s 362.7 L72SERC 2001 Legislative Audit Division State ofMontana STATE DOCUMENTS COLLECTIOi 2001 Report to the Legislature Information System Audit MONTANA TE LIU!,.. August 2001 HELE1N5A15MEC E"h AVE ' System for the Enforcement and Recovery of Child Support (SEARCHS) Department of Public Health and Human Services This report provides information regarding application controls over the department's SEARCHS system, and access and change controls over the related processing environment. It contains recommendations for improving controls over the SEARCHS information system environment. These recommendations include: Resolving programming problems toensure child support collections are assigned to the state for reimbursement ofpublic assistance. Distributingexcess reimbursed assistance to custodial parents. Validating social security numbers. Modifying support orders to include medical support. Reviewing bank account information. — _~ _ Direct comments/inquiries to: Legislative Audit Division Room 160, State Capitol PO Box 201705 MT 01DP-06 Helena 59620-1705 Helpeliminatefraud, waste,and abuse instate government. Call the Fraud Hotlineat 1-800-222-4446 statewideor444-4446 in Helena. MONTANASTATELIBRARY 3 0"II8I I6II4I' IIIn0il0I1I5 I2H1ill25||4 INFORMATION SYSTEM AUDITS Information System (IS) audits conducted by the Legislative Audit Division are designed to assess controls in an IS environment. IS controls provide assurance over the accuracy, reliability, and integrity of the information processed. From the audit work, a determination is made as to whether controls exist and are operating as designed. In performing the audit work, the audit staff uses audit standards set forth by the United States General Accounting Office. Members of the IS audit staff hold degrees in disciplines appropriate to the audit process. Areas of expertise include business and public administration. IS audits are performed as stand-alone audits ofIS controls or in conjunction with financial-compliance and/or performance audits conducted by the office. These audits are done under the oversight ofthe Legislative Audit Committee which is a bicameral and bipartisan standing committee ofthe Montana Legislature. The committee consists ofsix members ofthe Senate and six members ofthe House of Representatives. MEMBERS OFTHE LEGISLATIVE AUDIT COMMITTEE SenatorJohn Cobb Representative Joe Balyeat SenatorJim Elliott Representative Dee Brown Senator Dan Harrington Representative Bill Eggers Senator Ken Miller Representative Hal Jacobson SenatorCorey Stapleton Representative JeffPattison, Vice Chair SenatorJon Tester, Chair Representative David Wanzenried LEGISLATIVE AUDIT DIVISION Scott A. Seacat, Legislative Auditor Deputy Legislative Auditors: John W. Northey, Legal Counsel Jim Pellegrini. Performance Audit & Tori Hunthausen, IS Audit Operations James Gillett, Financial-Compliance Audit August 2001 The Legislative Audit Committee Ofthe Montana State Legislature: This is the report ofour Information System audit ofcontrols relating to the System for the Enforcement and Recovery ofChild Support (SEARCHS) at the Department ofPublic Health and Human Services. We reviewed application controls over the SEARCHS application and general controls relating to access and change controls. This report contains recommendations for improving controls related to the system and department procedures. Written responses to our audit recommendations are included in the back ofthe audit report. We wish to express our appreciation to the department personnel fortheircooperation and assistance throughout the audit. Respectfully submitted. >cott A. Seacat Legislative Auditor Room 160, StateCapitol BuildingPOBox 201705 Helena, MT 59620-1705 Phone(406)444-3122 FAX (406)444-9784 [email protected] Digitized by the Internet Archive in 2011 with funding from Montana State Library http://www.archive.org/details/systemforenforce2001mont Legislative Audit Division Information System Audit System for the Enforcement and Recovery of Child Support (SEARCHS) Department ofPublic Health and Human Services Members ofthe audit staffinvolved in this audit were Debra Blossom, Wendy Kittleson, and Ann Walchuk. 