the collection of any child support overdue at the time of the contract to twenty-five per cent or less of overdue support actually collected.

The state of Connecticut was included in a federal grant to participate in a regional process for executing liens and creating a regional "Child Support Lien Network" of delinquent noncustodial parents for the purpose of intercepting insurance proceeds. This project has demonstrated significant potential as a new child support collection tool. Connecticut has already collected over $200,000 through this program in less than one year.

• Florida expects to collect over three-quarters of a billion dollars this year--over a 90% increase in collections over the last 6 years. These increases are expected to increase significantly through initiatives such as the phase-in of a new automated system, which allows each business process to be re-engineered and leverage state-of-the-art technology; piloting an administrative support order establishment process; and dedicating resources to reduce undistributed collections.

• Michigan has an innovative NCP work referral program to its "Michigan Works" agency. The Child Support Program pays none of the costs. NCP's referred to the program either go directly to work or they get education or skills training. Clearly, employing the idea that anyone can be referred regardless of funding source is an important change in the way services are funded.

• Oregon’s child support program is co-located with the Department of Human Services, enabling the program to maintain its close linkage with the TANF and other programs aimed at helping families and children to attain and maintain self-sufficiency. For delivery of IV-D program services, the IV-D office contracts with the Oregon Department of Justice and with county district attorneys the legal arena to collect child support. This partnership structure has worked well, in allowing the Oregon IV-D program to maintain its close linkage with social service programs while still being able to take effective action in collecting support for families.

• In New York, where annual collections have doubled since 1994 to over $1.19 billion in 2000, the State initiated automatic cost of living increases in child support orders, to keep pace with inflation and allow families to stay off welfare.

• The North Carolina Child Support Program has created five special teams beginning to assist local child support offices in improving casework results. These teams are proving successful and more money is being collected than ever before in North Carolina's CSE program. North Carolina's collections for children have increased by 226% since State Fiscal Year 91 and are continuing to grow.

• Texas is wholly invested in a comprehensive customer services strategy that has resulted in a 24 percent increase in the number of customers who indicate satisfaction with the State’s child support services. Each night in Texas, 1,600 income withholding orders are automatically issued to employers. In State Fiscal Year 00, Texas collected over a billion dollars for the first time and expects collections to surpass $1.2 billion this year.

The aforementioned highlights are but a few of the myriad successes that states are achieving. Our time together today and the printed testimony do not allow the publicization of the host of activities ongoing in all of our states and territories.

All of the IV-D directors and the federal government are taking a hard look at arrears management in conjunction with fatherhood programs. Connecticut, for example, is enthusiastically addressing this important issue.

You also asked me that I come before you to tell you what Congress could do to help the Nation’s Child Support Enforcement Program. Challenges to the Child Support Enforcement Program abound, yet the states are heartened and encouraged by the support Congress has shown the Child Support enforcement Program.

In answer to your invitation to opine what Congress should do to assist states, I would offer that you "stay the course." The enactment of PRWORA has served as the catalyst for the most comprehensive revisions to the nation’s Child Support Enforcement Program in its 26-year history and the Nation’s Child Support Directors are enthusiastic about building on that landmark legislation and fully employing the powerful tools it provides. Let us continue our progress unimpeded by additional sweeping changes in the program. Such changes will serve only to distract us from our core responsibility of collecting child support and possibly dilute our effectiveness. Comprehensive program changes at a time when many states are still working to fully automate their child support programs to take advantage of new federal tools can compromise their progress.

Recently, the Nation’s child support directors formulated a list of priorities. We urge Congress to continue its tremendous level of federal support by focusing on these several important areas. They include:

• Fiscal Issues:

• Simplifying distribution
• Restructuring program funding
• Removing the cap on incentives
• Federal financial participation for non-IV-D payment processing and bad checks
• Extending Federal Financial Participation rates at the 80 percent rate for approved child support enforcement systems (CSES) after October 1, 2001
• Penalties

• Improving Interstate case management
• Medical support
• Private access and confidentiality regulation
• Complete implementation of PRWORA mandates, evaluation, and follow-up changes
• A strategic plan for technology
• Fatherhood initiatives
• Tribal

Prominent among this list are four areas so pivotal to the Child Support Enforcement Program that they warranted official resolutions drafted by the National Council of Child Support Directors. I will enumerate them here, as follows:

1. The resolution on Incentive Caps supports:

that Congress should amend federal law to eliminate the cap on the child support federal incentive funding because the current incentive structure requires some states to lose in order for others to gain. The cap requires a computation of each state’s incentive in comparison to all states after the end of a fiscal year, creating an unstable and unpredictable prospective financial planning environment. It is not a true performance incentive as there is no guarantee that improved performance will result in increased incentive payments.

