Review of Undistributable Child Support Collections in New Jersey From October 1, 1998, Through March 31, 2006

Federal regulations require States to offset Child Support Enforcement program costs by recognizing and reporting program income from undistributable child support collections and interest earned on child support collections.  States report to the Federal Government undistributable collections and program income quarterly on Federal Forms OCSE-34A and OCSE-396A.  For the period October 1, 1998, through March 31, 2006, the State agency did not recognize or report program income of $281,990 ($186,113 Federal share) for the undistributable child support collections and related interest.  In addition, during the same period, the State did not accurately report undistributable child support collections quarterly on its OCSE-34A to the Federal Government.  We recommended that the State agency (1) report $281,990 ($186,113 Federal share) as program income to the Federal Government and (2) provide program oversight and implement procedures and controls to ensure that undistributable collections and interest are identified and accurately reported as program income on Forms OCSE-34A and OCSE-396A.  State agency officials concurred with our recommendations.