COLORADO

Aggressive Automated Enforcement Balanced with Fairness to Obligors

Goals:

• Design a systems structure to capture both the terms of payment (the current monthly support obligation and the monthly amount due on arrears) for each court order with the paying behavior of the obligor.
• Reconstitute the child support obligation into a consumer credit presentation, taking into account that consumer credit reporting rules and realities are very different from child support financial rules and realities.
• Provide county Child Support Enforcement (CSE) technicians with the tools to gain the "big picture" regarding the status of enforcement actions being used against an obligor and that obligor's paying behavior on all of the orders.

Description: In the fall of 1997, Colorado set out to redesign its automated enforcement remedies. The redesign was part of a three-year project called Monthly Amount Due Joint Application Design (MADJAD), Automated Enforcement Re-Engineering. Designing a centralized payment plan and payment structure would allow Colorado Child Support Enforcement (CSE) to be aggressive in the use of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) required automated enforcement remedies while having the ability to enforce fairly, to honor payment plans and to encourage paying behavior. It would provide CSE with a centralized system functionality to tailor to the unique characteristics of different remedies (e.g., attachment of income streams, asset intercepts, license suspensions) and to the unique situations of the individuals subject to enforcement (differences in disposable income, those with single or multiple orders, the sources of the payments made). Our financial system had been designed with the court order as the organizing feature. This totally new functionality - - with the obligor as the central focus - - would result in the redesign. The project design included advice from staff in all areas of the state division and included the participation of stakeholders (such as lenders and representatives of the major consumer reporting agencies) and county CSE workers.

The project was designed to address the following issues:

• The use of pay criteria for Driver's License Suspension, Professional/Occupational License Suspension, New Hire Reporting (automated income assignments), State Vendor Payment Offset, and Financial Institution Data Match.
• Establishment of an obligor payment plan that includes monthly support obligation, monthly payment on arrears and total monthly payment due (used by the automated enforcement remedies to monitor payment compliance and to trigger remedies).
• Automation of the enforcement remedies to the fullest extent possible and reduction of the need for technician intervention whenever possible.
• The aging of accounts for the purpose of reporting child support debt to the consumer reporting agencies. Previously, the automated system reported obligors as either current or delinquent depending on the existing ledger balances. The ability to assemble all critical financial information for an order - - monthly support obligation, monthly amount due on arrears, arrears total, aging information on payments, payments received - - into one file and screen for access by each automated enforcement remedy and for display for technicians.
• The ability to view all orders for an obligor on one screen which would display the current support obligation, monthly amount due on arrears and arrears balance for each order.
• Synchronizing income assignments with payment plans so that no harm would come to the obligor by creating an income assignment that did not reflect the amounts on the ledger and payment plan.
• The ability to view all enforcement actions against an obligor on all of his/her court orders on one screen.
• >Automated enforcement based on the philosophy that enforcement should have as its goal the encouragement of regular monthly payments for the long term. Amounts due on arrears must recognize ability to pay and honor payment plans.

The project resulted in the design of the following four key components:

1. Financial Court Case Summary (FCCS) screen and file were designed for use by the automated enforcement programs to apply pay criteria. Each enforcement remedy applies its own pay criteria to the information displayed on this screen. Payments are displayed in "real time" as soon as the central payment-processing unit identifies them to the court order. This screen also ages accounts (30-180 days past due and collection), and provides the various pieces of data sent to the consumer reporting agencies such as terms of payment, current balance, date and amount of last payment, and past-due amount. County users are trained to utilize this screen as the "One-Stop Shop, the 7-11 of Enforcement." Previously, county users had to go to several different areas of the automated system to gather data for enforcement.
2. The creation of functionality at the obligor level which re-structures traditional IV-D finances into a consumer credit presentation including balance due, past due, terms, as well as 30, 60, 90, 120 and 180 day aging amounts. Particularly significant is the creation of a trade line/collection account structure that allows simultaneous reporting of both a trade line portion and, if applicable, a collection account portion for one court order. This structure addresses the unique character of child support obligations that are unlike other credit transactions. For instance, there may be an ongoing monthly obligation payment which is being paid and which, therefore, should be characterized as "current" but arrearages resulting from past non-paying behavior which should be properly characterized as "collection account." Creation of this structure allows Colorado to correctly report both of these facts without duplicate reporting of any balances.
3. MADJAD also addressed the need for system users to see the "big picture" for an obligor. Before the re-design, there was no place in the automated system where all the orders for an obligor could be viewed. Therefore, county users might not have all the information needed to judge the obligor's ability to pay current support and the monthly amount due on the arrearage. Now, every order with a ledger and ledger balance for an obligor is displayed on a screen called the Payment Plan. This screen has a recalculation function that allows the users to establish the monthly amount due on arrears and view the disposable income required to meet the monthly payment due on all orders enforced by Colorado. The amount set by the technician for the monthly amount due on arrears is then displayed on the FCCS screen for enforcement purposes. The Payment Plan screen also connects the user to the income assignment screen any time the monthly support obligation or monthly amount due on arrears is changed. In this way, the income assignment and the payment plan are in sync with one another.
4. The Enforcement Summary Screen lists 13 different enforcement remedies and allows the user to enter the Social Security number of an obligor to view the remedies in place for the particular obligor. By entering the court case identification number, the user can also view the status of the particular court case in each of the listed remedies. From the Enforcement Summary Screen, the user can navigate to the menus or primary screens of enforcement remedies.

