Conservatively Speaking

Audit finds major problems with state child care program

Posted by Mary Lazich on June 12, 2009

Audits

During January 2009 as I requested an audit be conducted of the state’s child care subsidy program, Wisconsin Shares, my fear was that problems associated with the program were more serious and widespread than the Milwaukee Journal Sentinel discovered. It turns out that I was right.

Wisconsin Shares is a $340-million program that, when successful, provides assistance to low-income parents to help them get and retain jobs. During a four month period, Milwaukee Journal Sentinel reporter Raquel Rutledge pored over 2,500 records and documents and uncovered, what it called, “a trail of phony companies, fake reports and shoddy oversight,” a system that could be scammed without difficulty or accountability by parents and child-care providers, “capitalizing on children for public cash.”

With limited access to child care cases, the Journal Sentinel still managed to find $750,000 in suspicious child-care disbursements. The waste and fraud go much deeper.

Following the start of the newspaper’s investigation, as a member of the Joint Committee on Audit, I formally asked in a letter to the committee co-chairpersons that they request the highly regarded, nonpartisan Legislative Audit Bureau (LAB) conduct a full review of the Wisconsin Shares child-care program. Three days later, the committee co-chairpersons announced the committee would hold a public hearing to decide if the LAB should conduct an audit, and the review was eventually approved.

The LAB uncovered millions of dollars of waste, periods of ineligibility, a lack of correct documentation, providers paid for care they didn’t provide, and inefficient rules that allow fraudulent child care rings to scam the system. Appropriate solutions have been offered by the LAB that on behalf of taxpayers need to be put into effect as quickly as possible.

Findings of the LAB review include: 

·         Improper payments to providers during 2008 totaling between $16.7 and $18.5 million.

·         Providers were paid for care they either didn’t provide or weren’t authorized to provide resulting in $4 million in improper payments.

·         Rules that allow providers to care for one another’s children. The LAB reports fraudulent child care “rings” were thus created, increasing the likelihood of fraud and abuse.

I strongly agree with the LAB’s recommendations. The Department of Children and Families needs to bolster the way it verifies eligibility, and rules that allow child care providers to commit fraud and then benefit need to be eliminated quickly to prevent further waste and cost to taxpayers. I’m appalled that rampant fraud and waste is occurring, especially at a time the state is suffering a huge deficit.

It is clear there must be an overhaul of the program. We have to protect the taxpayers and we must also ensure that the truly needy, the truly deserving are receiving program services.

The audit by the LAB is the first phase of the review of Wisconsin Shares. A second phase that will examine child care regulation will be conducted later this year.