EXECUTIVE SUMMARY:

The objectives of our review were to determine whether the Department of Social Services (State agency) appropriately reported program income for (1) undistributable child support collections that met the State’s definition of abandoned property and (2) interest earned on program funds.  We found that the State agency did not always report program income for (1) undistributable child support collections that met the State’s definition of abandoned property or (2) interest earned on program funds.  The State agency did not always report program income because in certain circumstances it either (1) had inadequate policies and procedures or (2) did not follow its policies and procedures.  As a result, for the period October 1, 1998, through September 30, 2005, the State agency did not recognize and report program income totaling an estimated $692,618 ($457,128 Federal share).

We recommended that the State agency:  (1) report on the quarterly Federal financial report (form OCSE-396A) $361,439 ($238,550 Federal share) in Title IV-D program income that has been transferred to the State Treasurer as abandoned property; (2)  report $331,179 ($218,578 Federal share) in Title IV-D program income on form OCSE-396A after it: works with St. Louis city officials from the County Circuit Clerk’s office to close the open bank account and transfer the undistributable child support collections and interest income to the State Treasurer, and transfers the $74,702 ($49,303 Federal share) of Title IV-D undistributable child support collections within the MACSS to the State Treasurer as abandoned property; (3) work with OCSE to review the other 111 County Circuit Clerk offices and determine whether they have appropriately declared and transferred to the State Treasurer any remaining undistributable child support collections and interest income; (4) report any remaining undistributable child support collections and interest income from the other 111 County Circuit Clerk offices as program income on form OCSE-396A; (5) revise its policies and procedures to ensure that undistributable child support collections are considered abandoned within 3 years from the date the collections could have been claimed by the owner; and (6) provide training to personnel responsible for preparing the quarterly Federal financial report forms OCSE-34A and OCSE-396A to ensure that the forms are completed appropriately.  The State agency agreed with all of our audit findings and recommendations.  The State agency comments are included in their entirety as Appendix B.