Undistributed Collections:
What challenges do we face?
CSDA 2nd Annual Training Conference & Expo
Anaheim, CA
September 19, 2007
Today’s Presenters
• Elizabeth Morgan,
Center for Support of
Families
• Larry Satter, CA DCSS
• Diann Fithian,
CA DCSS
• Avi DeTurenne,
Los Angeles LCSA
• Laura Roth,
El Dorado LCSA
UDC: The Picture at the
National Level
• From FFY 2001 to FFY 2004, levels of
UDC steadily declined
• In FFY 2001, net UDC was $738
million
• For FFY 2006, net UDC was reported
as $485 million, a 37% decrease from
FFY 2001.
Net UDC
$800,000,000
$700,000,000
$600,000,000
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$100,000,000
$0
2000
2001
2002
2003
2004
2005
2006
UDC Pending Distribution
• Received within past 2 business
days
• Tax Offset holds
• Future Support
• Pending Legal Dispute
• Transfer to Other Agency
UDC “Unresolved”
•
•
•
•
•
Unidentified Collections
Pending Locate
Uncashed or Stale-Dated
Inaccurate/Missing Information
Other Collections Undistributed
UDC Unresolved
• Federal government began tracking
beginning with FFY 2005
• FFY 2005 UDC Unresolved: $200.7
million, or 40.4% of net UDC
• FFY 2006 UDC Unresolved: $191.1
million, or 39.4% of net UDC
Net UDC FY 2005 and FY 2006 for States with Top
Six Caseloads
$90,000,000
$80,000,000
$78.1M
$70,000,000
$66.7M
$60,000,000
$53.1K
$50,000,000
$47.5K
$40,000,000
$30,000,000
$32.5K
$26.2K
$20,000,000
$30.7K
$27.1K
$26.2K
$22.3K
$14.8K
$13.0K
$10,000,000
$0
CA
TX
MI
Net UDC 2005
OH
Net UDC 2006
NY
FL
Percentage of Unresolved UDC FY 2005 and FY
2006 for States with Top Six Caseloads
90.0%
80.0%
83.8%
70.0%
70.4%
69.7%
64.8%
60.0%
62.7%
50.0%
45.1%
40.0%
30.0%
32.9%
27.2%
24.7%
20.0%
21.1%
18.5%
18.9%
10.0%
0.0%
CA
TX
MI
% Unresolved FY05
OH
% Unresolved FY06
NY
FL
California Quarterly UDC by
Category
CHILD SUPPORT ENFORCEMENT PROGRAM
ITEMIZED UNDISTRIBUTED COLLECTIONS
Quarterly UDC by Category
Collections Received Within The Past Two Business Days
6/05
9/05
12/05
3/06
6/06
9/06
12/06
3/07
356,695
0
0
0
0
0
652,139
553,496
0
0
0
0
0
0
0
3,018,820
Collections Received and Being Held for Future Support
1,389,650
1,393,669
3,749,739
4,001,822
5,034,936
4,885,851
4,989,276
5,359,522
Collections Being Held Pending the Resolution of Legal Disputes
4,146,203
2,012,205
2,220,548
2,935,940
2,876,399
2,562,524
2,811,098
3,887,380
432,450
211,373
243,783
369,836
486,887
317,726
263,920
310,299
4,334,795
4,455,259
3,774,632
3,254,016
1,828,333
1,490,931
1,274,132
1,528,857
11,531,497
10,086,048
7,087,418
8,639,619
9,597,793
8,867,690
9,487,934
11,122,166
1,511,515
2,222,070
2,393,584
2,658,037
4,705,688
5,877,346
5,942,372
5,785,059
0
28,632
2,855
4,772
6,768
225,438
124,551
175,294
1,874,837
1,865,095
1,869,586
1,841,143
1,809,998
1,983,520
3,784,905
2,133,507
22,274,351
21,342,145
23,705,185
26,346,802
26,211,026
29,330,327
33,874,400
-12.91%
-4.19%
11.07%
11.14%
-0.52%
11.90%
15.49%
Collections From Tax Offsets Being Held for Up to Six Months
Collections Being Held Pending Transfer to Other State or Federal Agency
Unidentified Collections
Collections Being Held Pending the Location of the Custodial or Non-Custodial
Parent
Collections Disbursed but Uncashed and Stale-Dated
Collections With Inaccurate or Missing Information
Other Collections Remaining Undistributed
TOTAL UDC
% change since 6/2005
25,577,642
California Annual UDC by
Category
CHILD SUPPORT ENFORCEMENT PROGRAM
ITEMIZED UNDISTRIBUTED COLLECTIONS
Annual UDC by Category
FFY 2001
9/01
FFY 2002
9/02
FFY 2003
9/03
Collections Received Within The Past Two Business Days
FFY 2004
9/04
FFY 2005
9/05
784,861
