Legislative Analyst's Office, January 27, 2000
the Legislative Reforms of 1999
1999, the California Legislature passed, and the Governor signed, a
of bills which made significant changes to the organization,
and funding of the state’s child support enforcement
Generally, these reforms significantly increased state authority
oversight over the program, and changed state administrative responsibility
for developing the statewide child support automation system.
the more significant changes are the creation of a new state
of Child Support Services (DCSS); the transfer of local administration
from the county district attorneys to separate county child
agencies; and the transfer of responsibility for procurement of
automation system from the state Health and Human Services Data
(HHSDC) to the Franchise Tax Board (FTB).
findings and recommendations include the following:
funds (either new or existing) to county agencies based
their relative levels of cost-effectiveness, as measured by
collections resulting from increased administrative expenditures.
should be taken to (1) meet federal certification requirements
first and foremost, (2) minimize additional major changes
the child support program, (3) streamline the procurement process,
and (4) ensure more efficient control agency oversight.
provide strong leadership and sponsorship to the new automation
project and (2) define its policies and practices before
with the new automation system. The FTB, acting as DCSS’
agent for the procurement and development of the new
should (1) employ good project management and contract
administration practices and (2) ensure that the procurement
is focused on the business needs of DCSS and the counties.
primary purpose of California’s child support enforcement program is to collect,
from absent parents, support payments for custodial parents and their children.
Child support offices in the state’s 58 counties provide services such as locating
absent parents; establishing paternity; obtaining, enforcing, and modifying
child support orders; and collecting and distributing payments. Federal law
requires states to provide these services to all custodial parents receiving
Temporary Assistance for Needy Families (TANF, which is the California Work
Opportunity and Responsibility to Kids [CalWORKs] program in California)
on request, to non-TANF parents. Child support payments collected on behalf
of TANF families historically have been used primarily to offset the federal,
state, and county costs of TANF grants. Collections made on behalf of non-TANF
parents are distributed directly to these parents.
to recent legislative reforms in California, the program was administered at
the local level by the county district attorneys (DAs), with state oversight
by the Department of Social Services (DSS). The counties were authorized to
refer certain delinquent cases to the (FTB) for collection.
PROVISIONS OF THE LEGISLATIVE REFORM PACKAGE
we discuss the major provisions of the legislative reforms, which are summarized
in Figure 1.
Provisions of the Child Support Reforms of 1999
As of January 2000, state-level administration
oversight of the child support enforcement program was transferred
from the Department
of Social Services to the new Department of Child Support Services.
At the local level, administrative
responsibility will be shifted from the county district attorneys
for determining program expenditure levels and how funds will be
among the local agencies will shift from the counties to the state.
Local agency failure
to comply with performance plans could lead to state assumption of
System. Establishes new
for counties, subject to availability of funding.
the approach was county based.
Tax Board (FTB). Previously,
Data Center was responsible for procurement.
Statewide Automa tion
System. The procurement
vendor’s ability to meet preagreed upon program performance levels.
State. The state
responsible for determining changes and enhancements to county-based
will describe the governance structure, roles and responsibilities,
and the management
for the single statewide system.
rather than counties, will be responsible for the federal financial
not meeting deadlines for the statewide system.
will cover a broader range of cases.
an effort to improve child support collection performance, the Legislature
passed a reform package of bills in 1999, including Chapter 478 (AB 196, Kuehl),
Chapter 479 (AB 150, Aroner), and Chapter 480 (SB 542, Burton and Schiff).
Together, these acts overhaul the organization, administration, and funding
of the program. Below we describe these changes, which generally are intended
to achieve more uniformity in service delivery and better performance in the
program. We address the creation of a statewide automation system--the subject
of Chapter 479--separately in the final section of this report.
of New State Department and New Local Agencies. As
a newly created
the new department,
the local level, child support operations in California’s 58 counties will
be transferred over the next three years from each DA’s office to a newly
created county agency. These local child support agencies will continue to
refer all cases requiring criminal enforcement to the DA. The legislative
reform package expands the role of the FTB
in its delinquency collection program, as described later in this report.
