DCF Secretary Testifies before Legislators in Response to Fraud

On Tuesday September 29, Wisconsin Department of Children and Families Secretary, Reggie Bicha, appeared before the Joint Finance Committee to discuss fraud within the Wisconsin Shares child-care subsidy program. Before fielding questions from legislators, Secretary Bicha discussed the steps his department has taken, and will be taking, to stop and prevent fraud. Read his testimony here. Despite criticism, the department indicates it has made great strides in stopping fraud since it was created 14 months ago. Here’s just a glimpse of what is currently being done:

-DCF has revoked more than 100 child care licenses in the past year. This number is more than double last year’s number.
-Because of recent legislative changes supported by DCF, they can now suspend Shares payments to any provider that they reasonably suspect is committing fraud. In the two weeks that DCF has had this ability, 69 providers have had their Shares payments suspended. See the complete list, and updated suspensions, here.
-DCF has hired a 5 person Fraud Detection and Investigation Unit to focus statewide on fraud.
-DCF has contracted with a private investigation firm-one that specializes in public assistance fraud.
-A Shares fraud hotline has been created (1.877.302.FRAUD). You can also report suspected fraud online, via email, or through the mail.
-DCF has created a system that detects suspicious behavior that could indicate fraud by providers.
-The department is working with legislators to create and pass laws that prevent fraud and hold providers accountable for their actions.

While investigating, DCF has found that 95% of suspected fraud cases are in Milwaukee County and that Milwaukee County officials did not spend all of the money allocated to them to run the Shares program. Many have argued that this money could have been used for more fraud oversight and investigations (Read Milwaukee County Executive Scott Walker’s response here). Therefore, in addition to the efforts listed above, several efforts will be focused only on Milwaukee County. The State will be taking over Milwaukee County’s child care administration and program integrity efforts beginning January 1, 2010. The Child Care Anti-Fraud task force- composed of partners like the DCF, the Milwaukee County District Attorney’s Office, the Department of Justice’s Division of Criminal Investigation, the Federal Bureau of Investigation, the Milwaukee Police Department, the Milwaukee County Sheriff’s Office, and the U.S. attorney’s office- will start their efforts in Milwaukee County (read more here). DCF is also adding ten new licensors to the Southern Region, who will have smaller case loads and will focus on monitoring providers with licensing violations.

For WECA’s response to fraud in the Wisconsin Shares program, read our op-ed here. We want to know what your response is as well. Leave a comment below to share your opinion.

3 Early Ed Bills Advance

Early Learning Challenge Fund
Last Thursday, September 17, the US House of Representatives passed the Student Aid and Fiscal Responsibility Act (H.R. 3221) with a vote of 251 to 171. This bill restructures student loan procedures, uses the savings to invest in other areas of education, and includes substantial investments in early childhood education through the Early Learning Challenge Fund. The fund will offer competitive grants to states to enhance the quality of early learning for children ages birth to five. Secretaries Duncan and Sebelius have posted a response to the passage of the bill. You can read it here. A version of this bill is expected to be considered by the Senate soon.

Changes in Five-Year-Old Kindergarten Requirements
On Wednesday, September 16, the Wisconsin Assembly passed AB119- a bill that would change current mandates regarding enrollment in, and completion of, 5-year-old Kindergarten. Beginning in 2011-2012, completion of 5-year-old Kindergarten would be a prerequisite for entering first grade in any public or charter school. School districts would be allowed to make their own rules for parents and guardians to receive an exemption from this mandate. Along with enrollment and completion requirements, the bill would also call for regular attendance by 5-year-old Kindergarten students throughout the school year. On September 22, the bill was concurred in by the Senate with a vote of 17-15.

Changes in Child Care Fraud Liability
On Thursday, September 17, the Wisconsin committee on Children and Families and Workforce Development in the Senate unanimously passed SB280 out of their committee and on to the full Senate. In the bill, if a child care provider commits fraud within the Wisconsin Shares subsidy program, is part of a corporation or limited liability company, and is unable to pay back what they owe, then any person who holds 20 percent or more of ownership interest in the child care facility and who has control of/responsibility for the business may be personally liable. The Assembly Committee on Children and Families will hold a public hearing on the bill (AB412) on September 30, 2009 at 11:00 AM in Capitol room 400 Northeast.

