DCL-02-29, Fiscal Year 2003 Fees for the Federal Offset Program, the FPLS, and the CSENet

DCL-02-29

October 15, 2002

TO: ALL STATE IV-D DIRECTORS

RE: Fiscal Year 2003 Fees for the Federal Offset Program, the Federal Parent Locator Service, and the Child Support Enforcement Network

Dear Colleague:

The Federal Office of Child Support Enforcement (OCSE) is pleased to report that through our partnership with the Department of Treasury's Financial Management Service (FMS), the fees for the Federal Offset Program will remain the same for the upcoming process year. The Tax Offset fee will be $11.65 per offset and the Administrative Offset fee will be $13.20 per offset. These Federal Offset fees will take effect the first day of processing year 2003 (PY03), the period covering January 1, 2003, to December 31, 2003.

For those states for which OCSE issues Pre-Offset Notices (PON), the fee for this service will also remain the same at $ 0.50 per notice for FY2003 (FY03). This fee covers the cost of the envelopes as well as the printing, stuffing, and mailing of the notices. Despite the increase in postage this past June, OCSE is able to maintain these fees through reductions made in overhead costs. These reductions are possible due to further improvements OCSE has made to the automation of the PON process, as well as the continued commitment and cooperation of our partners responsible for the printing and mailing of the notices. The PON fees take effect at the beginning of FY03, the period covering October 1, 2002, to September 30, 2003.

There will be changes to the annual user fees that each state is assessed for usage of the Federal Parent Locator Service (FPLS) and the Child Support Enforcement Network (CSENet) 2000, although the impact will differ from state to state, as is described in more detail below. Enclosed are summaries of your state's FPLS and CSENet fees for FY03. The user fees for these systems cover only a portion of the costs of operating and maintaining the FPLS and CSENet. The amount of data sent to states from the FPLS to establish and enforce child support increases every year, and the corresponding annual increase in collections demonstrates that states are achieving substantial results with this data. In addition, CSENet's frame relay network technology has improved the speed and reliability of interstate communications and there have been corresponding increases in network traffic every year. As the demand on these systems increases and our technical support and data quality efforts keep pace, the day-to-day operational costs of the FPLS program rise. Therefore, it is necessary to increase the FY03 quarterly fee amount to assist in offsetting the rise in program costs.

Under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), OCSE is authorized to recover costs incurred in furnishing information, at rates determined by the Secretary to be reasonable. For FY03, we will continue to charge a flat access fee as well as a variable fee based on each state's IV-D caseload average for the most recent six-year period for which final data is available as reported on the OCSE-157 report. The flat fee for the FPLS will increase from $2,500 to $3,750 per quarter per state.

For CSENet, the flat fee will increase from $3,750 to $5,625 per quarter per state. The change in your state's variable fee will depend on the change in your six-year caseload average. Please keep in mind that the CSENet fee is an administrative expense for which you are eligible to receive Federal reimbursement at a rate of 66%. This fee structure will allow for unlimited use of all FPLS and CSENet services and will ensure that all states pay a minimum portion of the costs of these systems, while also factoring in their proportional use of these systems.

The FPLS and CSENet user fees will be assessed beginning FY03. User fees are to be paid on a quarterly basis in equal installments. Each state is to report its FPLS fee charge-back on line 11 of Form OCSE-396A. Fees that are not paid in a timely manner will be deducted from that state's quarterly grant.

You will continue to receive your CSENet fee on a consolidated bill. Each state is to report its CSENet fee charge-back on line 12 of Form OCSE-396A. Unpaid fees will automatically be deducted from the appropriate state's grant award for the quarter.

If you have any questions regarding Federal Offset fees, please contact Roy Nix at (202) 401-5685 or via email at rnix@acf.hhs.gov. If you have any questions regarding FPLS fees, please contact Tony Hardy at (202) 401-9231 or via email at thardy@acf.hhs.gov. If you have any questions regarding CSENet fees, please contact Helen Smith at (202) 690-6639 or via email at hsmith@acf.hhs.gov.

Thank you for your continued efforts on behalf of our nation's children.

Sincerely,

Sherri Z. Heller, Ed.D.

Commissioner

Office of Child Support Enforcement

Enclosures

cc: Regional Program Managers (w/o Attachment)
ACF Regional Administrators (w/o Attachment)