LANSING – House Democrats today unveiled a comprehensive legislative package that boosts accountability, cracks down on fraud and error in the state's Child Day Care (CDC) services program, and increases access to jobs. The plan increases child safety by reversing practices that were put in place in 2001, which have resulted in a lack of oversight and a dramatic increase in fraud and error in the state's day care program. A recent internal Department of Human Services (DHS) review brought to light the problems with the current day care program. The department then asked the legislature to work with DHS to implement reforms.
"The 2001 changes made to day care eligibility determination and payment authorization have left the department with a diminished ability to oversee clients and day care providers to verify that they're doing the work they're billing the state for," said State Representative Dudley Spade (D-Tipton). "These changes have proven disastrous to families and to job accessibility. That's unacceptable -- we cannot continue with a system that provides limited ability to track where taxpayer money goes. The money we save preventing fraud can be invested back into the day care system, which will save taxpayer dollars and increase access to jobs."
DHS day care services are provided to qualified families when the parent is unavailable to provide care because of school; participation in an approved treatment program; a physical, emotional or mental condition; or approved employment-related activities. The goal of this program is to keep families together and to promote the family's self-sufficiency and job accessibility by providing safe, affordable, accessible child care. On average, there are more than 112,000 Michigan children receiving day care services.
"To get Michigan working again, we must provide access to quality day care to parents," said State Representative Pam Byrnes (D-Lyndon Twp.). "Fraud is not only costing tax payers millions of dollars, it's hurting honest caregivers. And if parents aren't confident that their children are being well cared for, they may be hesitant to seek work. Establishing training requirements is a proven way to increase the quality of child care. Our plan will put an end to waste and overbilling while ensuring that our kids are safe."
In 2001, a greatly reduced DHS workforce was told they must do more with less. That included losing the ability to oversee the reporting of care hours by day care providers. Instead of having to submit a biweekly "timecard," day care providers now simply pick up the phone and punch in the hours of care they have given. There is currently not enough DHS oversight to verify if the hours providers are submitting are accurate.
Taking away the department's ability to hold providers and clients accountable has resulted in a huge increase in fraud and error. In FY 2001, the state confirmed 354 cases of day care fraud, which cost the state $711,878. In FY 2007, the state confirmed 1,639 cases of day care fraud, which cost almost $9 million.
"What we're seeing is that we can't just haphazardly cut and cut from the department's budget and expect the same level of oversight and quality of care for our children," State Representative Tim Melton (D-Pontiac). "Studies show that one of the top barriers to finding employment is lack of day care. 'Welfare to Work' has mandated that parents must go to work if they are able; now we must give DHS the tools to improve day care to make it as safe and efficient as possible."
The day care legislation will:
- Require parent or guardian documentation of work, school or other qualifying activities to prove paid care hours are, in fact, needed.
- Require DHS to monitor time and attendance records.
- Require DHS to determine if a child is eligible for the state's day care program every six months. Currently, "redetermination" occurs only once per year.
- Require DHS to go after money owed to the state due to fraud and encourage prosecution of those responsible for defrauding the day care program.
- Restrict day care payments made to people living in the child's home.
- Give DHS the authority to perform enhanced background checks on day care providers.
- Establish training requirements.
- Limit the number of children one day care provider can care for.
- Require the completion of a health and safety checklist by day care providers.
- Require DHS to provide qualifying parents with direct assistance and/or counseling in choosing child care and other educational resources for their child.