State Leadership and Increased Accountability. Pursuant
with the approval
will be responsible
new DCSS is charged with a number of significant tasks over the next several
years. It is required to:
of local agencies
DAs to the
addition to the new director and deputy directors, a number of new positions
will be created for regional administrators who will work with counties
on performance and compliance. The number of regional administrators will
be determined in the state budget, based on caseload. The regional administrators
Agency Governance. Prior to
to the new
or her staff
and to retain child support expertise during and after the transition process,
all child support employees working in the DAs’ offices (other than the director)
may choose to transfer to the new local agencies and will retain employment
status and salary.
Improvement Process and State Intervention. The
when a local
in the daily
phases are as follows:
its ability to comply and perform at an adequate level.
DCSS Legislative Reporting Requirements .
478 and Chapter 480 require the Director of DCSS to submit status reports to
the Legislature periodically. Beginning July 1, 2001 and semiannually thereafter,
the director will submit written reports to the Legislature on the status of
the child support enforcement program. In addition, the director is required
to submit quarterly reports on the progress of all local child support agencies
in each performance measure, including the identification of the local child
support agencies that are out of compliance, the performance measures each has
failed to satisfy, and the performance plan that is adopted for each.
DAs During the Transition .
of the DAs
the new local
DCSS finds that
or all of
to provide appropriate
the local agency
the DAs for
Schedule for Local Agencies. The
from the DAs
new county department
by January 2001
if the county
determining the order of county transitions, the Director of DCSS will consider
county performance and the impact of potential service delivery disruptions.
Local child support agencies representing at least 50 percent of the statewide
caseload are to be transferred annually from the DAs’ offices beginning in January
2001. The transfer process is to be completed by January 1, 2003.
FTB CHILD SUPPORT COLLECTIONS PROGRAM
History. In 1993,
began a pilot
Two years later,
FTB is responsible
or more. At
of the county
may also collect
days or more
as current support
cases, and all
a county can
case back from
has been completed.
FTB’s role is to locate assets and collect owed amounts. It does this by issuing
a levy against bank accounts, wages, or other income, or seizing both real and
personal property. Most often if the delinquency is collected, it is done through
bank account and wage levies. However, only about 6 percent of all cases referred
to the FTB are collected. For 1998-99 the FTB collected almost $68 million in
child support delinquent payments from an inventory of over 526,000 cases.
Program. Chapter 480 and
responsibilities for child support collections. Under the new program, the FTB
will receive all cases where delinquent payments exceed $100 and are more than
60 days in arrears. This is expected to double the FTB’s caseload to approximately
one million cases. The FTB will have a three-year time period (ending December
31, 2002) in which to phase in the additional caseload.
legislation also directs FTB to design a computerized database to centralize
information regarding each case and establish a customer information center.
Further, the FTB is directed to contract with third parties, where necessary,
to locate debtors and debtor assets. Finally, the legislation provides that
if a debtor has both a child support delinquency and a personal income tax delinquency,
the FTB is to collect the child support delinquency first.
Automation System. Chapter 479
from the Health
to the FTB.
this in the
Fiscal Structure. Prior to
money to spend
on child support
and state governments.
additional state incentive payments. These combined incentive payments were
used by counties to support their share of program costs and were sufficient
to cover almost all county costs in recent years.
one of the major fiscal effects of child support collection efforts has been
the reduction of welfare grant expenditures. This is because child support payments,
less $50 monthly, that are collected on behalf of CalWORKs families have been
used to offset the public costs of CalWORKs grants. (The first $50 of monthly
payments is distributed directly to the family.) The CalWORKs grant savings
have been shared by the federal, state, and county governments in proportion
to their expenditures on grant payments, with approximately 51 percent of savings
returned to the federal government. Of the nonfederal portion, 95 percent is
returned to the General Fund and 5 percent is returned to the counties. Child
support collections have also resulted in savings in the foster care program.
The budget estimates $593 million in CalWORKs and foster care savings ($306 million
federal, $257 mil-lion state, and $30 million to counties) in 1999-00.
major fiscal effect of the child support program is its impact on the CalWORKs
caseload. To the extent that child support payments collected on behalf of non-CalWORKs
families have kept these families from going on public assistance, they have
resulted in CalWORKs grant avoidance savings. These savings are difficult to
measure and we do not have an estimate.
