SC Taxpayers Fined More than $100M for Breaking Federal Law -

SC Taxpayers Fined More than $100M for Breaking Federal Law

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Current child support computer, which is not statewide Current child support computer, which is not statewide
Heather McClain and her son Dylan, whose father is said to owe $11,000 in child support. Heather McClain and her son Dylan, whose father is said to owe $11,000 in child support.
COLUMBIA, S.C. - South Carolina taxpayers have been fined more than $104 million for not having a statewide child support enforcement computer system that was required by federal law back in 1997. South Carolina is the only state that still doesn’t have a working system.

“I can understand the frustration of the taxpayers for us not having a system up and running. I share that frustration,” says Katie Morgan, who’s the director of Child Support Services at the state Department of Social Services.

The whole reason for having a statewide system is to make it faster and easier to get children the child support they need. Right now, the DSS computer system is not connected to the 46 county clerks of court, which are not connected to each other. With a statewide system, all the counties would be connected to DSS, which would also be connected to every other state. That would make it easier to track down non-custodial parents who owe child support if they’ve moved to another county or another state.

Heather McClain, who lives just outside Westminster in Oconee County, wishes the system were already in place. "My ex-husband is $11,000 behind in child support," she says. That makes it difficult to provide the things that her 9-year-old son Dylan needs.

"I actually located him, when he moved counties, through a skip-tracing website,” she says. “So I had to pay to locate him because DSS and the state didn't seem concerned that, you know, my child and my household was suffering due to my ex-husband's priorities were out of line."

If South Carolina had the required statewide child support enforcement computer system, it would be easier for the state to garnish wages, intercept tax refunds or lottery winnings, or revoke licenses.

So why doesn’t the state have a working system?

"It's not an inherent flaw to South Carolina,” says Marc Manos, a lawyer representing DSS. “Very few states made the first or the second federal deadline. Almost everyone was significantly late.”

The state had hired Unisys in 1994 to build the system. The federal government had given the state a deadline of 1997 to have it working. But right before it was due in 1997, Unisys just “walked off the job completely,” according to Manos.

Unisys spokesman Brad Bass would say only, “Unisys’ work on the 1994 contract with the State of South Carolina ended in 1997. Unisys and the State subsequently reached an agreement to terminate the contract in a way both parties believed was fair and reasonable.”

Not only did the state not have a working system, the court battle with Unisys took several years, putting the system even further behind schedule.

It was after the state missed the deadline that the federal government started assessing fines. Unisys paid $17.6 million of the fine.

Manos says after the court case was settled with Unisys, “That gave us that long gap of, okay, now what do we do? Do we build on what they left behind? Do we try to do it ourselves? Do we go contract again anew through the normal process? Because it was a very unusual situation that was something that hadn't happened to anyone else.”

The state then got bids for another company to build the system and awarded the contract to Saber Software. While it was working on the system, Saber was bought by Electronic Data Systems. EDS was then bought by Hewlett Packard.

When asked why South Carolina is the only state that doesn’t have the required child support enforcement computer system, which is costing taxpayers millions in fines, Gov. Nikki Haley said, "From what I can tell, in sitting down and going through the whole thing, it's the fact that they've changed hands so many times trying to get to this point.”

As the state got closer to the time HP was supposed to have the system finished, it missed key deadlines, so the state fired HP. The state and HP are now in a legal battle over the firing. Final arguments in that case, which is being heard by the state’s Chief Procurement Officer, are scheduled for mid-March.

The state now plans to take what HP built and hire outside contractors to finish the system, Manos and Morgan say. There’s no estimate for how long that will take, though, because first there has to be an assessment of exactly how far along HP’s system is and how much is usable.

HP says it was closer to being finished than the state admits, and one of the main reasons for the delays was changes the state kept making.

For example, the state first wanted the “date” for cases to be a six-digit number, like 10/25/12. But then, after the code was written, the state changed that to wanting an eight-digit number, like 10/25/2012. That requires code to be rewritten.

HP spokesman Bill Ritz says, “As we’ve said all along, HP represents the fastest and most cost-effective route for South Carolina to obtain a federally certified system. HP supports a fair and balanced business resolution that will expedite completion of this vital system for South Carolina children and taxpayers.”

HP has paid about $33 million of the state’s fine. That means Unisys and HP have paid almost half and taxpayers have paid more than $50 million in fines over the years.

Heather McClain says she hopes the system is finally working in time to help her 9-year-old son. "I think having that in place would be awesome, as far as getting something handled in a timely manner and actually trying to get some of these deadbeat dads or deadbeat moms in court, have them paying like they're supposed to be paying."

The next fine is expected to be about $8 million and will be due in mid-September.

DSS spokeswoman Marilyn Matheus says, "Even without having this system, DSS collected more than $250 million last year on behalf of children and families in South Carolina.  This includes approximately 52% collections on current child support plus payments on past due child support.  South Carolina met the federal baseline for both current payments and payments on arrears." 
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