2. The resolution on the Reinvestment of Federal Automation Penalties supports:

that Congress should amend the federal legislation that imposes fiscal penalties on states that have failed to implement 1) a statewide child support automated system by October 1, 1997, and 2) PRWORA requirements for certification by October 1, 2000. The amendments should:

a) subtract a state’s information technology expenditures in the year prior to a year in which the penalty is applied from the dollar amount on which the technology penalty is calculated.

b) allow for reinvestment by reducing the penalty amount by any additional state general funds invested in the program.

c) require the Secretary of the Department of Health and Human Services to hold in abeyance any penalty assessed in a fiscal year if the Secretary determines a state to be in compliance with the approved corrective action plan.

3. The resolution on Funding supports:

a) that OCSE and Congress should provide for full and sustained FFP for all aspects of the Child Support Program at current or enhanced levels.  Supports that Congress should ensure the continuation of 90 percent FFP for genetic testing.

b) that Congress should amend federal law to extend the use of 80 percent FFP to October 1, 2005, for enhancements to automated systems required by PRWORA.

c) that Congress should provide enhanced FFP to reduce the impact on the states’ child support budget when states are required to implement new mandates or make substantial revisions to existing programs.

d) that Congress provide enhanced 90 percent FFP for medical support activities for a limited 5-year period.

e) that OCSE and Congress should work with state IV-D Directors to identify methods for ensuring that stable and adequate levels of investment in the program by federal, state and local governments advance the child support program’s evolving mission.

4. The resolution on Medical Support supports:

a) that OCSE should immediately act on the nonlegislative recommendations of the Medical Child Support Working Group.

b) that OCSE and Congress should consult with state Child Support, state Medicaid and state CHIP programs, and national child support associations to ensure consistent policies related to IV-D medical responsibilities.

c) that OCSE report to Congress and recommend that a medical support measure not be incorporated into the performance measure system and tied to funding at this time and that the implementation of any medical support performance measure be phased in to allow states to implement the Working Group’s recommendations.

d) the recommendation of a plan for states and the federal government to work together to identify medical support outcomes and to define the work of the IV-D program in achieving those goals.

The last subject, fatherhood initiatives, segues into my final remarks. A few demographics about fatherless children are in order:

• Twenty-four million children live without their biological father
• Children who do not have a relationship with their biological father are shown to be:

• Five times more likely to live in poverty,
• Twice as likely to be abused,
• More likely to bring weapons and drugs into the classroom,
• Twice as likely to commit crimes,
• Twice as likely to drop out of school,
• More likely to commit suicide,
• Over twice as likely to abuse alcohol or drugs, and
• More likely to become pregnant as teenagers.

• The number of children living with only their mothers and no father figure grew from just over 5 million in 1960 to over 16.6 million.
• About 40 percent of children who live in fatherless households have not seen thei fathers in at least a year.

To address these telling statistics, the President’s budget included a Health and Human Services "Blueprint for New Beginnings." This two-pronged approach includes competitive grants to help unemployed or low-income fathers to avoid or leave welfare as well as promote successful parenting and strengthen marriage.

•  We support this approach because:

• It promotes responsible fatherhood and strengthens the role of fathers
• It is consistent with welfare reform initiatives and promotes competitive grants to faith-based and community organizations that help unemployed or low-income fathers and their families avoid or leave cash welfare
• Fatherhood programs make child support order and paternity establishment and enforcement easier because fathers are doing the right thing on their own initiative

We recommend supporting the President’s initiatives with the caveat that grants to faith-based and community organizations to serve these populations should come through the states, not be granted directly by the federal government. We take this position because:

• States know their communities and needs best
• States know their providers best
• States already have mechanisms in place for competitive and negotiated grants
• States have mechanisms for successfully administering grants
• Unnecessary taxpayer expense to set up an additional federal operation when states are in the best position to implement the grant program

Thank you.