Lawmakers probe nationwide child care fraud

By Andrew Rice
The Center Square

A bipartisan group of senators probed allegations of fraud in the child care industry on Thursday.

The lawmakers called for greater transparency and more rigorous verification procedures to ensure that child care providers are not engaging in fraudulent activity.

The U.S. Senate Health, Education, Labor and Pensions Committee questioned leaders of child care institutions from across the country about allegations of fraud stemming from claims about child care facilities in Minnesota.

In December, online content creator Nick Shirley posted a video alleging day care facilities in Minnesota improperly used millions of dollars in federal subsidies to support the businesses.

Sen. Bill Cassidy, R-La., said the problem of fraud was not isolated to Minnesota. He pointed to improper payments to day care centers in states across the country.

Shortly after allegations of fraud in Minnesota came to light, the Trump administration froze $10 billion in federal funds for child care facilities in five states. California, Illinois, Colorado, New York and Minnesota were among the states where the administration froze its funding.

However, a federal judge later blocked the Trump administration’s attempt to freeze funds and allowed it to proceed.

“We’ve got to protect the taxpayers, we’ve got to allocate the resources where the resources need to be allocated for families who actually have the need,” Cassidy said.

Panelists before the committee called on child care facilities to implement rigorous screening and to ensure businesses are not making fraudulent payments based on faulty information, such as improper child rosters.

Paula Polito, owner of Beary Cherry Tree Child Care center in Louisiana, pointed to the various methods of attendance verification she uses in her business. She spoke about online authorization efforts in the state to aid attendance verification.

“This modernization promotes consistency, strength, fraud prevention and simplifies operations without compromising security,” Polito said.

Sen. Jon Husted, R-Ohio, said the federal government should base its payment system on attendance records rather than enrollment records, like several other states. He also called for greater accountability in the day care licensing process.

Henry Wilde, CEO of Acelero Inc., said the best way to increase accountability is to conduct random visits by state officials and licensing authorities.

“When you go out to do a site visit, also know how many kids have child care subsidies in this building,” Wilde said. “If you have some huge disparity, make sure that you’re flagging it.”

Wilde also warned against creating additional bureaucracy to manage the problems that occur at day care facilities. He said the government should take a responsible and rudimentary approach to preventing fraud.

Democrats on the committee slammed the Trump administration’s cuts to child care funding in states across the country. The Democrat lawmakers warned that blanket cuts to state child care funds would cause more harm than good.

“Serious oversight involves prosecuting specific cases based on solid evidence like the Biden administration did, not issuing a blanket freeze for funding based on conspiracies or politics like Trump has done,” Sen. Patty Murray, D-Wash., said.

Child care professionals on the panel urged senators to increase funding for child care centers and provide greater flexibility to pay educators more highly. Liz Denson, President and CEO of Early Connections Learning Centers, called for more predictable public funding of child care facilities.

“Providers cannot expand access, improve quality, or raise teacher wages without predictable public investment,” Denson said. “The path forward is increased investment, effective oversight and a shared commitment to affordability, access and quality.”

Sen. Maggie Hassan, D-N.H., called for the passage of her bill to provide greater federal investment in child care that will expand access for providers. The bill would aim to allow child care facilities to remain open later in the day.

Denson called on lawmakers to approve more funding for child care facilities and increase teacher pay.

“Even with the federal dollars currently received, they don’t cover the full cost of high-quality care,” Denson said. We’re already so woefully underfunded that we’re blending and braiding and clawing it together to support the families who need us the most.”