1. 1 Wisconsin Shares Child Care Subsidy Program Legislative Audit Bureau August 2009

2. 2 Program Expenditures and Participants u Fiscal year 2008-09 expenditures were approximately $371.2 million u In December 2008 –35,716 individuals participated in the program –Most participants also received Medical Assistance, and were female, single, and between the ages of 21 and 30 –Providers reported caring for 59,863 children

3. 3 Subsidy Payments by Provider Type, December 2008 u Licensed providers received $23.8 million –$18.2 million to 1,810 group child care centers –$5.6 million to 1,966 licensed family providers u Certified providers received $2.4 million –$1.8 million to regular certified providers –$657,000 to other certified providers

4. 4 Subsidy Payments by County, December 2008

5. 5 Statutory Eligibility Requirements u Family status, employment or other authorized activity, and family income are to be verified u Eligibility is to be reassessed every six months u Participants are to report changes that affect their eligibility within 10 days

6. 6 Case File Review Results u We selected a statistically valid random sample of 400 participants u Eligibility problems were found for 43 participants u We estimated $16.7 to $18.5 million in improper subsidy payments were made in 2008

7. 7 Eligibility Problems u Ineligible Participants u Subsequent Ineligibility u Participants with No Recorded Wages u Inadequate Documentation of Self-Employment

10. 10 Attendance Record Review Results u We requested October 2008 attendance records from 50 child care providers –21 providers received excess payments for that month –22 providers submitted records that appeared to have been fabricated or altered, or contained inaccuracies u We estimated $4.0 million in improper payments for these 50 providers in 2008

11. 11 Child Care “Rings” and Other Issues u Participants may care for each other’s children and receive subsidy payments u Opportunity for fraud is present as care can be reported, but not provided

12. 12 Providers Receiving Subsidies for their Employees’ Children u Program integrity staff expressed concern about accurate attendance reporting u Program officials have been aware of enrollment incentives since at least 2006 u 2009 Wisconsin Act 28 limits subsidies that can be paid for employees’ children

13. 13 Program Integrity Efforts u County program integrity staff focus on subsidy payment errors u It is time-consuming to pursue fraud u DCF was authorized 5.0 full-time equivalent program integrity staff in Wisconsin Act 2

14. 14 Reporting u By December 1, 2009, DCF is to report on: –Efforts to better control costs and address fraud and abuse –Activities of the program integrity staff authorized in 2009 Wisconsin Act 2 –Value of subsidies paid to providers for the children of their employees –Progress in improving provider and participant compliance with program requirements –Status of improvements in the eligibility determination and wage verification processes

15. 15 Wisconsin Shares Child Care Subsidy Program Legislative Audit Bureau August 2009