Auditor delivers rebuke for child support payout error

JEFFERSON CITY, Mo. -- Poor communication and a lack of procedures caused the state's double-issuance of nearly $1.3 million in child support checks, the state auditor said Thursday.

The bulk of the double payments occurred during the Thanksgiving holiday and involved a private state contractor. But then in January, the state double-issued another, smaller batch of checks while working with the St. Louis Circuit Clerk's office.

"While the two occurrences were not related, poor communications and a lack of procedures played a major role in both," State Auditor Claire McCaskill wrote in a letter released Thursday to the state Department of Social Services.

At a news conference in Springfield, McCaskill added: "In both instances, we believe the department has taken meaningful steps to make sure it doesn't occur again."

The state has recovered most of the excess money paid to custodial parents. The contractor involved in the November double-payment agreed last month to pay the state $200,000 to help cover the rest.

That payment was an admission of fault by Systems and Methods Inc., said Department of Social Services director Katherine Martin. In the St. Louis case, the state simply was trying to help a local government that had requested aid, she said.

McCaskill's review "is drawing some conclusions that I think are a little bit extreme," Martin said.

Firm denies wrongdoing

But the president of Carrollton, Ga.-based SMI said Martin was offbase in suggesting the contractor was to blame for the Thanksgiving error.

"We settled on this amount of $200,000 to help the state in collecting the amount that would not be recovered" from custodial parents, said president Joe Stone, who was in Jefferson City on Thursday. "By no means does that mean we did wrong."

Child support payments are collected from noncustodial parents by SMI. The state Division of Child Support Enforcement then provides a daily payment list of custodial parents to SMI, which directs a Jefferson City bank to issue the checks.

During the Thanksgiving holiday, SMI's computer system retrieved the same day's payment list twice, causing the double issuance of 7,504 checks totaling about $1.2 million. McCaskill said the error could have been avoided if SMI had examined the payment files or if employees of the state and contractor had adequately discussed how the holiday would be handled.

Since then, SMI has begun manually checking the payment files to make sure they are correct. No problems occurred during any of seven subsequent holiday periods.

In the January instance, about 130 checks totaling about $64,000 were errantly sent twice to recipients.

Child support used to be collected and paid by circuit clerks' offices. After a change in federal and state law, that responsibility was gradually shifted to the state by July 2001.

Some circuit clerks, however, still had balances from money they had collected but had been unable to pay to recipients, typically because they couldn't determine a correct address.

The St. Louis clerk's office asked the state for help. The state voided some old checks and reissued them after learning correct mailing addresses. However, some of the old checks were cashed in the meantime, resulting in the double payment.

"This situation may have been avoided had (state) and circuit clerk personnel documented the procedures to be used ... and assured that those procedures were correctly communicated," McCaskill said in her letter to state officials.

------

AP reporter Connie Farrow in Springfield contributed to this story.

------

State Auditor Claire McCaskill: http://www.auditor.state.mo.us

Department of Social Services: http://www.dss.state.mo.us

SMI: http://www.smi-inc.com