Report No. 2007-87
December 2007

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Better Procedures Needed To Eliminate Overpayments and Evaluate Efficiency

The Department of Social Services (DSS)'s failure to adhere to established controls, DSS's poorly written contracts with child care facilities, and a lack of adequate communication between the Department of Elementary and Secondary Education (DESE) and DSS resulted in potential overpayments to child care facilities totaling at least $969,305. Significant improvements are needed to ensure child care facilities actually create the additional capacity to care for children. The DSS lacks an adequate system to track program data and produce management reports to analyze the effectiveness of programs. DESE and DSS have not conducted on-site monitoring of child care facilities as often as necessary.

Failure to adhere to controls, poorly written contracts, and lack of communication led to overpayments

DSS's failure to adhere to established controls, confusing and ambiguous contracts with DSS child care facilities, and a lack of adequate communication between DESE and DSS resulted in overpayments. Both DESE and DSS provide grants to child care facilities to create or expand the capacity of quality early childhood programs for children. Based on an analysis of the contractual requirements for each of these facilities and the licensing history provided by the Department of Health and Senior Services (DHSS), our audit found 5 of 16 facilities tested did not create the required increased capacity. (See page 10)

DSS did not adequately measure program performance

The DSS did not have an adequate system in place to track program data and produce management reports that would allow DSS to assess the effectiveness of Early Childhood Development, Education, and Care (ECDEC) programs and ensure program goals are met. The DSS has created a computerized database to enter periodic reports and invoices. However, program staff have not entered data as required and we found the database was incomplete and inaccurate. DSS staff stated that the database is not user friendly, the information maintained is not useful, and due to current work loads, staff do not have time to enter program data. (See page 15)

Increased on-site monitoring could help ensure compliance

The state has not monitored ECDEC contractors as frequently as necessary to ensure monies are spent in accordance with contractual requirements. Neither DESE nor DSS have created an on-site monitoring policy. In addition, due to other staffing priorities, on-site monitoring has not been conducted as often as officials have determined necessary. (See page 16)

Efficiency may be improved if fewer agencies administered programs

Programs may be administered more efficiently and effectively if fewer departments were involved. Currently, ECDEC funded child care programs include DSS (for children ages birth to 3), DESE (for children ages 3 to 5), and DHSS for licensure purposes. As a result, child care facilities are subject to regulation and monitoring visits from at least two and possibly three state departments. (See page 18)

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