Statewide Fraud Task Force Announced

Last Friday, September 11th, county and state officials announced the creation of the Child Care Anti-Fraud Task Force. Several organizations- including the Department of Children and Families, Milwaukee County District Attorney’s Office, Department of Justice’s Division of Criminal Investigation, Federal Bureau of Investigation, Milwaukee Police Department, Milwaukee County Sheriff’s Office, and U.S. attorney’s office- will partner together in an effort to curb fraud in the Wisconsin Shares child care subsidy program. According the Department of Children and Families, the task force will start its efforts in Milwaukee County, as 58 percent of Wisconsin Shares funding is allocated there.

The creation of a fraud task force comes after a series of stories in the Milwaukee Journal Sentinel profiling cases of excessive fraud within the system. In one case, a Milwaukee couple- Willie and Pamela Kohlheim- has been indicted by a federal grand jury. The Kohlheims ran multiple day care centers in Milwaukee and may have fraudulently filed for bankruptcy. The pair is thought to have committed fraud in the Shares program as well. Read more about this story here.

Since its creation last year, the Department of Children and Families has taken aggressive steps in stopping fraud in the subsidy program. 98 providers have had their licenses revoked and a 5 person program integrity task force has been formed. The department is also working with legislators to create and pass laws that prevent fraud and hold providers accountable for their actions (The proposed Senate Bill 280 is one example).

Committee will Meet to Discuss Wisconsin Shares Audit Findings

The Joint Legislative Audit Committee has scheduled a public hearing to discuss the results of an audit of the Wisconsin Shares child-care subsidy program. The hearing will take place on August 4th at 1pm in Capitol room 411 South. Can’t be there but want to watch the action? The hearing will be broadcast live over the internet on the committee’s website.

In June, the Legislative Fiscal Bureau (LFB) published the first part of their audit of the Wisconsin Shares program. You can view the report here. Overall, the LFB estimated that between $16.7 and $18.5 million of improper payments were sent out in 2008. They recommended that the Department of Children and Families (DCF) should improve eligibility verification procedures for families applying for Shares and better ensure that providers receiving Shares remain eligible and comply with child care laws and policies. Link here to our earlier blog entry to hear more about the audit findings and WECA’s response.

Budget Passes Assembly, Signed by Governor Doyle

The Conference Committee version of the Wisconsin state budget passed through the Assembly on Friday evening with a vote of 51-46. This version of the budget, along with a comparison with the original Senate and Assembly versions, can be viewed here. This joint version allocates $1,500,000 in 2010-2011 for 4-year-old Kindergarten start-up grants (in addition to the $3,000,000 that is allocated in 2009-2010). It also limits the total number of hours a child can receive child care under Wisconsin Shares to 12 hours per day. Some exceptions can be made- with proper documentation- to extend this limit up to 16 hours per day.

Governor Doyle received the current version of the budget and signed it into law today at 11:00am. He also issued a public statement discussing his veto choices that have been added to the budget. You can read that document here. Included in his vetoes are changes to how hours are authorized within the Wisconsin Shares child-care subsidy program and the circumstances under which the Child Care Program Integrity Unit can investigate a child care provider’s use of Shares funding. These changes are discussed in detail on pages 13 and 14 of the Governor’s veto message. To overturn any one of Doyle’s vetoes, the Legislature needs two-thirds of its members to oppose it.

Conference Committee Budget Passes Through Senate

Late last night, the Conference Committee presented a revised budget to the Senate. This joint version allocates $1,500,000 in 2010-2011 for 4-year-old Kindergarten start-up grants. This is a change from both the Senate and Assembly versions of the budget. The joint version also limits the total number of hours a child can receive child care under Wisconsin Shares to 12 hours per day. Some exceptions can be made- with proper documentation- to extend this limit up to 16 hours per day. This section remained from the Senate version of the budget.

Because no amendments are allowed at this stage in the process, the new budget passed quickly throught the Senate with a vote of 17-15. The Assembly is expected to vote on the conference committee version of the budget tonight around 8:30pm. The newest version of the budget, along with a comparison with the original Senate and Assembly versions, can be viewed here.

If the budget passes through the Assembly, it will be sent to Governor Doyle. He can then use his partial veto power to change any section he would like. To overturn any change made, the Legislature needs two-thirds of its members to vote against it.

