AT-07-08, Implementation of Revised Financial Reporting Forms: Form OCSE-396A and Form OCSE-34A

ACTION TRANSMITTAL

AT-07-08

ATTACHMENT:Form OCSE-396A, Parts 1 and 2 (MSWord, File Size: 80Kb)
Instructions for Form OCSE-396A (MSWord, File Size: 140Kb)
Form OCSE-34A, Parts 1 and 2 (MSWord, File Size: 81KB)
Instructions for Form OCSE-34A (MSWord, File Size: 158KB)

DATE: November 27, 2007

TO: STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS APPROVED UNDER TITLE IV D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS

SUBJECT: Implementation of Revised Financial Reporting Forms: Form OCSE-396A and Form OCSE-34A.

BACKGROUND: OCSE requires each State to submit quarterly reports of expenditures, quarterly reports of collections and semiannual budget projections.

The information requirements for these documents change periodically as Federal statute and regulations are amended. In addition, the Office of Management and Budget (OMB) requires that these forms be reviewed at least once every three years to assure that the information being requested is in accordance with current requirements. As part of this review process, OCSE solicits and reviews comments, ideas and suggestions for improvements submitted by Federal and State IV-D staffs and from any other individuals or groups with an interest in this program.

The revised versions of these forms were developed through this process and, following its review, OMB has now approved these forms.

PURPOSE: With this Action Transmittal, OCSE will implement revised versions (designated as the 10/1/2007 versions) of the following financial reporting forms:

Form OCSE-396A: "Child Support Enforcement Program Expenditure Report"
Form OCSE-34A: "Child Support Enforcement Program Collection Report"

These forms replace the 10/1/2003 versions of the same forms.

REVISIONS: The following revisions are included in these forms:

Form OCSE-396A, Part 1

New Title, "Child Support Enforcement Program Expenditure Report," formerly, "Child Support Enforcement Program Financial Report"
Added Line 1a, "Administrative Costs Using Funds Received as Incentive Payments" Necessary to conform with revisions to the Social Security Act made in accordance with the Deficit Reduction Act of 2005. A Federal share of funding is no longer available for expenditures made using funds received by the State as its annual incentive payment.
Added Line 8, "Estimated Incentive Payments" (Relocated from Form OCSE-34A) The annual incentive payments are no longer funded from the Federal share of child support collections, as they had been for many years. This revision recognizes that change and coordinates payment of estimated quarterly incentive payments with estimated quarterly expenditures.
Added Line 9, "Federal Share of IV-A Collections" Previously designated as "Quarterly Grant Adjustment" and combined with incentive estimates, now reported separately.
Opened Cols B and D, Lines 1b, 1c, 2a, 2b. These amounts are reported in the Federal Share columns of this report that were previously shaded with no entries allowed. With a single FFP rate for all program costs, this amount is now easier to calculate.
Deleted Line 8, "Laboratory Paternity Costs (at 90% FFP)" Federal funding at the 90 percent FFP rate was eliminated under the Deficit Reduction Act of 2005. Laboratory costs are now reported as a routine administrative cost (at the 66 percent FFP rate) on Line 1b.
Deleted Line 10, "Quarterly Grant Adjustment" (See item 4, above.)
Renumbered Lines 1b and 1c (formerly 1a and 1b), Line 7 (formerly Line 9), and Lines 9 through 15 (formerly Lines 10 through 16).
Revised Identifying Dates: "Current (Claiming) Quarter Ended," Next (Estimating) Quarter Ended" for added clarity.

Form OCSE-396A, Part 2

Revised title of Column E, to include "Federal Audit Number." The inclusion solely of a State or other audit identifier did not allow easy crosschecking of a reported audit adjustment.
Funding category codes and line number references revised. The 3-letter funding category codes and accompanying line number references were revised for lines 1a, 1b and 1c to accommodate the changes discussed above.

