The child-support agency's past performance has been so dismal, it has cost Hawai'i millions of dollars in federal payments that serve as incentives for states to improve their child-support collections and distributions, independent auditors found in late 2003.

Parents who have custody of their children and have been waiting years for the state to collect at least some of the money owed them say the child-support enforcement system is broken and long overdue for repairs. Some have waited decades to see any payment, while others have been forced onto welfare rolls.

Marsha Sheppard, a mother of three daughters, said she struggled for eight years to collect the bare legal minimum in support payments from her ex-husband, $50 per month per child.

"The state system is ludicrous," she said. "The child-support people, I'd call them, I'd write to them, and they'd say, 'We don't know where he lives.' I'd tell them, 'Here's where he lives, here's where he works, here's his phone number, here's his license plate number.' And nothing would happen. He said he wasn't working and he couldn't afford it. He never paid a cent."

Repeated attempts to contact Sheppard's ex-husband and his attorney were unsuccessful. In court papers and correspondence to Sheppard last year, her ex-husband's lawyer said his client was never properly served with divorce papers and that proceeds from the sale of a property on the Mainland should have been credited toward child support.

According to court records, however, Sheppard was awarded sole ownership of that property in the divorce case.

Agency understaffed

Congress created the nationwide child-support enforcement system in 1975 with the aim of keeping families self-sufficient and off welfare. Under the federal-local government partnership, states help establish paternity, track down delinquent parents and enforce court orders for support payments. They then collect the payments and distribute them to the parents and children owed the money.

Attorney General Mark Bennett said improving collections and customer service are priorities at the Child Support Enforcement Agency. With federal encouragement, he said, the state has been looking hard at old accounts, some of which have been carried on state books for years.

Bennett said the state has improved in areas beyond delinquent payments, including increasing court orders for child support.

The accounting change that allowed the state to clear $11.8 million in overdue payments from the books "has never been done before here," Bennett said. But he said it was approved in advance by federal officials and should substantially increase "incentive payments" that the federal government grants to Hawai'i and other states for improved collection performance.

David Siegel, acting commissioner for the federal Office of Child Support Enforcement, said Friday he couldn't immediately confirm that Hawai'i's bookkeeping change to delinquent accounts last year had been approved by his agency. But Siegel said that when closing cases, states have to comply with federal regulations and meet federal benchmarks.

"The most recent information I have is that Hawai'i has indicated they have met the case closure benchmarks," Siegel said.

Hawai'i is trying other approaches to improve its child-support collections, but the task is difficult when child-support agency caseworkers handle an average of 520 cases each, "one of the highest caseloads in the country," Bennett said. The national average caseload is 305 cases, according to agency statistics.

Although the caseload increased 13 percent between 1999 and 2004, the Child Support Enforcement Agency's caseworker staff has not expanded in that period. The agency needs 90 more workers and has asked the Legislature for approval to hire 30, Bennett said. Legislators have pared the request to 15 hires, but more positions may be restored in ongoing budget talks, he said.

One mother's struggle

A teacher at Waialua High School, Marsha Sheppard is philosophical about the problems in getting the child support that is due her.

When Sheppard's two oldest daughters each turned 18, the state "was very efficient in notifying them that they were no longer eligible for the support that they had never received," Sheppard said.

Late last year, she took matters into her own hands.

"I took him to court to try to increase the support he was supposed to be paying for his youngest daughter, who's now in high school," she said. "But he had an attorney — this man who can't afford to pay child support — and there were three continuances. I talked to a lawyer who told me it would cost me more in attorney's fees than it was worth, so I finally settled."

Sheppard agreed to forgive some $10,000 in delinquent child-support owed by her ex-husband in return for his agreement to pay $100 a month for his youngest daughter, according to court records.

"So far, he's paying," she said.

State officials, meanwhile, were able to remove Sheppard's $10,000 from its delinquent accounts ledger without collecting a penny of the debt.

