Review of Undistributable Child Support Collections in Florida From October 1, 1998, Through December 31, 2005

The Florida Department of Revenue, Child Support Enforcement Program agency (the State agency) generally reported program income for undistributable child support collections in accordance with Federal requirements.  In Florida, child support collections are not subject to the State's abandoned property laws.  Instead, the State agency has to determine the collections to be undistributable or unidentifiable before processing them as program income.  From 1982 through 2005, the State agency accumulated about $31 million in child support collections. During our audit period (October 1998 through 2005), the State agency reported only $1.4 million as program income as a result of an Office of Child Support Enforcement audit.  In 2001 and 2002, the State agency improperly reversed $696,802 ($459,889 Federal share) of the program income related to outstanding checks.  These funds represented checks that were not exempt from the State's abandoned property laws.

We found that the accumulation of collections was possible, despite the State agency's compliance with Federal requirements, because of (1) the State's exemption of outstanding checks derived from child support collections from its abandoned property laws, (2) the State agency's significant delay in establishing a rule for determining when collections are considered undistributable, and (3) the lack of a policy to deal with child support checks that are characterized as distributed but remain uncashed indefinitely.

We recommended that the State agency (1) report program income for outstanding checks totaling $696,802 ($459,889 Federal share) that was incorrectly reversed and transfer this amount back to the State's General Fund and (2) develop a rule, as directed by Florida statutes, defining when a collection is deemed undistributable.  The State agency disagreed with our first recommendation but agreed with our second recommendation.