Child Support Enforcement:
Early Results on Comparability of Privatized and Public Offices
HEHS-97-4, Dec 16, 1996
Pursuant to a congressional request, GAO provided information on states' efforts to fully privatize local child support enforcement offices, focusing on: (1) states' rationale for full-service privatization; (2) how the performance and cost-effectiveness of full-service privatization efforts compare with publicly managed child support enforcement; and (3) what, if any, issues could affect future full-service privatization contracts.
GAO found that: (1) fifteen states have turned to full-service privatization of selected local child support enforcement offices as a way to improve performance and handle growing caseloads that are reaching or exceeding 1,000 cases per worker in some instances; (2) for some offices, privatization has also been a response to state restrictions on hiring additional public employees; (3) in the three comparisons of performance GAO conducted, fully privatized offices performed at least as well as or, in some instances, better than public child support programs in locating noncustodial parents, establishing paternity and support orders, and collecting support owed; (4) the relative cost-effectiveness of the privatized versus public offices, however, differed among the comparisons GAO made; (5) Virginia's and Arizona's privatized were more cost-effective, 60 percent and 18 percent, respectively, than their public counterparts, but in Tennessee, one public office was 52 percent more cost-effective than the privatized office reviewed, while the remaining privatized office in Tennessee was about as cost-effective as its public counterpart; (6) according to state and contractor officials, differences in performance and cost-effectiveness among private and public offices may have resulted from the increased flexibility contractors have in acquiring resources and managing staff, contractors' greater access to technology, differences in the complexity of the caseloads, and varying payment rates to contractors for child support enforcement services; and (7) an issue of contractor access to Internal Revenue Service data that could have impeded future full-service privatization has been partially addressed by recent welfare reform legislation which authorizes state child support agencies to disclose to contractors certain, but not all, restricted tax data that are useful in locating parents and enforcing payment.