Wisconsin Day Care Centers: Fraud or Honest Mistakes?

Wisconsin Day Care Centers: Fraud or Honest Mistakes?

The story behind the scandals

By Lisa Kaiser

Is the state going too far in its crackdown on state-subsidized day care providers?

According to the Milwaukee-based United Alliance of Day Care Providers (UADCP), that answer is yes.

“Unfortunately hundreds of parents and their children have been affected negatively by these rash decisions to have emergency meetings, changing policy and laws without advance notice to providers and parents,” the group stated in an Oct. 20 letter to elected officials.

In recent months, the state Legislature has enacted sweeping changes in the $385 million Wisconsin Shares program. That program subsidizes day care payments for families in Wisconsin Works (W-2), which was launched during Republican Gov. Tommy Thompson’s tenure in the 1990s. Without that subsidy, struggling parents could not afford to pay for child care while they’re at work or going to school. Many day care centers opened as a result, especially in under-served areas in Milwaukee, and the program grew by leaps and bounds.

Like Milwaukee’s voucher school program, which was also launched during the Thompson era, scant quality control or administrative oversight was built into the taxpayer-funded Wisconsin Shares from the beginning.

As a result, the state Legislative Audit Bureau estimated that up to $22 million was improperly paid to day care providers in 2008. The Milwaukee Journal Sentinel launched an investigation into what it called fraud, and the state Legislature responded by granting the Department of Children and Families (DCF) enhanced powers to cut off payments to day care providers it believes received overpayments or committed fraud. In just a few weeks, more than 100 day care providers were kicked out of the program, because DCF “reasonably suspects program violations.”

But day care providers contend that the state has unfairly targeted day care centers in the city and have been suspending centers based on suspicion of fraud, not proof.

“UADCP members have been loyal partners with Milwaukee County, [the] state of Wisconsin, and the greater Milwaukee community upon conception of W-2,” the letter states. “We believe it is shameful the way the state and county have been treating these providers whose participation was critical to the success of the W-2 program.”

But DCF spokeswoman Stephanie Hayden said the department is only going after providers who it suspects have committed more than $10,000 worth of fraud.

“We’re making sure that taxpayer dollars are being used for hard-working, low-income people so they can have access to the Shares program,” Hayden said.

Guilty Until Proven Innocent?

State Rep. Tamara Grigsby, who has been an advocate for the child care providers in the Wisconsin Shares program, agrees that the state should identify and punish those who are intentionally defrauding the system.

But Grigsby also wants DCF to identify clerical errors made by day care providers and help bring those providers back into compliance. In fact, Grigsby inserted language into this summer’s legislation that would have allowed the state to go after providers that were suspected of committing “egregious or intentional fraud.” But the governor stripped out the term “intentional,” allowing DCF to go after what it suspects is egregious fraud.

“They now have free rein to just go after anyone who may have made a mistake,” Grigsby said.

But many day care providers feel that they’ve been unfairly targeted and forced to shut down based on suspicion of fraud when, more accurately, they’ve simply made clerical errors or have sloppy record keeping.

Attorney N. Lynette McNeely, legal redress chair for the Waukesha County Branch of the NAACP and an advocate for the day care providers, argues that the real problem with the program lies in inconsistent state and county administration and oversight, not with the day care providers themselves. She said many day care providers don’t realize they’re not in compliance until they’re suspended by the state, and they’re given no ability to correct their violations before suspension. Nor did the state or county give them much guidance on best business practices or compliance after they were admitted to the program.

“They’re suspending first, then asking questions later,” McNeely said.

Since the mass suspensions, six day care providers, four of them in Milwaukee County, have been reinstated after investigators found no fraud.

Barbara’s Story: Sabotage?

Take “Barbara,” for example, who asked that the Shepherd not print her real name because she is appealing her suspension and fears retaliation by the state.

Barbara had operated two day care centers in Milwaukee for more than a decade. On Sept. 18, when Barbara was traveling between her facilities, investigators stopped by one of her centers. The manager did not let them in. The investigators—who, the manager told Barbara, did not show identification—asked for the center’s attendance records. The manager did not want to turn over the records to strangers, so she told them the records were locked up.

The investigators reported that there were no children on site, yet Barbara and her manager say there were. DCF also reported that the center had attendance record violations twice before, in April 2009 and May 2008, and that licensers could not access the center on three other occasions. Barbara contends that the licensers did not come to her facility on those dates.

Barbara’s payments were cut off the day the investigators showed up at her day care center, but she didn’t find out until she saw her name in the paper on Sept. 23. The letter from the state informing her of her suspension arrived the next day.

Barbara said she called DCF to plead her case.

“I told them the [investigators] never set foot in my place and if they had they would have seen kids running toward the door,” Barbara said. “How did they go back and say there were no kids in attendance when they were there? They were told that my attendance records were locked away and they’d have to wait for me to get back. I was only five minutes away. They could have waited. It seemed more like they were sabotaging day cares and not trying to get the real information.”

Barbara is now appealing her case, but the system is overwhelmed. Her Nov. 9 phone hearing with an administrative law judge went nowhere because the attorney representing DCF didn’t have her paperwork in order.

“This is the only thing that providers are left to do,” Barbara said. “You put in paperwork and you sit back and wait and wait. Then you have a 10-minute phone conversation and you wait and wait again.”

Barbara was told that the appeals process could take up to eight months. In the meantime, one of her day care centers has shut down and her employees are out of work.

She had another meeting with the state’s attorney this week, and was unable to come to a resolution.

“They’re not trying to settle anything,” Barbara said.

A clarification regarding which providers DCF is targeting: DCF is targeting anyone who is committing fraud in any amount. One indicator is whether a provider is receiving more than $11,000 per "slot"—not, as I stated, providers who DCF suspects has committed more than $10,000 worth of fraud. Sorry for the confusion.--LK

POST A COMMENT

anonymous

"Barbara?" Really? It is obvious that no one at the Shepherd actually READ the Journal's excellent reporting (foreign word at the Shepherd?) on the rampant day care fraud in Milwaukee. The Journal, while still a left-wing rag, actually did a great job on this particular issue. What made it great were these "things" that were in the articles- facts, figures, names, quotes, verified statements, court records- all those things that you use when you want to "prove something". The state says there were no kids there, "Barbara" says there were. That is NOT a news story, those are not "facts", and this is not worth the paper it's printed on. Once again the Shepherd proves that if a minority is involved, the liberal left will tolerate and defend any transgressions. Is that really good for the inner-city residents who are paying taxes to these day-care scammers? Why don't you ever defend law-abiding citizens who are being taken for a ride by these scumbags...

anonymous

I don't think that it is fair, and neither do I think it's right.

My children are in enroll at a daycare that is now under investigation and I just recieved that letter today from the county services. I work everyday so now what am I to do with something so sudden. This problem is affecting all of those who need the state for childcare services. It's SO SAD COME ON NOW>>>