photo by: Nick Krug

? Gov. Sam Brownback’s administration said this week it plans to appeal a decision by the U.S. Department of Health and Human Services, which says Kansas must repay $11.9 million in federal welfare funds that it received during former Democratic Gov. Kathleen Sebelius’ administration.

John Milburn, a spokesman for the Kansas Department of Administration, confirmed that HHS is demanding the funds be repaid.

“In June, HHS notified the Department of Administration that it was seeking approximately $11.9 million in federal funds related to the cost process related to child support that was in place from fiscal years 2003 through 2010,” he said. “The amount includes overpayment of federal funds as well as interest.”

The issue actually dates back to Sebelius’ predecessor, former Republican Gov. Bill Graves, who in the 1990s began privatizing the child support enforcement functions of the Department of Social and Rehabilitation Services, now known as the Department for Children and Families.

That agency is responsible under federal law for collecting child support on behalf of custodial parents who receive public assistance such as food stamps and cash assistance.

The state can collect child support on behalf of any custodial parent to whom support is owed, but it is required to do so for those receiving federal welfare benefits. It not only has the ability to garnish wages, but can also seize state and federal tax refunds to offset a debt, and in some cases seize other assets of the parent who owes child support.

The state also charges the federal government a fee for the administrative cost of carrying out that function using a formula for calculating those costs.

Theresa Freed, spokeswoman for the Department for Children and Families, said the state typically collects between $195 million and $200 million in child support through its enforcement program, or about 55 percent of the total amount owed to the parents it serves.

Initially, under the Graves administration, the state only hired private contractors in 20 of the 31 state judicial districts. The policy was carried forward through the Sebelius and Gov. Mark Parkinson’s administration.

Those companies are essentially private debt collectors whom the state authorizes to collect child enforcement debts. The companies are paid a percentage of all the money they collect.

When Gov. Sam Brownback came into office in 2011, he greatly expanded the privatization model to apply statewide.

Four companies have contracts to conduct child support enforcement in different parts of the state, according to DCF. But one company, YoungWilliams, has the bulk of those contracts, covering 23 of the 31 judicial districts, and 70 of the 105 counties, including Douglas County.

Two years into the Brownback administration, in 2013, Milburn said HHS began auditing Kansas and its method for calculating the administrative fees and found that the process in place, which dated back to the Graves administration, did not comply with federal law.

At that time, Milburn said, HHS ordered the state to repay approximately $2 million in over-payments and interest for fiscal years 2011 and 2012. It also ordered the state to change its method of allocating the cost of the collection service.

More recently, he said, HHS has been going back and auditing prior years that predate the Brownback administration.

Milburn said the cost allocation system in place now complies with federal regulations. But he said the state plans to appeal the HHS ruling that says it owes $11.9 million for the years 2003 through 2010.