Changes in Current-Year Funding. The
legislative reform package (Chapter 478, Chapter 479, and Chapter 480) and the
human services trailer bill to the 1999-00
Budget Act--Chapter 147,
Statutes of 1999 (AB 1111, Aroner)--made significant changes to the budgeting
practices of the child support program. Prior to the passage of these laws,
local child support budgets were neither reviewed nor approved at the state
level. Counties determined expenditures at the local level and paid most of
these costs with federal reimbursements and federal and state incentive funds.
Pursuant to the legislative reform package, however, the responsibility for
determining the program expenditure levels (including the allocation of funds
among the local entities) moves from the counties to the state.
state will also determine how funds will be allocated among the local agencies.
Specifically, under the new legislation, the state will continue to allocate
the federal and state incentive payments to the local agencies, but the department
is revising the method of distributing these funds. The legislation limits the
combined total of incentive payments to 13.6 percent of collections, which is
equal to the amount included in the 1999-00
Prior to the reforms, incentives paid to the counties were calculated as
a flat percentage of collections (with the percentage varying by county according
to performance on certain measures).
to Chapter 147, state incentive payments will now be used first to fund “reasonable”
county administrative costs. Rather than receiving funds according to an incentive
payment formula, however, counties will submit budget requests to DCSS. Counties
may also apply for State Investment Funds (SIF). The SIF, reenacted in the child
support reform package, allows for up to $20 mil-lion from the General Fund
and additional federal matching funds to be used by counties to implement new
or enhanced processes that directly increase child support collections. Under
certain circumstances, a county is required to repay these funds to the state,
depending on performance in collections. The reform package extends the time
a county has to repay SIF and requires DCSS to report on the program by June
State Incentive System. Any
after the regular
will be awarded
to ten counties
two areas. In
area, up to
based on collections
and former welfare
the second area,
based on the
one year to
use the payments
the reform package creates an additional incentive system component under which
counties will be encouraged, but not required, to reinvest in the child support
program. These funds will be appropriated annually through the budget process.
Under this incentive program, the counties with the ten highest welfare and
former welfare collections per case will receive an amount equal to 5 percent
of their collections in these areas.
PROCESS NEEDS CLARIFICATION
indicated above, the department has the responsibility to review and approve
local agency budgets. In addition, current law requires that state funds appropriated
for the program shall first be
used to fund local administrative costs, which shall be limited to “reasonable
amounts in relation to the scope of services and the total funds available.”
If the total allowable amount claimed by the local agencies exceeds
the budget act appropriation, the allocations shall be reduced by a prorated
amount. If the local costs are less than
the appropriation, the remainder can be allocated for the newly-established
“Reasonable Amounts” Provision Govern Budget Approval Process?
is some question whether the reasonable amounts provision is intended to govern
only the reimbursement of costs claimed by the local agencies, or whether it
should also apply to the department’s process of approving the budgets submitted
by the local agencies. For purposes of allocating funds to the counties in the
current year, the department has defined reasonable amounts as costs eligible
for federal reimbursement, but has also linked the reasonable amounts provision
to the budget approval process. Specifically, the department is approving all
county budget requests (to the extent permitted by the budget act appropriation)
that meet the reasonable amounts definition. Staff in the department, moreover,
indicate that the department’s ability to disapprove
a local agency budget proposal would depend on how reasonable amounts is
believe that applying this provision to the budget approval process is unnecessarily
restrictive in that it could preclude the state from exercising control over
the allocation of funds among the local agencies. Without redefining what is
“reasonable,” the department would essentially be locked into approving the
local agency budgets, and
would not have discretion, for example, to reallocate funds from less efficient
counties to more efficient counties (as we later recommend in this report),
even when such a reallocation is likely to increase total child support collections.
our view, the reasonable amounts provision was not intended to govern the budget
approval process. To do so would be inconsistent with one of the basic premises
of the legislative reforms-- that responsibility for the program is transferred
from the counties to the state. Consequently, we recommend that this issue be
addressed during budget hearings in order to clarify legislative intent and,
if necessary, that legislation be enacted to specify that the reasonable amounts
provision applies to the reimbursement of costs and is not intended to place
constraints on the department in carrying out its responsibilities to approve
local agency budget proposals.
CAN PROGRAM PERFORMANCE BE IMPROVED?
