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DEAR COLLEAGUE LETTER

DCL-04-40

ATTACHMENT:  Migration Information

DATE: September 23, 2004

TO:  ALL STATE IV-D DIRECTORS

RE:  Federal Agency Conversion to EFT/EDI, SSN Removal from U.S. Treasury Checks, and Federal Agency E-Payroll Consolidation

Dear Colleague:

This is to provide a status report on several Federal agency activities that impact child support payments for Federal employees and beneficiaries.

Federal Agency Conversion to EFT/EDI
You may recall that when discussions began last year on the repercussions from the removal of the Social Security Number (SSN) on U.S. Treasury checks, Electronic Funds Transfer/Electronic Data Interchange (EFT/EDI) was considered the key solution because the SSN is included in the addendum record in the EFT/EDI transmission. The concern at that time was whether Federal agencies would be able to convert to EFT/EDI this year given other priorities.

I am pleased to report that there has been a great deal of progress in the EFT/EDI conversion process due to the cooperative efforts of the Federal payroll agencies and processors, the Department of Treasury’s Financial Management Service (FMS), the states, and the Federal Office of Child Support Enforcement (OCSE). The four major payroll processors, General Services Administration (GSA), National Finance Center (NFC), National Business Center (NBC) and Defense Financing Accounting Service (DFAS) have all implemented EFT/EDI this year. These four processors administer the bulk of child support payments generated through Federal payroll.

The Federal agencies that distribute retirement annuities and benefits also administer child support orders through garnishment. A separate, concentrated effort is underway to work with them to encourage EFT/EDI implementation.  Since they are benefits agencies and not payroll agencies, they are not part of the e-Payroll consolidation effort. The benefits agencies include: Railroad Retirement Board (RRB), Office of Personnel Management (OPM), Social Security Administration (SSA), and Department of Veterans Affairs. Both the RRB and OPM are making progress toward EFT/EDI, but they may not be fully converted until 2005. 

SSN Removal from U.S. Treasury Checks
The removal of the SSN from U.S. Treasury checks will occur on December 30, 2004. 
However, FMS will offer temporary waivers to:
           •  those agencies scheduled to migrate to a payroll processor and benefits agencies that are making
               progress toward EFT/EDI implementation, but will not have completed by December 2004, and
           •  a handful of small Federal agencies that have a very low volume of payments for which EFT/EDI is not
               cost effective.

Paper checks from these agencies will include the SSN printed on a line that is out of view of the envelope window, which is the solution offered by FMS late last year. 

We recognize the largest volume of remaining paper Treasury checks are attributed to SSA’s Title II benefits (approximately 100,000 orders). FMS reports that SSA will request a long-term waiver from the SSN removal, given its work underway to develop a centralized child support garnishment database. New cases added to the database, scheduled for completion in December 2005, will automatically be sent electronically. Existing garnishments will be converted in 2006. However, if a recently proposed piece of legislation, HR 2971, is passed, it could affect these waivers. This legislation would prohibit the display of SSNs on any government checks or on accompanying documentation. 

OPM e-Payroll Consolidation Effort
Several Federal agencies have migrated to one of the four OPM-selected payroll processors this year (GSA, NFC, NBC and DFAS). Enclosed you will find a migration list that documents the progress thus far. You can find the most current version of the migration schedule on the OPM website under “e-Gov Initiatives” at www.opm.gov.

Appendix A in the OCSE publication, “Working with Federal Agencies as Employers,” has a list of addresses to be used when sending an income-withholding order. Appendix A is being updated to reflect the address changes due to agency migration. In addition, OCSE is expanding Appendix A to include a separate list of addresses for sending the National Medical Support Notice. Upon completion, it will be posted on the OCSE website under publications: http://www.acf.hhs.gov/programs/cse/newhire/employer/publication/publication.htm.

If you have any questions or concerns regarding the SSN removal, the Federal agency conversion to EFT/EDI or the OPM payroll consolidation effort, you may contact Carol Callahan at (202) 401-6969 or ccallahan@acf.hhs.gov. Also, we will keep you informed about the status of HR 2971.

Sincerely,

Sherri Z. Heller, Ed.D.
Commissioner
Office of Child Support Enforcement

Enclosure

cc: Regional Program Managers
    ACF Regional Administrators