Summary of Report 03-006

We estimate that weaknesses in monitoring and sanctioning processes at the Boards we audited may have allowed as much as $1.9 million in unsupported payments to child care providers between September 2001 and January 2002. The projected $1.9 million represents 3 percent of the $62.4 million in total payments made to child care providers during this time period. Payments to clients whose eligibility we could not confirm because of errors in payment and case files or missing documentation account for $1.6 million of the total estimate. Of the $1.6 million, 86 percent of the dollar errors were identified at one Board. The six Boards we audited received $147 million in fiscal year 2001, or 48 percent of the total funding to the 28 Boards, according to the Agency.

Included in the projected $1.9 million in unsupported payments were contractors at three Boards who may have paid an estimated $331,000 to providers for services to clients who may have underreported their wages when applying for child care services. This assessment is based on a comparison of clients' applications for services and the wage information employers report to the Agency for tax purposes. If these clients in fact underreported their wages, they could be receiving services for which they are not eligible, or their share of the child care costs, which is calculated based on their incomes, could be too low and the program's too high.

The six Boards we audited do not perform adequate monitoring visits to relative self-arranged care providers. The six Boards paid self-arranged care providers $20.8 million for services in fiscal year 2001.

The six Boards we audited have incomplete safeguards for the information they maintain in the Child Care Service Delivery System, which is the application the Boards use to transmit data to the Agency's Budget and Payment Application (BAPA). Weaknesses in the way Boards administer the automated systems create a risk of processing inaccurate payments due to incomplete or inaccurate data.

Of the three performance measures in the Agency's child care contracts with the Boards, two are inaccurate. The "Average Number of Children Served per Day" measure is inaccurate because the data the Agency uses to calculate the measure is not reliable. The measure "Percent of Child Care Management System Vendors Who Have Met Designated Vendor Criteria" is inaccurate because the Agency does not follow the measure definition. The definition for the third measure, "Number of Clients Trained Through TWC Child Care Training," is too broad, resulting in inconsistent information from Board to Board.