MARTINSVILLE -- This time, for a change, outsourcing could benefit working folks in Martinsville and Henry County.

Or maybe not.

State officials said Thursday that the volume of calls from residents with questions, tips and complaints related to child support overwhelm employees of the Child Support Enforcement Division of the Virginia Department of Social Services. To increase responsiveness and collections, the department has contracted with a Reston-based company to establish and staff a call center that will handle incoming child support calls.

And the company, Tier Technologies, has decided to put the call center in Martinsville, a city long beset by manufacturing layoffs blamed on jobs migrating overseas.

Although no officials said so during a Thursday news conference, Tier Technologies faces some financial challenges.

The company is late in filing financial statements for its fiscal year ended Sept. 30 and for its first quarter ended Dec. 31. And Tier, noting it has "identified a number of accounting issues," has reported plans to revise financial statements for the fiscal years of 2002, 2003 and 2004.

These restatements, delays and losses anticipated for the past two quarters have left Tier in default under a revolving credit agreement. In addition, the delays in filings with the Securities and Exchange Commission led the Nasdaq stock exchange to notify Tier it is not in compliance with requirements for continued listing on the exchange. Nasdaq held a related hearing Feb. 2 but has not yet notified Tier of its decision, according to company spokesman Matt Brusch.

Brusch would not answer specific questions about Tier's financial condition.

Kevin Hall, a spokesman for Gov. Tim Kaine, said Tier's proposal for the state contract had "already gone through the bid process" when Tier disclosed in earlier February information about its delayed filings and other financial issues. He said the company was "very forthcoming" about those issues in conversations with state officials.

"The attorney general's office reviewed the situation and signed off on it," Hall said. "The Department of Social Services will stay on top of it and monitor the company's performance."

During Thursday afternoon's news conference, Tier's Chief Executive Officer Jim Weaver said the call center will employ 77 people. He said he hopes it will be operable by mid-May in the Commonwealth Centre, which was once part of the now defunct Tultex apparel company. Weaver said Tier will invest $3.1 million in the project.

Job interviewing has begun. Weaver said entry-level jobs will pay about $20,000 a year and workers will become eligible for Tier's benefits package.

Nick Young, director of the state's Division of Child Support Enforcement, said no state employees will lose their jobs because of the outsourcing of work to Tier Technologies. He said state workers will be able to focus more on enforcement issues.

"We've been handling about 4,000 calls a day and have needed to handle about 6,000," he said.

Young said Tier's call center employees will primarily take incoming calls from parents. They can also receive tips from callers, he said, about how to locate about 150,000 parents who owe child support payments in Virginia.

Tier said its state contract, which will run through June 30, 2009, with options to renew, is valued at up to $27.1 million.

The StarTek call center in Henry County employs more than 700 people. Chad Thorpe, a StarTek spokesman, said the Tier call center will "have little or no impact" on StarTek's operations or employment base.