1 Table of Contents Appointed and Administrative Officials ii Chapter I - Introduction and Background 1 Introduction 1 Audit Objectives 3 Audit Scope and Methodology 3 Compliance 4 Chapter II - Application Controls 5 TEAMS Interface 5 Distributing Excess Collections 5 Invalid Social Security Numbers 6 Modification ofSupport Orders 7 Inaccurate Bank Account Number 8 Resolution ofPayment Exceptions 9 Unreconciled Differences 10 Access Controls 1 Timely Review ofCase Information 13 Resolution ofCase Ticklers 14 Department Response A-3 Page i Appointed and Administrative Officials Department ofPublic Health Gail Gray, Director and Human Services Mike Billings, Administrator, Operations and Technology Division Marie Matthews, Fiscal Policy Advisor/Audit Liaison Amy Pfeifer, Acting Administrator, Child Support Enforcement Division Wayne Peterson, Chief, Administrative Services Bureau, Child Support Enforcement Division Chad Dexter, Chief, Field Services Bureau, Child Support Enforcement Division. Page ii Chapter Introduction and Background I - Introduction We conducted an information system audit ofthe Child Support Enforcement Division's (CSED) System for the Enforcement and Recovery ofChild Support (SEARCHS). The purpose ofthe CSED ofthe Department ofPublic Health and Human Services, is to achieve financial support forchildren by establishing, enforcing, and increasing parental awareness ofparental obligations. SEARCHS was implemented in June of 1993 to meet the Federal Family Support Act of 1988 requirement that all states have a federally certified automated child support system. In 1996, Congress passed the Personal Responsibility and Work Responsibility Act (PRWORA) which contained significant child support legislation. In 1997, the Montana legislature passed amendments through SB374 to implement the requirements of PRWORA. Key provisions ofthe act include: employer reporting ofnew hires to state databases within 20 days of hire; submitting child support cases to a federal case registry; automating income withholding notices; and data matches with financial institutions. SEARCHS receives information from a number ofautomated systems or departments including: TEAMS (The Economic Assistance Management System) for public assistance; CAPS (Child and Adult Protective Services); SABHRS (Statewide Accounting, Budgeting and Human Resource System); Department ofJustice; Supreme Court; Department ofCorrections; Department ofLabor- Unemployment Insurance, Job Service, and Worker's Compensation; Department ofRevenue - New Hire, State Income Tax, and Employer Wages; Fish, Wildlife, and Parks; Federal Case Registry; CSENet (Child Support and Enforcement Network); FBI (Federal Bureau ofInvestigation); Social Security Administration; IRS (Internal Revenue Service); Department of Defense; Veteran's Administration; and Selective Service. There are five regional offices that process child support cases; Butte, Billings, Great Falls, Missoula, and the interstate office located in Helena. The state disbursement unit forchild support collections is also located in Helena. The division had 191.75 budgeted full-time employees for Fiscal Year 2002. Page 1 Chapter I - Introduction and Background As ofJanuary 31, 2001, the division had 38,671 open child support cases. Child support collections in the month ofJanuary 2001 totaled $4,190,970, ofwhich $523,061 reimbursed the state forpublic assistance. During the audit, we reviewed seven key areas. They are case initiation and locate, establishment, enforcement, financial management and payment processing, reporting, and access and change control procedures. Case initiation and locate involves the initial applicant information entry, a search forduplicate records, securing medical and financial support information, and location ofthe absent parent (AP). Establishment includes paternity establishment in cases of children born out of wedlock or when the paternity ofa child is in question, and calculation ofmonthly support payments or entering court ordered child support obligations. Enforcement involves methods oftrying to collect income from the AP such as income withholding, monthly billing, credit bureau reporting, state and federal tax refund offsets, state bad debt offsets, and unemployment benefits locate. Financial management and payment processing includes the processing ofpayments received, including, entry and posting of payments, check deposit at the Treasury Unit, distribution of payments, check issuance, and reconciliations. Federal reports are submitted indicating performance standards and results used to calculate program grant amounts. Performance reports indicate the number ofcases, collections, distribution ofcases, and aging. Access security to help ensure proper controls are in place to limit accessibility to SEARCHS case information to appropriate personnel. Change control procedures to help ensure changes to the SEARCHS programming and/ordata are authorized and appropriate. According to a contract between the department and its consultant, TRW, contract programmers are responsible for maintaining the SEARCHS system and all programming Page 2