Form OCSE-396A, Part 3

Part 3, "Semiannual Budget Projections" has been deleted in its entirety and is no longer required.

Form OCSE-34A, Part 1

Redesignated as "Part 1." Previously not necessary as a 1-page report
Added Line 2g, "From Other Countries" To accommodate child support collections received from other countries under the terms of international agreements.
Added Line 4, "Collections Sent During the Quarter Outside the Reporting State's IV-D Program." To identify all collections received but not distributed by the reporting State.
Added Line 4c, "Collections Sent to Other Countries." To accommodate child support collections sent to other countries under the terms of international agreements.
Added Line 5, "(Reserved)" For future use.
Added Line 7a, "Passed Through" Necessary to conform with revisions to the Social Security Act made in accordance with the Deficit Reduction Act of 2005. The State may elect to "pass through" some or all of the amount collected on behalf of a family that is a current or former recipient of assistance under title IV-A.
Added Line 7e, "Fees Retained by State" Necessary to conform to revisions to the Social Security Act in accordance with the Deficit Reduction Act of 2005. This line will be used only for reporting the mandatory annual $25 fee (or portion of the fee) that the State withholds from the child support collection.
Renumbered Line 2h (formerly Line 2g), Lines 4a, 4b, (formerly Lines 4, 5), Lines 7b, 7c, 7d (formerly Lines 7a, 7b, 7c), Line 11 (formerly Line 13).
Relocated Lines 9c, 9d. Now, Lines 2 and 8 of Part 2 of this form
Relocated Line 11. Now, Line 8, Form OCSE-396A, Part 1.
Deleted Line 12, "Quarterly Grant Adjustment" Redesignated as "Federal Share of IV-A Collections" on Line 9 of Form OCSE-396A.

Form OCSE-34A, Part 2

New Section, Part 2, "Itemized Undistributed Collections." Previously designated as a separate reporting form, "Schedule UDC." Schedule UDC has been eliminated as a separate form.
Added Line 1, "Net Undistributed Collections" Amount carried from Line 9b of Part 1.
Renumbered Line 1 (formerly Line 13 on Schedule UDC and Lines 2 through 13 (formerly Lines 1 through 12 on Schedule UDC)

EFFECTIVE DATE: The use of these revised Forms OCSE-34A and OCSE-396A is required beginning with fiscal year 2008, i.e., for all collections received, distributed and disbursed and for all expenditures made on or after October 1, 2007, with the first submission of these forms, for the first quarter of FY 2008, due by January 30, 2008.

States may continue to use the earlier versions of these forms to submit its reports for the 4th quarter of FY 2007, due by October 30, 2007, and for any revised reports for FY 2007, due no later than December 30, 2007.

Note other exceptions to the effective date below.

EXCEPTIONS: The Deficit Reduction Act of 2005 included several amendments to the Social Security Act that affect the financial reporting on these forms. These changes become effective on a phased-in schedule:

Effective FY 2007 (October 2006):

Mandatory annual $25 fee. This fee is required to be paid on all cases where the amount of child support collected by the State for any individual case totals at least $500 during the course of a year. The State may choose to collect the fee from either parent, withhold it from the collection or pay it itself. All fees, regardless how paid, are reported as program income on existing Line 2a on Part 1 of Form OCSE-396A. Any fee (or portion of fee) that the State withholds from a child support collection is also reported on new Line 7e on Part 1 of Form OCSE-34A.
Reduced FFP for Laboratory Costs. These expenditures were previously reported on Line 8 of Part 1 of Form OCSE-396A. Under Sec 1132 of the Social Security Act, States may claim Federal funding for a period of two years from the date of the expenditure. Therefore, expenditures made during FY 2006 (on or before September 30, 2006) and not previously reported may still be reported during FY 2008 and will still be eligible for Federal funding at the previous 90 percent FFP rate.

