County Child Support Program’s Accounting Under Scrutiny by State

State officials are examining Los Angeles County’s long-criticized child support accounting practices after finding that inflated collection figures could jeopardize tens of millions of dollars in federal funds for California.

Continuing deficiencies in Los Angeles County’s child support program also have prompted the state to take the unprecedented step of hiring an outside consulting firm to recommend improvements.

“L.A.’s performance continues to be a problem for the statewide program,” Curtis L. Child, director of the California Department of Child Support Services, said Friday. “And when they have such a significant percentage of the statewide caseload, it affects the state’s ability to do well on [federal] performance measures.”

Within weeks, he said, Denver-based Policy Studies Inc. will begin a three-month examination of Los Angeles County’s Bureau of Family Support Operations. The $250,000 study will coincide with the transfer of Los Angeles County’s program from the district attorney’s office to a new county Department of Child Support.

The transfer is part of the Legislature’s 1999 overhaul of California’s child support system, which was taken away from district attorneys after years of poor performance. Under new state regulations, each of the state’s 58 counties will have a separate agency with responsibility for collecting child support for single parents and repaying the government for the cost of welfare for families with dependent children.

In Los Angeles County alone, state officials say, the transfer of the program from the district attorney’s office to a new department will save $1.3 million in administrative overhead--money that will now be put back into child support programs.

But even as Los Angeles County moves toward a new program, the administration of its current child support collections remains controversial.

Last week, state director Child confirmed that officials are examining Los Angeles County’s accounting practices after learning from child support advocates that the county had been double-counting collection numbers for past-due support.

The practice, officials said, was discovered in the quarterly reports sent to both the state and the county commission that oversees child support. And the financial consequences could be severe for California’s child support program if the county’s quarterly numbers are reflected in the yearly totals submitted to the federal government.

“Obviously, our concern is that we look at the [actual] quarterly numbers and there is a . . . drop from what was reported,” Child said. “If that held, we would have some trouble. It would put us in jeopardy of losing our federal performance money . . . and that could mean tens of millions of dollars.”

Wayne Doss, director of the Los Angeles County program, was unavailable for comment. A department spokeswoman, Yvonne Palmer, said the county’s quarterly numbers have been corrected and will have no impact on its final year-end report.

Palmer added that the county has no problem with the hiring of the outside consulting firm. State officials have indicated that they may also use the firm to examine other counties, depending on what they find in Los Angeles. “We are not being singled out,” she said.

As for the department’s performance, Palmer said that its collections have increased by an annual average of 21% during the last several years--a figure that exceeds the statewide improvement rate. Although a previous audit by PricewaterhouseCoopers found that the county’s program needed improvements, Palmer said the report concluded that the caseload was “perhaps the most difficult . . . of any jurisdiction in the nation.”

The most recent state reports to the U.S. Department of Health and Human Services show that Los Angeles County remains far behind the rest of California in the child collection measurements established by the federal government.

In comparing the state’s 58 counties for fiscal 2000, Los Angeles ranked 34th in cost-effectiveness, 45th in establishing paternity, 48th in collecting past-due child support, and 55th in both collecting current support and percentage of cases in which the county has obtained a court order for support.

“There has not been significant improvement in Los Angeles County’s performance [in recent years],” said Child. “Now that we have a statewide program . . . we are looking at the reasons for Los Angeles County’s historically lower performance.”

Beyond the county’s staffing and procedures, state and federal officials also are looking at the reliability of the child support collection data generated by the county Bureau of Family Support Operations.

Under new federal guidelines, the reliability of that information is subject to annual review on a state-by-state basis. Final numbers are not available, but preliminary reports suggest that Los Angeles County’s data reliability falls well below the 90% required by federal regulations.

“It looks as if L.A.’s [data] reliability is a cause for concern,” Child said.

If that proves true when the auditing is complete, Los Angeles County’s performance would make the state subject to additional federal scrutiny. And if the data problems are not corrected, Child said, the federal government could cut the state’s welfare funding by $72 million, to $144 million.

Against that backdrop, state officials hope the pending transition of child support programs to new county departments will provide a fresh start for improving services, including the reliability of performance statistics. “As part of the transition, data reliability is now a priority for us in the state,” Child said. “We are concerned about two things: how well counties are doing and how accurate is their data.”

In anticipation of the new department, Los Angeles County officials have narrowed the choices for a director to five finalists.