Research Suggests Program Underinvestment
previous analyses, we have shown that the principal goal of the program--the
collection of child support--is strongly related to the amount of fiscal resources
committed to the program (administrative expenditures). It does not necessarily
follow, however, that increasing program spending (and the resulting increase
in collections) will be cost-effective to government. This will depend, in large
part, on how much it costs to achieve the additional collections. In addressing
this question, we found that (1) the counties vary significantly in their levels
of cost-effectiveness, as measured by the ratio of collections to costs, and
(2) it is likely that
an increase in expenditures in many of the counties would yield not only an
increase in collections, but net savings to the state due to the welfare grant
reductions that result from collections on behalf of these families.
also found that the funding structure of the program--whereby the counties ultimately
determined expenditure levels--tended to result in an “underinvestment” of resources
in the program. This is primarily because (1) in many cases, counties did not
benefit fiscally from the program and therefore had no fiscal incentive to increase
spending even when such spending would benefit the state, or (2) in other cases,
counties probably would benefit but, without having any assurance of such an
outcome, did not want to risk an increase in spending. (For more detail on these
findings, please see The 1992-93
Issues and our April 1999 report
entitled The Child
Create New Opportunity
the new reforms, control over spending will shift to the state, creating an
opportunity to allocate resources so as to increase both collections and state
savings. To achieve this, additional spending should occur in those counties,
or local program sites, where there
is reason to believe that the resulting increase in collections will be sufficient
to yield a net savings to the state. We note that such an investment could be
accomplished by a reallocation of funding resources among the counties and/or
a net augmentation to the program.
of the source of funds (reallocation or net augmentation), the state is still
faced with the question of how best to allocate program funding among the
local jurisdictions. One way to allocate the funds is based on the relative
efficiency of counties as measured by their collections to costs ratio. To
illustrate this approach, Figure 2 presents two hypothetical examples of counties
with different, but generally representative, levels of cost-effectiveness
in collecting child support, as measured by their ratios of marginal collections
to marginal costs (that is, the increase in collections that accompany an
increase in administrative costs).
State Costs (Savings) From $1 Increase in Spending
Two Marginal Collections/Costs a
County A: Collections/Cost Ratio = $3/$1
state costs (savings)
County B: Collections/Costs Ratio = $1/$1
state costs (savings)
Ratio of increase in total collections (net of
$50 disregard payments) to increase in total administrative
Assumes reduced federal reimbursement
due to automation penalties.
the figure, County A is a relatively cost-effective county which collects an
additional $3 in child support for every additional $1 spent in administering
the program. County B represents a relatively inefficient county which collects
an additional $1 for every $1 expended. The figure shows that after accounting
for federal reimbursements, CalWORKs grant savings, and federal incentive payments,
a $1 increase in spending in County A would yield a state savings (12 cents),
whereas a $1 increase in spending in County B would result in a net state/county
cost (29 cents).
one option would be to reallocate funds from County B to County A. We note,
however, that at some point this option could result in significant program
disruptions to County B (which, while relatively inefficient, is still providing
some programmatic benefits through its efforts), depending on the amount of
second option would be to augment the program, with the increase limited to
those counties that hold the most promise of using the funds cost-effectively
(such as County A in our example). In this respect, we note that county cost-effectiveness
can be a relatively dynamic phenomenon. In other words, we would expect it to
change over time. Furthermore, historical data are only an indication of what
might happen in the future and no guarantee.
reviewing the historical data on marginal collections and costs among the counties,
we believe it would be reasonable to pursue both options (reallocation and augmentation).
More specifically, we recommend that the allocation of funds among the counties
take into account the counties’ cost-effectiveness, as measured by historical
increases in collections resulting from increases in administrative expenditures.
