Review of Undistributable Child Support Collections in Massachusetts From October 1, 1998, Through September 30, 2005

EXECUTIVE SUMMARY:

Our objectives were to determine whether the State agency appropriately reported program income for undistributable child support collections and interest earned on program funds. 

For the period October 1, 1998, through September 30, 2005, the State agency did not report program income totaling $1.9 million ($1.3 million Federal share) for child support collections that qualified as abandoned property. Pursuant to Federal requirements and Massachusetts law, the State agency should have declared these collections abandoned and reported them as undistributable and program income. This deficiency occurred because the State agency did not have adequate procedures to identify and report collections that met the State's abandoned property requirements. The regional Office of Child Support Enforcement (OCSE) audit office will review the acceptability of the State agency's calculations of unreported interest. 

We recommended that the State agency: (1) report child support collections totaling $1.9 million ($1.3 million Federal share) as abandoned and undistributable on Federal Form OCSE-34A, “Child Support Enforcement Program Quarterly Report of Collections,” and report this amount as program income on the next quarterly Federal Form OCSE 396-A, “Child Support Enforcement Program Financial Report” and (2) revise its procedures to ensure that undistributable child support collections meeting the State's abandoned property requirements are reported as undistributable and program income on the quarterly Federal financial reports. The State agency generally agreed with our recommendations.

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