Frustrated DSS Director Explains $63 Million Penalties

State Department of Social Services director Dr. Kathleen Hayes told state lawmakers Thursday she's frustrated. State taxpayers have had to pay $63 million in fines to the federal government because the state hasn't set up a statewide child support enforcement computer system. The deadline was 1997.

What's frustrating, though, is that the amount of the fine every year is tied to the amount of money the state spends on the system. "The more we put into it, the more the penalty is and that will continue until we get this thing through in 2011," she told a group of House freshmen.

She's been director since March 2007, but this project goes back to 1993. That's when the state hired Unisys to build the statewide computer system. The state was on its way to meeting the federal deadline but, in field tests of the system, it didn't work. Unisys then walked away. The state had to sue the company to recover some of the money it spent and to get the computer code, so another company could finish the project. Unisys ended up paying back $17 million to the state, Hayes says.

But the lawsuit dragged on for years. The state missed the federal deadline and started being fined. The state sued the federal government, saying it had done what it could to get the system set up, but lost the lawsuit.

Now, South Carolina is the only state that doesn't have a statewide system. "The complexity of it is hard to manage, and to find a vendor to do it is what the state really struggled with over the years," Hayes says. "Thankfully, we have a vendor right now in place, the EDS-Saber Corporation that is already operating on this. They have a fully staffed program. We're seeing great progress there."

She expects the system to be up and running in 2011.

Meanwhile, Gov. Mark Sanford, state Sen. Tom Alexander of Walhalla and others have been lobbying Congress to waive the fines the state is having to pay. Their argument is that the state has done what it could to comply every step of the way and is now working on setting up the system. The state also already meets five out of five federal requirements, even without the statewide child enforcement computer system.

But Hayes warned lawmakers that California, the second-to-last state to get its system certified, paid nearly $1 billion in fines, tried to get them waived but was unsuccessful.

"It is a long shot. There are many people that are not sympathetic to the fact that South Carolina is the only state that can't have this system certified by now," she says.