Review of Colorado's Undistributable Child Support Collections for the Period October 1, 1998, Through September 30, 2005

Our objective was to determine whether the State agency appropriately recognized and reported program income for undistributable child support collections and interest earned on child support collections.  The State agency did not recognize and report program income for undistributable child support collections because the State agency did not follow its own policies and procedures.  As a result, for the period October 1, 1998, through September 30, 2005, the State agency did not recognize and report program income totaling an estimated $8,336 ($5,502 Federal share).  In addition, two county offices either transferred or held $129,807 of undistributable child support collections, which the State agency claimed were not Title IV-D.

We recommended that the State agency (1) report $8,336 ($5,502 Federal share) of Title IV-D program income after it transfers these collections to the State's abandoned collections account, or revise its quarterly Federal financial reports (Form OCSE-34A) to correct these transactions; (2) work with the Office of Child Support Enforcement (OCSE) to negotiate the Federal share of the $129,807 in undistributable child support collections that may be attributable to Title IV-D and report the negotiated amount (if any) on the Form OCSE-396A; (3) work with OCSE to review undistributable child support collections for the remaining county offices and determine whether they have appropriately declared, transferred, and reported any remaining collections as program income; and (4) strengthen enforcement of, and training in, policies and procedures to ensure that undistributable child support collections are recognized and properly reported as program income.

The State agency disagreed with most of our findings and recommendations.  After reviewing the State agency's comments, we adjusted our findings and recommendations.