Since Line 8 has been eliminated, these prior quarter adjustments must be reported on Line 1b, Column C of Part 1 of Form OCSE-396A, calculating the Federal share in Column D using the 90 percent rate. These adjustments must also be reported on Part 2, identified as the "LAB" funding category.

No prior quarter adjustments for laboratory costs reported on or after October 1, 2008 will be eligible for Federal funding at the 90 percent FFP rate. All expenditures for laboratory costs made on or after October 1, 2006 are eligible for Federal funding as routine administrative costs at the 66 percent FFP rate

Effective FY 2008 (October 2007):

Eliminated Federal share for expenditures made using funds from incentive payments. Previously, incentive funds were spent on the IV-D program and claimed as the State share of administrative expenditures. Additional Federal funds were provided to maintain the 66 percent Federal funding rate. With additional Federal funds no longer available, these expenditures must now be identified and reported separately on new Line 1a of Part 1 of Form OCSE-396A. This is effective for all expenditures using incentive funds made on or after October 1, 2007; the date the incentive payment was earned or received has no bearing on this reporting requirement.

Collection Pass Through. States may elect to pass through some or all of collections received on behalf of current or former recipients of assistance under title IV-A. These amounts will be disbursed directly to the families and not be considered when calculating the Federal and State shares of child support collections. Accordingly, these amounts must be identified separately and Line 7a has been added to Part 1 of Form OCSE-34A for this purpose. Any amount reported on this new line will be considered "distributed" child support collections for incentive payment calculations and other purposes.

Note: This provision is effective for any collection distributed and disbursed on or after October 1, 2008. For the submissions of Form OCSE-34A for the four fiscal quarters of FY 2008 (October 1, 2007-September 30, 2008), Line 7a must remain blank.
International Collections. Although not part of the Deficit Reduction Act of 2005, international agreements will permit States to request assistance from and provide assistance to certain foreign governments in the collection of child support payments. Lines 2g and 4c have been added to Part 1 of Form OCSE-34A for this purpose.
Note: This provision is effective for any collection received as the "initiating" State or sent abroad as the "responding" State under these agreements on or after October 1, 2008. For the submissions of Form OCSE-34A for the four fiscal quarters of FY 2008 (October 1, 2007-September 30, 2008), Line 2g and 4c may remain blank. However, any State that already has a similar functioning agreement with one or more foreign countries or political subdivisions should use these lines to report those collections.

SUBMITTAL SCHEDULE: Forms OCSE-396A, Parts 1 and 2 and OCSE-34A, Parts 1 and 2 are due quarterly and must be received within 30 days of the end of each fiscal quarter.

The Administration for Children and Families operates and maintains an On-Line Data Collection (OLDC) system available to every State to submit this information electronically. Although not required, each State is strongly encouraged to use the OLDC system, which requires pre-registration and the use of an approved digital signature.

If a State elects to submit data electronically, the preparation and submittal of a paper copy is not required. Regardless of the submission methodology, all deadlines and other requirements remain applicable.

SUPERSEDED MATERIAL: In accordance with the information in the "Effective Date" section, above, with the implementation of the 10/1/2007 versions of these forms, States should not use the previous, 10/1/2003 versions of these forms to report data for FY 2008 and thereafter.

Accordingly, Action Transmittal OCSE-AT-03-04, dated September 26, 2003, which implemented the earlier versions, is superseded by this Action Transmittal.

RELATED MATERIAL: Action Transmittal OCSE-AT-05-09, dated September 6, 2005, pertains to reporting on Form OCSE-157, the "Child Support Enforcement Annual Data Report," which is used in conjunction with the financial reporting forms:

ATTACHMENTS:

Form OCSE-396A, Parts 1 and 2
Instructions for Form OCSE-396A
Form OCSE-34A, Parts 1 and 2
Instructions for Form OCSE-34A

INQUIRIES: Inquiries should be made to the appropriate ACF Regional Child Support Enforcement Program Manager.

Margot Bean
Commissioner
Office of Child Support Enforcement