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15 percent

January 26, 2012

A state comptroller audit of the childcare assistance program administered by the Department of Human Services found that 15 percent of children enrolled in the program are ineligible based on family income. The program is limited to participants who earn no more than 200 percent of the federal poverty level, or $37,060 a year for a family of three.

The audit estimates that more than 4,000 eligible children currently on a waiting list of 8,000 could be receiving childcare if the ineligible families were removed from the program.

The $124 million program administered by the Division of Family Development (DFD) of DHS is jointly funded by the state and federal governments. It is aimed at providing working parents or parents attending school with subsidized childcare through 140 state-licensed centers. To be eligible for the program, families are required to fill out applications that detail their residency, employment, and wage status.

DFD pays an outside agency $421,000 a year to confirm income status on a quarterly basis. However, the audit found that DFD does not use the reports to qualify participants.

Although misrepresentation of income appears to be a chronic problem -- one family reported income of $18,200 on their application and $94,075 on their income tax return -- there were other issues discovered. Caseworkers often placed children in the system using the Social Security number 999-99-9999, indicating that the children may have no social security numbers, which is required to prove legal status. (DFD has been found to overlook this in other programs as well, according to the audit, and thus is responsible for overpaying more than $14 million in subsidies.) DFD was also paying subsidies to childcare centers for absent or non-existent children, which the audit said could be costing the state about $6 million a year.

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