Collections From Tax Offsets Being Held for Up to Six Months
-
FFY 2006
9/06
FFY 2007
3/07
-
-
553,496
-
-
3,018,820
Collections Received and Being Held for Future Support
1,758,694
1,393,669
4,885,851
5,359,522
Collections Being Held Pending the Resolution of Legal Disputes
5,509,155
2,012,205
2,562,524
3,887,380
Collections Being Held Pending Transfer to Other State or Federal Agency
1,044,345
211,373
317,726
310,299
Unidentified Collections
Collections Being Held Pending the Location of the Custodial or Non-Custodial
Parent
3,254,182
4,455,259
1,490,931
1,528,857
6,833,002
10,086,048
8,867,690
11,122,166
Collections Disbursed but Uncashed and Stale-Dated
1,456,205
2,222,070
5,877,346
5,785,059
28,632
225,438
175,294
1,873,278
1,865,095
1,983,520
2,133,507
22,513,723
22,274,351
26,211,026
33,874,400
Collections With Inaccurate or Missing Information
-
Other Collections Remaining Undistributed
TOTAL UDC
% change since 9/2001
27,345,689
23,449,063
-14.25%
28,800,483
22.82%
-21.83%
-1.06%
17.67%
29.24%
OCSE 34a and Schedule UDC
Preparation (Current)
Current Process
• Consortia systems upload collections, disbursements and UDC to
CADS
• LCSA director approves monthly CADS reports (Not required for
transitioned LCSAs)
• CADS validates data between CS34, CS35 and Schedule UDC
reports
• DCSS uploads CADS data to CSE
• CSE combines transitioned LCSAs, Non IV-D and CADS data
• DCSS produces OCSE 34A and Schedule UDC reports within
CSE
• DCSS performs additional validations with by reviewing the CSE
audit extract file
OCSE 34a and Schedule UDC
Preparation (Future)
Future Process
•
•
•
•
•
CSE will contain all collections, disbursements and
UDC data
CSE will validate data between CS34, CS35 and
Schedule UDC reports
DCSS produces OCSE 34A and Schedule UDC
reports within CSE
DCSS performs additional validations with by
reviewing the CSE audit extract file
LCSAs will have access to CS34 and CS35 data
within CSE
Escheatment (Local Process)
•
•
•
LCSAs are encouraged to escheat pre-SDU UDC that meet the
requirements in CSS letter (04-22) and local policy/procedures.
An emphasis shall be placed on escheating UDC that will not
convert to CSE (e.g., CASES LGE or “X” data). LCSAs who cannot
escheat these types of UDC prior to conversion must perform the
following:
– CASES counties: Prior to CSE conversion, must create manual
receipts (a.k.a. “R” receipts), using the guidelines provided to the
conversion managers by Mary Clesi.
– ARS counties: A procedure to address UDC that is not in the ARS
application is not available. Please work with conversion manger to
resolve any outstanding issues
DCSS will transfer funds to LCSAs to complete the escheatment process,
if necessary
Note: It is important to escheat and/or ensure these funds convert to CSE. If valid UDC does not
transfer to CSE, financial reports will not be accurate!
Escheatment (State Process)
• A process to escheat funds at the State level is currently
under development.
• It is anticipated that the State escheatment process will
utilize the State Controller’s Unclaimed Property Fund and
supporting processes.
• DCSS will utilize CSE to manage the escheatment process.
• Changes to CSE may be necessary in order to comply with
recent changes to the Unclaimed Property Law
• Additional information on the State escheatment process
will be relayed in a future CSS letter
UDC Task Force
DCSS has been working with the CSDA Finance
Committee to establish a task force to monitor UDC issues.
CFW - Ds
• Resolve issues related to Non IV-D cases
and/or cases with a combination of Non IV-D
and IV-D.