Given the need for program stability, however, we suggest that any reallocation
among the counties be relatively small and gradual--for example, up to 10 percent
annually. With respect to the budget for 2000-01, we note that we will review
the Governor’s proposal for the program in our Analysis
Automation Effort Unsuccessful. The
to provide a
and the expenditure
than $100 million,
state terminated its contract with the SACSS vendor and canceled the project
in late 1997. As a consequence of failing to implement a statewide system as
required by federal law, the state began incurring federal financial penalties
Approach Adopted in 1998. After
the failure of SACSS, the Legislature established a county based, rather than
statewide, approach for California’s child support automation
in the 1998-99 Budget
Act and in Chapter 329, Statutes
of 1998 (AB 2779, Aroner). Under this approach, the HHSDC was required to deploy
a Statewide Case Registry (SCR) and Statewide Distribution Unit (SDU) which
would enable the transmission of data and child support monies across county
lines in compliance with the federal welfare reform laws.
required each county to choose one of four possible systems, recommended by
HHSDC. In addition, the measure specified that the four systems had to be year
2000 (Y2K) compliant and meet certain federal requirements. In November 1998,
HHSDC announced its selection of four systems from which the counties could
Government Rejects Approach. As
Chapter 329, the
the new automation
Health and Human
1999. In April
denied the consortium
develop a single
with the overall
the form of
NEW APPROACH: CHAPTER 479
provides specific legislative direction for three major components of California’s
new child support enforcement system: (1) the single statewide automated system,
(2) the roles and responsibilities of the state and the counties, and (3) the
funding and penalty allocations resulting from the failed SACCS Project.
Statewide Automation System. The
defined by Chapter 479
a single statewide
also requires that the statewide system consist of a county case management
function, the SCR and the SDU, and interfaces with other state systems that
are necessary to perform the child support services functions. From a technology
standpoint, the single statewide system will be based on solutions that can
be implemented by multiple vendors and, as technology evolves, can be easily
enhanced or modernized.
Moves to FTB. An important
under Chapter 479
HHSDC to FTB.
will act as
system. Chapter 479
for its various
tax automation projects be utilized when implementing the statewide child
support automation system.
Charter Required. Chapter 479
of a “project
by Chapter 479
project charter must be approved by FTB’s Executive Officer, DCSS’s Director,
and the Secretary of California’s Health and Human Services Agency prior
to the commencement of the project’s procurement phase.
Procurement Approach. Chapter 479
legislation also mandates that the State Auditor monitor the procurement’s evaluation
and selection processes, and then certify that those processes were conducted
as specified in the bid document.
Protest Process. Another important
in Chapter 479
during the project’s
some of the
Terms. The legislation
area of the
used to describe
state. Chapter 479
the risk for
of the project
The Legislature requires that the contractor’s payment schedule be based on
the delivery of program business functions implemented in a succession of
phases. Those payments must be based on achieving some type of predefined
performance measures specified in the contract and the project charter.
equally important provision of this legislation is the ability of the state
to enter into a contract with the winning vendor regardless of the status of
any pending protests. Once the intent to award a contract is issued, the state
and the winning vendor can enter into a contract based on the contract’s terms
and conditions. This new legislative direction provides a mechanism for the
state to begin work immediately, and not have to wait the usual four months
or longer for protest resolution.
Requirements. Chapter 479 requires
a biannual basis
status of the
written or verbal,
the status of
the annual budget
will be required
on the status
on the approved
Frames Not Specified. The
as to the
the new statewide
and Responsibilities of State and Counties. Chapter 479
state. Chapter 479
in those AACAs.
a loss of
legislation also requires that the state assume a more active role in overseeing
the maintenance and operation of the interim systems (that is, those systems
that the counties must operate before the new statewide system is operational).
This responsibility was assigned to DCSS, in conjunction with HHSDC.
and Funding Allocations. Chapter 479
Chapter 479 provides
of the new
of the new
activities necessary to ensure their continued operation.
Penalties. Chapter 479
For the current
$96 million to
penalty. Chapter 479
used at that
based on criteria
augmentation, Chapter 479
1999 and thereafter
General Fund. It then allows the administration to recapture those incentive
funds that the counties have not spent or encumbered.
Under Chapter 479,
the state may reduce county administrative funds if the county does not comply
with certain state requirements. Specifically, the state may reduce funding
when the county does not (1) receive approval of its AACA, (2) meet activities
and dates specified in its AACA’s work plan, (3) address Y2K remediation activities,
or (4) resolve certain federal requirements.
major issues confront the state on the child support automation effort. First,
there is the need to minimize the federal penalties as quickly as possible.
Second, the state must avoid the mistakes made in previous automation efforts.
Figure 3 summarizes our findings and recommendations on these two issues.
