Posted on by Chad

MN Child Care Fraud Rampant

Conservative House Republicans today responded to a report on the fraud-plagued
Minnesota Child-Care Assistance Program (CCAP). They requested federal investigations, the firing of the state Investigator General overseeing the program, the creation of an independent watchdog office for taxpayers, and a new approach to child care services in the state. “The daycare fraud is the biggest scandal in Minnesota history, and the state government cannot even tell us how much has been stolen,” said Rep. Steve Drazkowski (Republican- Mazeppa). “We need action on every front.”

Child care

The New House Republican Caucus (NHRC) responded to a report by the Office of the Legislative Auditor (OLA) which admitted that millions of dollars have been stolen from the CCAP program. However, the OLA could not begin to assess how much money had been stolen from taxpayers.

The OLA report quoted a whistle-blower who wrote that both the Supervisor and Manager of the anti-fraud unit of CCAP, “believe that the overall fraud rate in this program is at least 50 percent of the $217 million paid to child care centers in 2017.”

  1. CALL FOR FEDERAL INVESTIGATIONS: The four conservative Republicans announced they are asking federal investigators from the U.S. Department of Justice, the U.S. Department of Human Services, and the United States Attorney for Minnesota to investigate and prosecute what is alleged to be over $100 million per year of fraud in CCAP. “We have contacted Attorney General William P. Barr, U.S. Attorney Erica H. MacDonald in Minneapolis, and DHS Inspector Daniel R. Levinson to get them on the case,” said Rep. Tim Miller (Republican-Prinsburg). “This is a federal case because much of the CCAP money comes from Washington.” The legislators want the federal Department of Homeland Security to investigate media reports that suitcases filled with up to $1 million each have been carried through the Minneapolis/St. Paul airport to Somalia or the Middle East by persons allegedly linked to CCAP providers. They want a list of the names, addresses and destinations of travelers leaving the country from Minnesota who signed a form to export at least $10,000 in cash.
  2. CUT PORK, CAN HAM: “The watchdog over CCAP fraud has been sleeping on the porch for years,” said Rep. Cal Bahr (Republican-East Bethel). “Governor Tim Walz should ask for the resignation of Minnesota DHS Inspector General Carolyn Ham today. If she does not resign, he should fire her.” The OLA report showed that prosecutors had many problems with the DHS investigators under Ham. Video evidence to prove that child care centers were overstating the number of children
    they were watching was inconclusive. Financial analysis was sometimes not performed by accountants or Certified Fraud Examiners. Investigations would drag on for years before detectives would consult prosecutors.
  3. CREATE INDEPENDENT WATCHDOG ON WELFARE: “We cannot trust oversight of scandal-plagued programs from the Department of Human Services to an inspector general who reports to political bosses at DHS,” said Rep. Jeremy Munson (Republican-Lake Crystal). The NHRC will work to establish an independent Bureau of the Public Trust to inspect all the books of welfare-related programs such as CCAP and Medical Assistance. This new agency will be financed through existing funds taken from the Minnesota Department of Human Services’ budget. “We need an independent auditor to serve the goal of fiscal responsibility and the needs of both the taxpayers and the program recipients,” Rep. Munson said.
  4. STOP THE CRIMES AND THE CRIMINALS: The NHRC members outlined their plans for a sweeping bill to end the crime spree on child care programs. “These may seem like band-aids, but they will help to stop the bleeding,” said Rep. Bahr.

The bill will:
 Make child care fraud a specific crime with criminal and civil penalties;
 Establish a life-time welfare ban for convicts;
 Require future child care providers to repay any subsequent fraud;
 Ban care providers from programs if they do not cooperate with investigators;
 Allow the Bureau of the Public Trust to check recipients for eligibility;
 Ban all forms of benefits for persons convicted of child care fraud and;
 Bar parents of recipient children from working at child care centers.

  1. GET RID OF CCAP AS WE KNOW IT: “CCAP is the perfect blueprint if you want a plant to steal money from taxpayers,” said Rep. Drazkowski. “You cannot prove who the program actually serves You cannot verify the people who are being helped. There is no independent oversight of the payments and services.” To replace CCAP, the NHRC will streamline and simplify the other five child care programs operated by the state. The rules need to be easier for adults who want to look after the children in their neighborhood. Lower any legal barriers. Don’t pay subsidies to providers. To fight corruption, pay the subsidies directly to the parents. that need help with daycare expense. The parents can then pay the care-takers. “We can design better programs with more accountability, flexibility and fairness,” Rep. Bahr, “not just for recipients and providers. For the hardworking people of Minnesota who go to work every day and don’t get any child care benefits,” Rep. Bahr said. “We want working parents to have access to quality and affordable child care,” said Rep. Miller. “We can do that by cutting regulations, empowering parents, and protecting taxpayers.”