April 26, 1999

MEMORANDUM FOR MEMBERS OF THE CABINET

TO:   THE MEMBERS OF THE CABINET

FROM:   THE ATTORNEY GENERAL

SUBJECT:   Minimum Due Process Guidelines For Agencies To Deny Federal Financial Assistance

On September 28, 1996, the President issued Executive Order 13019, 61 Fed. Reg. 51,763 "Supporting Families: Collecting Delinquent Child Support Obligations." Section 1 of the Executive Order requires the Secretary of the Treasury to collect past-due child support obligations by administrative offset. Section 2(b) of the Executive Order requires the head of each executive agency and department to deny federal financial assistance to those individuals whose payments are subject to administrative offset because of delinquent child support obligations. Federal financial assistance is defined as federal loans (other than a disaster loan), loan guarantees, or loan insurance. Section 2(c) of the Executive Order requires the Attorney General, in consultation with the Secretary of Health and Human Services and other affected agencies, to issue guidelines to the executive agencies and departments concerning minimum due process standards to be included in the procedures used in denying federal financial assistance. The attached Guidelines:

(1) Define federal financial assistance and the persons who may be denied such assistance if their delinquent child support obligations have been referred to Treasury for offset (Guidelines, Section 2).

(2) Set forth the policy that federal financial assistance will be denied to those with delinquent child support obligations except where (a) denial is not permitted by law; (b) denial would likely result in valid legal claims for damages against the United States; (c) denial would be inconsistent with the best interests of the child or children with respect to whom a child support obligation is owed; or (d) denial should be waived (Guidelines, Sections 3-6).

(3) Set minimum due process procedures which grant to the person whose name has been referred to Treasury for offset of delinquent child support obligations: (a) notice of the proposed denial of federal financial assistance; (b) an opportunity to contest the proposed denial, which includes either a "paper" or oral hearing; (c) an opportunity to request that a decision denying federal financial assistance be reversed (Guidelines, Sections 10-14).

The attached Guidelines have been reviewed and approved by the Department of Health and Human Services and the Department of the Treasury. Pursuant to Section 2(b) of the Executive Order, they should be incorporated promptly into any existing procedures you have for approving or denying federal loans (other than a disaster loan), loan guarantees, or loan insurance. If you have any questions or need assistance, please contact John W. Showalter, Tel: (202) 307-0244.

As you know, this Administration has placed a high priority on assisting families in collecting past-due child support obligations. Appropriate denial of federal financial assistance to those who have defaulted on such obligations can be an important motivation to inspire people to meet their family responsibilities and can help in the important work of ensuring support for children. I thank you for your assistance in implementing these Guidelines.