Review of Undistributable Child Support Collections in Orange County, California, From October 1, 1998, Through March 31, 2006

For the period October 1, 1998, through March 31, 2006, California did not recognize or report program income totaling $2.2 million ($1.5 million Federal share) for Orange County's undistributable child support collections and interest earned on child support collections.  Undistributable collections result when a State receives a child support payment but cannot identify or locate the custodial parent or return the funds to the noncustodial parent.  States are required to offset Child Support Enforcement program costs, for which they receive Federal matching funds, by recognizing and reporting undistributable collections and interest earned on collections as program income.  The deficiencies occurred primarily because California had not sufficiently monitored the county's unclaimed collections and because the county had focused its resources on processing current child support collections. 

We recommended that the State (1) monitor the county's progress in resolving the status of unclaimed child support collections and report as program income those collections recognized as abandoned, (2) report program income for undistributable collections that the county agency already recognized as abandoned, and (3) report program income for interest earned on child support collections.  The State concurred with the findings and described how it was addressing the recommendations.