Audit of the California Department of Social Services Federal Tax Refund Offset Program

This final audit report provides the results of our review of California's procedures for ensuring that collections of delinquent child support payments were effectively being made under the Federal Tax Refund Offset program. We found that the State's procedures were generally adequate for ensuring that offsets were being made against Federal tax refunds. However, the State could increase recoveries (we estimate about $2.9 million over a 2-year period) and the number of cases accepted by the Internal Revenue Service for offset if it used available procedures for correcting Social Security numbers. Additionally, the State earned $2.1 million (Federal share $1.4 million) of interest on child support monies but did not report the interest earned as program income as required by Federal regulations.