State Minimize the Federal Penalties?
efforts to meet federal requirements, minimize county
scope and requirement changes.
that contract can be modified.
more efficient control agency oversight.
State Avoid Past Mistakes?
strong program leadership and sponsorship.
the program first, automate second.
good project management practices.
oversight into account when considering schedules and costs.
the procurement on the business requirements.
and contractors should share the risks.
proper contract administration.
Can the State Minimize the Federal Penalties?
Penalties Result in Loss of Significant Federal Funding. California’s
share of total
about $100 million,
the statewide automation project meets federal requirements, additional penalties
will be assessed annually. For FFY 2001 through 2003, these penalties will
be 25 percent, 30 percent, and 30 percent reductions, respectively, of total
administrative reimbursements by the federal government. The Governor’s budget
the penalty will be $102 million in 2000-01 and proposes General Fund support
to replace these funds.
we offer several steps that the state can take to minimize the federal penalties.
Efforts to Meet Federal Requirements, Minimize County Customization.
First, the emphasis
on meeting the
to the termination
imposed on California.
of the new
to meet the
the emphasis must be on meeting the state’s
business requirements for the child support enforcement program. In this
regard, the legislation envisions a statewide
system that provides services to clients in a consistent and uniform manner.
In general, this will require the establishment of statewide uniform business
all counties to follow. In order to achieve this, we recommend that customization
to meet individualized local needs be minimized or deferred to ensure statewide
consistency and therefore relief from the federal penalties. We recognize that
some limited county customization may
be appropriate, as long as such customization is consistent with statewide needs
and requirements and does not divert valuable resources from system development
Scope and Requirement Changes. For
an automation effort to be successful in meeting estimated costs and time frames,
it must experience minimal changes to its scope and requirements. This is particularly
critical for the child support automation project in which the federal penalties
continue to increase each year. Changes to the project scope will occur when
new mandates are introduced and modifications are necessary to meet those mandates.
Every new mandate that the Legislature passes and the Governor signs, will have
some impact on the cost and schedule of the new system. In an effort to eliminate
the federal penalties, we recommend that legislative and executive changes to
the child support program be minimized during the next three years, except those
that are necessary for cost-effectiveness and efficiency in an effort to ensure
timely implementation of the new statewide system.
Procurement Process. State procurements
year to complete.
from the federal
state, we believe
to shorten the procurement process in order to bring automation systems on-line
sooner. Additionally, a shorter procurement cycle would ensure continued participation
and interest by the vendor community.
believe that there are at least two ways to improve the process. One is to incorporate
the use of information technology into the process. This may be as simple as
using electronic systems to register vendors, distribute requests, and submit
bids. Another improvement is to increase discussions with participating vendors
to ensure a better understanding of the current business processes and practices.
also believe that the state should develop the procurement document and the
associated contract in such a manner so as to allow multiple winning vendors.
Such a procurement strategy should allow vendors to “pick and choose” those
portions of the development and implementation effort that they believe they
can provide with the greatest chance of success. We note that such an approach,
while important, may have somewhat limited applicability because the contracting
department will need a high level of sophistication and experience with project
management practices. We do, however, believe that this strategy would provide
the following benefits:
addition, the contracts should be constructed in such a manner that would allow
the administration to quickly shift tasks from one qualified vendor to another
should performance standards not be met. This strategy would allow the state
to avoid a lengthy reprocurement process and to keep moving forward towards
That Contract Can Be Modified. Even
state has made
terms and conditions
Most large state
amended at some
or even years
costs and delayed
we believe that the terms and conditions of the contract should allow for increased
flexibility between the state and contractor. Specifically, at the end of each
implementation phase, the state and the vendor should be allowed to reexamine
the business needs of the program and adjust the contract accordingly.
Efficient Executive Branch Control Agency Oversight. In
the state control
of project oversight
that are submitted
for review and
or longer. While
with federal penalties increasing annually, extending project time frames for
administrative purposes needs to be examined.
our view, the focus should be on developing information technology oversight
strategies that decrease risk but do not significantly increase project time
frames. For this reason, we believe that the control agencies should increase
their involvement early on in projects through active participation either on
project teams, project steering committees, or governing boards. These forums
can be used as a means to provide guidance and direction to the project. This
practice of earlier guidance and direction would provide value at critical junctures
in the project life cycle and allow the project to focus immediately on addressing
the overarching needs of the administration. Control agency reviews should then
become more simplified and less time consuming.
