Child Support Enforcement Privatization

Even though governments have for decades privatized a broad range of government social services, interest in privatization has been renewed because of its potential as a means of coping with limited public resources. Moreover, recent changes in federal welfare legislation have focused on privatizing, or contracting out, social services in particular. Four social programs affected by this legislation--child care, child welfare, child support enforcement, and new block grants to assist needy families--constitute a large share of the nation's welfare system. Debate has focused on whether privatization improves services and boosts efficiency and on what the appropriate role of the federal government should be. Yet little is known about the extent and the policy implications of privatizing these social services. This report addresses the following three questions: (1) What is the recent history of efforts by state and local governments to privatize federally funded social services? (2) What are the key issues surrounding privatization of state and local social services? (3) What are the federal policy implications of privatizing state and local social services? (See GAO/HEHS-98-6, Oct. 1997).

GAO noted that: (1) most of the state and local governments GAO contacted have increased their contracting for social services, as indicated by the number and types of services privatized and the percentage of their program budgets paid to private contractors since 1990; (2) the few empirical studies that examine whether privatization has reduced program costs or improved services show mixed results to date; (3) the challenges that state and local governments encounter include developing clear contract specifications and implementing effective methods of monitoring contractor performance; (4) governments at all levels are struggling with the best way to hold service providers accountable for results; and (5) in this changing environment, GAO believes that the Department of Health and Human Services can be more helpful by increasing its focus on developing and implementing methods of assessing program results.