Results:

• Automated enforcement remedies using pay criteria operate consistently. Obligors are given credit for payments as soon as the central payment-processing unit identifies the payment to a court order. There is no delay in waiting for payment allocation to the ledger.
• While Colorado continues to refine its Credit Reporting Program, the aging of accounts (30-180 days past due) has generated an increase in obligor response to the enforcement remedy. Accounts that are past due more than 180 days are referred as collection status accounts to the consumer reporting agencies. To clear a collection account, the obligor must pay the collection balance. Based on feedback to the State Enforcement Unit, aging accounts for the purposes of credit reporting is getting results. One of the largest lump sum payments in the State was $55,000; the enforcing county technician cited credit reporting as the impetus for the payment. Each month, 85,200 orders are updated and reported to the credit bureaus.
• Colorado's driver's license suspension program automatically monitors all orders that have been selected for drivers license suspension. In March of 2002, 77,600 orders were being monitored for payment activity. Of these,14,400 orders had begun paying and stayed in compliance as a result of the initial notice; 27,100 orders had begun paying after suspension or threatened suspension; 22,700 orders were in non-compliance (not paying); and 13,400 were paying cases being monitored because the obligor was in non-compliance on other orders.
• Colorado continues to work with technicians throughout the State in setting a reasonable monthly amount due on arrears. The Payment Plan screen is instrumental in allowing technicians to see the "big picture" for the obligor and the amounts he/she is required to pay. The screen encourages county technicians to work together in enforcing multiple orders for the same obligor.
• Now that the technician sets the monthly amount due on arrears in the Payment Plan screen and that amount is simultaneously entered on the Financial Court Case Summary screen for enforcement, the set monthly amount due on arrears is consistent throughout the automated system.
• Linking the payment plan to the income assignment when changing the monthly support obligation or the monthly amount due on arrears has created consistent enforcement and eliminated any inconsistencies between the expected payment on the ledger, payment plan, and income assignment.
• Both the Financial Court Case Summary and Payment Plan screens have added to the "user friendliness" of the automated enforcement programs. The Financial Court Case Summary provides the "One-Stop Shop" for automated enforcement and the Payment Plan provides the "big picture" for all of the obligor's child support obligations.
• Since the Enforcement Summary Screen is the latest addition to the automated system as a result of MADJAD, it is too soon to evaluate its impact.

Location: Statewide in Colorado

Funding: Regular IV-D funding

Replication Advice: Implement changes in stages. The staged implementation allowed the technical team to address any program problems before advancing to the next action. Thorough testing was also critical to smooth implementation.

Stakeholder involvement was essential. Many different sections and units throughout the Colorado Division of Child Support Enforcement were involved in this project. Understanding the business of lenders and the credit community was a large hurdle to clear. Several focus groups were convened so that both Child Support Enforcement and the credit community could find a common language. The input of the county users was invaluable in addressing their needs and in making the re-engineering project user-friendly.

Contacts:

Kathy Stillman, phone (720) 947-5038

Andrea Baugher, phone (720) 947-5040