Can the State Avoid Past Mistakes?
Strong Program Leadership and Sponsorship. For
it must have
is because ultimately
needs must drive
The DCSS’s ownership
the new system
success of California’s
that the Legislature
the DCSS’s executive
this kind of
to require the Director of DCSS, not FTB, to represent the project at legislative
budget hearings, and for DCSS, not FTB, to provide information on project time
lines, deliverables, and issues. While we recognize that DCSS and FTB will have
shared authority for this project, DCSS is ultimately responsible for its implementation.
the Program First, Automate Second. The
state must define its program goals, policies, and procedures first and foremost.
Chapter 478 and Chapter 480 clearly state that California will have uniform
business practices at both the state and local levels. Key to establishing these
uniform business practices will be the establishment of the new department,
appointment of the director, and the establishment of the executive team.
will be just one of the mechanisms for ensuring compliance with the uniform
business practices. Attempting to automate business practices which are yet
to be defined will only lead to “rework” at some point during the automation
project. This rework will result in increased automation costs and missed deadlines.
Therefore, we believe that the procurement document should not be released until
after the project charter is completed and the DCSS policies are formulated.
Good Project Management Practices. Some
portion of the state’s past automation failures can be attributed to poor project
management practices. As in the past, we continue to recommend that the state
use good project management practices to ensure automation success. Such practices,
for example, would include requiring specific workplans and developing processes
to manage changes to the system. To the extent that such practices are used,
can control project scope creep which often results in increased project costs
and missed deadlines. (For a discussion of project management practices, see
our December 1998 report entitled State
also recommend that the project charter required by Chapter 479 be the guiding
document for managing the project, that all participants in the project adhere
to its policies and practices, and that the project charter be completed prior
to release of any solicitation document for the new system.
Oversight Into Account When Considering Schedules and Costs.
In an effort
levels and involvement
will be diverted
of the oversight
the level of
time that the
in the overall
also believe that the oversight level should be periodically reexamined by all
invested parties--the federal government, the administration, and the Legislature--to
determine if more oversight is necessary based on changes in deliverable schedules
and progress in meeting project milestones. Should additional oversight be necessary
at that point, project costs and schedules may need to be modified to include
additional over-sight costs.
the Procurement on the Business Requirements. We
to enhance program
of the state.
and Contractors Should Share the Risk. In
an effort to reduce project failures, the state has been shifting more and more
risk to the vendor community. Current state contract terms and conditions specify
various punitive actions that the state may seek against the contractor for
poor performance. However, there is no corresponding action for poor state performance.
This shifting of risk ultimately results in higher contract costs, less vendor
participation, and decreased accountability by the state. Therefore, we recommend
that the contract terms and conditions provide incentives for both the state
and the contractor to meet performance requirements in a timely manner.
Proper Contract Administration. One
been the state’s
following these general practices for contract administration, the state can
better ensure that the products it receives from the contract will ultimately
meet the business needs of California’s child support enforcement program.
Realistic Expectations. The
that the state
to embark on
going to happen
to take time.
take time to
time to develop
take time to
that the Legislature
ask the pertinent
policy and budget
reforms came in the wake of significant criticism of California’s child support
enforcement program. Taken together, the new laws represent a major change
in how the state administers the program. On the other hand, most of the core
functions in the process of establishing and enforcing child support orders--particularly
the task of locating absent parents--remain largely unchanged, as do many
of the obstacles that confront
program staff in the task of collecting child support. Moreover, it will be
several years before the new statewide automation system is fully implemented.
Thus, it is difficult to predict the near-term impact of the reforms. Nevertheless,
we believe that they hold the prospect of significantly improving program
performance, and our recommendations are designed to enhance these prospects.
report was prepared by Mary Adèr and Anna Brannen, with assistance from
Megan Atkinson, under the supervision of Chuck Lieberman and Craig
Cornett. The Legislative Analyst’s Office (LAO) is a nonpartisan
office which provides fiscal and policy information and advice to the
request publications call (916) 445-2375.
report and others, as well as an E-mail subscription
service, are available on the LAO’s internet site at www.lao.ca.gov.
The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814.
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