• Unit started 1/1/07
• Consists of 9 staff members
• No enforcement actions
Non public ph# 916-845-7747
Email address: CFWD@ftb.ca.gov
Flow of requests to the CFW-D
SDU
CFW-D
State DCSS
Call Center
CFW-L (County Requests)
What We Do
• Research and resolve escalated customer
service financial inquiries
• Adjust statewide collections
• Research and release designated
suspended collections
• Manage Non IV-D disbursements
• Maintain Non IV-D participant information
• Manage Non IV-D receivables
How to minimize UDCs
Educate remitters (employers)
If Non IV-D case – advise to put case number on check
If IV-D case – advise to put participant number on check
Ensure cases have complete information
If submitting a request to allocate payment always verify
CP address exists and current wage assignment is
entered in CSE
If requesting a duplicate Non IVD case be closed
IV-D case has all the needed information
Must have current valid IV-D wage assignment
UDC Challenges
• Employers not responding
• Employers not providing correct
information with payments
• Case information not current
• Converted UDCs from counties
• Increasing communication between
CFWDs and CFWLs
– Our goal is to prevent or resolve UDCs as
efficiently as possible!
LCSA Level: Root Causes and
Reduction Strategies
• Why payments go on hold
• Collection Hold vs. Distribution Hold
• CDRT – Collection and Distribution
Research Team
• Organized along the structure of the
State UDC Report
• Reduction Strategies
State UDC Hold Categories
• Collections From Tax Offsets Being Held for Up to Six
Months
• Collections Received and Being Held for Future Support
• Collections Being Held Pending the Resolution of Legal
Disputes
• Collections Being Held Pending Transfer to Other State or
Federal Agency
• Unidentified Collections
• Collections Being Held Pending the Location of the
Custodial or Non-Custodial Parent
• Collections Disbursed but Uncashed and Stale-Dated
• Collections With Inaccurate or Missing Information
• Other Collections Remaining Undistributed
Collections From Tax Offsets Being Held for Up to
Six Months
Distribution Holds
•Injured Spouse
Collection Holds
•Overage of Injured Spouse Claim IRS intercepts
Collections Received and Being Held for Future
Support
Collection Holds
•Future Payment
•Voluntary Payment
Collections Being Held Pending the Resolution of
Legal Disputes
Collection Holds
• AP Files Bankruptcy
• Financial Dispute
• FTB Intercept
• Court Ordered Impound
• IRS Intercept
• Legal Dispute
• Current Spouse Filed Tax Protest
• Trust Fund Hold
• UIFSA Responding Case
• Writ
Distribution Holds
• Dispute
• Pending Legal
Collections Being Held Pending Transfer to Other
State or Federal Agency
• System Processed
Unidentified Collections
Collection Holds
• Court Order Required
Collections Being Held Pending the Location of the
Custodial or Non-Custodial Parent
Collection Holds
• Account(s) Closed
• AP Address Unknown
• AP Return
• Arrears Paid In Full
• Misidentified (MID)
• Overpayment
• System Hold
• Warrant Cancelled
Distribution Holds
• CP Address Unknown
• Agency Disbursement Method Unknown
• Manual Distribution Hold
• CP Request
• Overdisbursement
• KinGap
• Stop Payment
• Return Receipt
• DPSS Return
• Warrant Cancelled
Collections Disbursed but Uncashed / StaleDated
Collection Holds
• Uncashed / Stale-Dated
Collections With Inaccurate or Missing
Information
Collection Holds
• Inaccurate / Missing Information
Other Collections Remaining Undistributed
Collection Holds
• Collection Date Required
• Bad Check Recovery
THREE-PRONGED REDUCTION STRATEGY
CLEAR IMMEDIATE PRIORITY HOLDS
– Priority Hold Codes
– Cases brought to our attention through CP/NCP calls,
complaints to OMBUDS, State Hearing cases
– Dollar amounts over $5,000 or repeating payments
REVIEW HOLD DATES TO CLEAR BACKLOG
– Review oldest holds and determine if they can be
resolved
– Follow up on referrals to divisions for operational work
PREVENT UNNECESSARY HOLDS
– Supervisor Approval
– End dates on holds
Conversion Preparation
• Work pre-SDU stale-dated checks
prior to conversion!
• Understand procedures for releasing
money in CASES – and do it!
UDC and CSE
• UDC will most likely increase after an
LCSA transitions
• IRS hold times
• Refund hold times
• DCT & held payments
• Automatic system refunds
Your comments & questions