State Budget: Senate Version

On Wednesday, June 17th, the Senate passed their version of the Wisconsin state budget with a vote of 17-16. The Senate budget makes two important early education funding changes to the Joint Finance Committee’s recommended budget. Neither of these changes were present in the Assembly budget. First, the Senate version allocates an additional $3,000,000 in 2010-2011 for 4-year-old Kindergarten start-up grants. Second, it limits the total number of hours a child can receive child care under Wisconsin Shares to 12 hours per day. Some exceptions can be made- with proper documentation- to extend this limit up to 16 hours per day.

The Legislative Fiscal Bureau put together a helpful summary that compares the Senate and Assembly versions of the budget. You can read the document here. Once a committee is formed, leaders from the Senate and Assembly will be meeting to iron out differences in the two budget versions. The legislature hopes to pass a budget that can be signed into law by the Governor by July 1, 2009.

Wisconsin Shares Audit Finds Improper Payments

Last week, the Legislative Fiscal Bureau (LFB) published the first part of their audit of the Wisconsin Shares child-care subsidy program. Another report was published on child-care subsidy fraud in Milwaukee County alone. Overall, the LFB estimated that between $16.7 and $18.5 million of improper payments were sent out in 2008. They recommended that the Department of Children and Families (DCF) should improve eligibility verification procedures for families applying for Shares and better ensure that providers receiving Shares remain eligible and comply with child care laws and policies. Read DCF’s response to the audit’s findings here.

Wisconsin Early Childhood Association (WECA) joins the many legislators, organizations, and taxpayers who are outraged by the fraud found in the Wisconsin Shares child-care subsidy program. However, we are concerned that recent stories featuring child care providers who are “scamming the system” have placed the entire child care field in a negative spotlight. We know that fraud is costing the state millions of taxpayer dollars, but we also know that 95% of child-care subsidies are going to providers who are following the rules. There is no one more committed to efforts to eliminate fraud than the thousands of high-quality providers around the state who serve children in the Wisconsin Shares program.

We are confident that the potential savings from fraud reduction can be used to improve the quality of early education in Wisconsin by creating a quality rating and improvement system that offers incentives to high-quality providers and resources to those who wish to improve.

New Motion Passed for Child Care Funding

Early this morning, the Joint Finance Committee passed a revised version of funding for ECE programs. Although parts of the motion are unclear, there are some obvious changes being made. To view the governor’s original proposed budget, visit an earlier blog entry here.

• The Wisconsin Shares child care subsidy program: The new motion allocates $386,112,600 in fiscal year 2010 and $401,996,800 in fiscal year 2011.
• Shares cost containment measures: The new motion eliminates increases in copayments and a potential waiting list. The motion also: freezes reimbursement rates for providers until June 30, 2011; includes child support payments when determining eligibility only if the amount of child support is more than $1,250 per month; and implements a measure that would adjust the number of hours authorized for child care, rather than basing provider reimbursements on attendance.
Quality Rating System: The new motion eliminates funding for the QRS but does not eliminate the provision.
Quality programs: The new motion reduces funding by $944,800 in 2009-10 and $1,653,700 in 2010-11 for child care quality programs overall. It does not mention funding levels for any specific programs (like T.E.A.C.H. or R.E.W.A.R.D.) other than for Resource and Referral Agencies. This reduction in quality program funding DOES NOT necessarily mean that T.E.A.C.H. or R.E.W.A.R.D. will have reduced funding. At this time, we do not know if funding will be decreased, increased, or remain the same.
Licensing fees: The new motion keeps the Governor’s recommended increase in licensing fees from $10.33 per child to $16.94 per child (for group centers that provide care for nine or more children).

We will update the blog when we know more specifics on the motion passed by the Joint Finance Committee. You can read the entire motion here.

Early Education Budget Discussion Could Happen Today

Yesterday’s Joint Finance Committee meeting was cancelled late in the evening. They were scheduled to discuss the child care topics within the proposed budget for the Department of Children and Families. The committee has announced that they will be meeting today at 12pm and may discuss items including: the Wisconsin Shares subsidy program, the quality rating system, the R.E.W.A.R.D. ™ WISCONSIN stipend program, and the T.E.A.C.H. Early Childhood® WISCONSIN scholarship program. You can view the entire list of topics here (and a detailed version of child care topics here) and watch the meeting live on the Wisconsin Eye website.

Although the meeting is scheduled to begin at 12, it may be postponed until later in the day. With the long list of agenda items, it is uncertain when the child care items will be discussed. Follow the Wisconsin budget blog for up to the minute happenings- and newly revised start times- at this, and every, Joint Finance Committee executive session.