Taxpayers take hit

Child-support cases may appear to be simply private disputes between warring parties, but in fact taxpayers have a large stake in the system. To ensure that needy children are provided for even if a parent reneges on child support, the state provides welfare assistance and then goes after the responsible parent for repayment.

That's taxpayer money the state will no longer actively try to recover from delinquent parents.

Russell Suzuki, state deputy attorney general, said the state identified the debts as "impractical or uneconomical" to keep open as collectible accounts.

"Many of these accounts were very small and none had had payments applied to arrears owing to the state in the last two consecutive years," Suzuki said.

According to state figures, some of the accounts showed only pennies still owed to the state, but the average debt was $2,377. None of the accounts totaled more than $10,000, but many were in excess of $9,000.

"The state can still collect these debts, however, but must do so without using (federal) resources," Suzuki said.

Bennett said the state will use its own money to pursue some of the larger accounts if it believes it might recover payments.

Efforts questioned

The other 1,461 accounts of the 5,000 shelved in September had "no further monies owing to the state and these accounts were also recategorized based upon that fact," Suzuki said. The state may have not been owed money, but families owed the money were still waiting for payments.

Those debts — $5.8 million owed to custodial parents and their children by nonpaying responsible parents — were worth an average of $3,986 per account. Some of the delinquencies totaled $40,000 and $50,000. One was worth more than $80,000.

Bennett said in those cases, the state lost touch with the parents who were owed the money. In some cases, the parents with custody of the children told the state they didn't want any more help in collecting the debts. In nearly a fourth of these accounts, the state received payments from the delinquent parents within the past three years, but those payments went toward paying off welfare debts owed to the state.

The state declined to identify any of the parents whose child-support accounts were deemed uncollectible, saying release of such information would violate confidentiality laws.

"It sounds to me like they should be spending more time and effort in Hawai'i on collecting money" instead of adjusting the books, said Debbie Klein, director of ACES, a national nonprofit organization that monitors child-support issues around the country. "What the statistics don't tell you is how many parents can't be found because the state lost the paperwork, or how many have opted out of the system because they just got tired of waiting for help."

Last among the states

The state's removal of $11.8 million from the delinquent-accounts ledger meant just a slight reduction in the overall amount of unpaid child-support in Hawai'i, according to the latest available state and federal figures. In October 2003, child-support delinquencies in Hawaii totaled $533,340,151.

Hawai'i is not alone in reporting large sums of unpaid child support. Total delinquencies for all states, territories and the District of Columbia amounted to $96 billion at the end of the 2003 fiscal year. What sets Hawai'i apart is its bottom ranking among states in collecting delinquent money owed to families.

For the fiscal year ended September 2003, the latest available national statistics, Hawai'i accounted for 53,681 cases of child-support delinquencies but collected money in just 40 percent of the accounts. Smaller jurisdictions, including Guam and the Virgin Islands and all other states, reported better numbers than Hawai'i. The District of Columbia, with a 37 percent collection rate, was the only agency reporting worse performance.

Bennett said the 2004 fiscal year numbers — which haven't been audited or released by the federal Office of Child Support Enforcement — show the state improved its collection rate to 42.4 percent. He said the numbers will improve again for the current fiscal year, in part because of the bookkeeping change.

In the latest independent audit of the Child Support Enforcement Agency, completed in late 2003, the state's performance came under sharp criticism. Auditors noted that in the previous two years, the agency had to return a total of $1.6 million in federal incentive payments, in part because the agency failed to meet required collection and distribution performance levels.

The auditing firm of Ohata Chun & Yuen also noted that from 1998 to 2002, the agency hadn't claimed $3.7 million in reimbursements available from the federal government for certain administrative expenses.

Attorney General Bennett agreed with the audit's findings but said getting the state's delinquent collection rate to 40 percent means Hawai'i is in line for substantially more in incentive payments.