More Effort is Needed to Protect the Integrity of the Child Care and Development Fund Block Grant Program

WHY WE DID THIS STUDY

The Child Care and Development Fund (CCDF) block grant program is a Federal-State partnership to provide eligible, low income families with help paying for child care at a provider of their choice. Within the CCDF program, OIG has previously identified fraud, found improper payments, and exposed health and safety concerns at child care facilities. In addition, CCDF has been identified as a Federal program that is susceptible to significant improper payments, with an estimated $311 million in improper payments identified for fiscal year (FY) 2015. This report focuses on how States and the Administration for Children and Families (ACF) ensure the integrity of the CCDF block grant program and the results of States' program integrity activities. This work is part of an initiative that OIG is undertaking to address vulnerabilities in grant programs across the Department of Health and Human Services.

HOW WE DID THIS STUDY

OIG analyzed data from an online survey sent to all States requesting information on their program integrity activities, antifraud measures, and program integrity results for FY 2015. OIG also analyzed data from States' CCDF plans that covered FY 2015 and States' most recent Error Rate Reports. In addition, OIG interviewed ACF Office of Child Care staff about ACF's oversight of States' program integrity efforts, including how ACF determines States' compliance with their program integrity plans.

WHAT WE FOUND

We found that States differed in the scope of CCDF program integrity activities and varied substantially in the degree to which they conducted specific program integrity activities, as shown in Figure 1. In addition, not all States performed important antifraud activities, and few States notified ACF and other States about suspected fraud.

Many States reported no results or did not know the results of their CCDF program integrity efforts in 2015, including their numbers of program violations and errors, referrals to law enforcement, and client and provider disqualifications, as shown in Figure 2. States identified payment error rates ranging from less than 1 percent to 36 percent, but almost half of States did not expect to recover any improper payments identified as a result of their error rate reviews. States identified limitations in technology, resources, and coordination as top challenges to ensuring CCDF program integrity. In its oversight of State activities, ACF focuses more on technical assistance than compliance. ACF does not have a process to ensure that States carry out planned program integrity activities nor does it collect information about the results of these activities.

WHAT WE RECOMMEND

We recommend that ACF: (1) request that States examine the effectiveness of their program integrity and fraud fighting activities, (2) examine with States the benefits of expanding program integrity and fraud fighting activities, (3) establish routine communication to share program integrity and fraud fighting best practices, and (4) determine the feasibility of requiring all States to report information about the results of their program integrity and fraud fighting activities. ACF concurred with all four recommendations.