Investigation finds 'weaknesses' in Minnesota DHS' ability to detect child care fraud

The Office of the Legislative Auditor is calling for changes in the child care program.
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Further investigation into Minnesota's Child Care Assistance Program (CCAP) has found "weaknesses" in the Department of Human Services' ability to detect and prevent fraud.

That's the finding of the Office of the Legislative Auditor, which was asked by several Minnesota lawmakers to carry out a limited review of the $254 million CCAP after it released the findings of another investigation into the program last month.

In the earlier report, the auditor's office found that claims CCAP was being defrauded to the tune of $100 million were exaggerated, and it also couldn't substantiate claims that child care money was funneled to terror groups in Africa.

However, it did say that the level of fraud was likely higher than the $6-7 million identified by prosecutors in recent years, and the fallout from the initial report saw DHS inspector general placed on leave after there was found to be internal struggles at the department.

In the report released on Wednesday, investigators concluded there were "weaknesses in DHS’s program integrity controls and concluded that both DHS and local human services agencies must do more to effectively prevent, detect, and investigate fraud in CCAP."

Among other criticisms, investigators found the DHS and county agencies "did not sufficiently leverage independent, external data sources" to verify if recipients were eligible for CCAP funding to help them pay for child care.

CCAP is intended to provide assistance to low income families, helping them pay for child care so they can pursue employment or education, but in some instances recipients have "misrepresented" their work or education activities in order to qualify.

It also found the DHS had "weak processes to validate that CCAP provider billings aligned with actual child care provided."

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That comes after several instances in recent years in the Twin Cities where child care providers were found to be defrauding the system by enrolling CCAP recipients onto their books and claiming government funding for them, but not actually providing any care for them.

Among the recommendations for improvements to the system is a call for the Minnesota Legislature to direct the DHS to implement "real-time electronic reporting of child care attendance for CCAP."

It's calling for enhanced verification of independent sources to check that CCAP recipients are pursuing work/eduction prospects while receiving assistance.

And it also recommends ensuring child care facilities are subjected to annual inspections, as is required under state and federal law. This comes after finding some had not received inspections, though the DHS had implemented "enhanced monitoring" of high-risk providers.

You can read the full report here.

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