HAGÅTÑA (The Guam Daily Post) — The Child Support Enforcement Division, or CSED, of the Office of the Attorney General has more than $6.2 million in undistributed funds sitting in a trust account as of June 2023, of which more than $4.2 million have remained undistributed for more than five years, according to the Bureau of Budget and Management Research.
Bill 240-37 from Speaker Therese Terlaje would require the attorney general to commence an escheatment process on behalf of the government of Guam if the custodial or non-custodial parents cannot be located. Escheatment is when unclaimed funds or assets are turned over to the state.
Attorney General Douglas Moylan stated Tuesday, during a public hearing on the bill, that undistributed child support funds have been “a problem” for the OAG since his first term in office about two decades ago. Funds remain undistributed primarily due to parents becoming unlocatable, he added.
According to the speaker, Bill 240 was introduced at the request of the Office of the Attorney General.
“Make no mistake madam speaker, I am for getting the money directly to the custodial parent and the children that are entitled to it. The problem is logistically, we’re holding on to funds for such a long time, that we’re no longer capable of identifying who’s entitled to it,” Moylan said.
Among CSED’s undistributed funds, more than $823,000 cannot be reconciled, representing child support payments made before Aug. 30, 1996, due to a lack of bank records, according to Tuesday’s testimony.
Bill 240 would replace existing law, which states that the Superior Court of Guam may order child support funds to be returned to the person who paid them if they were left unclaimed for two years. Alternatively, the court could have the funds deposited with the Treasurer of Guam into an interest bearing account for five years, after which the funds will be escheated to GovGuam if still unclaimed.
Under the measure, the attorney general would need to continue to try to locate the custodial parent or payee for at least six months if undistributed funds may need to be escheated and contact was lost with the custodial parent and non-custodial parent.
When funds have remained unclaimed for at least two years, the attorney general would be required to begin the process of closing the child support case. A closure letter should advise the custodial parent that if they do not contact the attorney general within 60 days, their case will be closed and collected funds will be refunded to the non-custodial parent. If the non-custodial parent cannot be located, the attorney general will need to commence an escheatment, which would be done through a court petition.
The court would then order the custodial or non-custodial parent associated with the funds, as well as all interested persons, to show cause as to why the funds should not be vested to GovGuam.
BBMR stated in a fiscal note that under current law, the $4.2 million that have remained undistributed for more than five years as of June last year should be escheated to GovGuam.
Working on them
Deputy Attorney General Raymond Ilagan, who oversees CSED, said Tuesday that their main goal is to try to find relevant parties so that moneys still go to them. He said his division began pulling up older cases in November 2023 and have been able to distribute or refund payments for about $391,000 in funds.
“Our office just needs more time to look at these older cases to see what can be done and to properly distribute these funds. But we are working on them,” Ilagan said Tuesday.
While he said escheatment of the $823,000 in unreconcilable funds may be proper, Ilagan added that it would result in a financial impact to CSED.
“Any funds that are escheated to the government of Guam is considered income to the government. And as a result, the federal government, who finances 66% of the Child Support Division, will reduce their funding for administrative costs accordingly. I believe that is why prior attorneys general were reluctant to escheat undistributed funds, because of the financial impact to the child support office,” Ilagan said.
“I think in order to safeguard the operations of the child support office, this escheatment bill has to protect the Child Support Enforcement Division from any devastating financial impact by the federal government,” the deputy attorney general added.
Bill 240 would appropriate escheated funds to CSED to cover a reduction in federal funding.
Ilagan said based on their analysis of how escheating the $823,000 would impact CSED, he believes they may want to break it down into four different escheatment periods.
“Try to escheat one-fourth of it and see where that takes us. That we, if there’s some issue with our funding, at least we can try to control the damage to our office,” he added.
Attorney General Douglas Moylan, 4th from left, and other members of his staff, answer questions during a hearing on Bill 240-37(COR) Tuesday Feb. 27, 2024, in the Public Hearing Room of the Guam Congress Building in Hagåtña. From Left: Wilfred Aflague, Raya King, Yolanda Elliott, Moylan, Raymond Ilagan and Frank Palomo.
