Not All of Missouri's Child Care Subsidy Program Payments Complied With Federal and State Requirements

The Missouri Department of Social Services (State agency) did not always comply with Federal and State requirements when making payments under its Child Care subsidy program for State fiscal years 2014 and 2015. Client attendance records were not adequately documented for 124 of the 128 provider service months in our statistical sample; childcare payments made for claims in those 124 provider service months were therefore unallowable. (A provider service month includes all childcare payments paid to a childcare provider for a single month of service.)

The State agency did not exercise sufficient oversight over its Child Care Subsidy program. Specifically, the State agency relied on attendance records that were maintained by providers and whose completeness and accuracy were not always verified by the client's parent or adult designee, did not have sufficient policies and procedures to ensure that it obtained attendance records from providers that were no longer in business, and had only recently implemented an additional mechanism to conduct reviews and recommend training to providers found to have inadequate documentation practices.

On the basis of our sample results, we estimated that at least $19.1 million (Federal share) of the Child Care Subsidy program payments that the State agency made did not comply with Federal and State requirements.

We recommended that the State agency refund the estimated $19.1 million (Federal share) of Child Care Subsidy program payments to the Federal Government. We also recommended that the State agency strengthen its controls and oversight activities to ensure that providers maintain required attendance documentation to support the childcare payment amounts that they claim for reimbursement, and that it develop policies and procedures to ensure that it obtains attendance records from providers that are no longer in business.

The State agency concurred with our second recommendation and described corrective actions that it had taken or planned to take. The State agency did not concur with our first and third recommendations. Based on additional documentation that the State agency provided after issuance of our draft report, we revised a portion of the discussion of our finding and the associated dollar amounts for this final report. Otherwise, though, we maintain that our findings and the associated recommendations remain valid.