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Performance Audit of the Suitability of Child Development and Care Program Providers and Performance Audit of Child Development and Care Program Payments

Receive AOPTA Award for Six-Month Period - Ended December 31, 2008

Scott Strong, Deputy Auditor General, is pleased to announce that the Child Day Care performance audit project is the winner of the Audit Operations Project Team Award (AOPTA) for the six-month period ended December 31, 2008. The audit project generated two audit reports: the performance audit of the Suitability of Child Development and Care Program Providers and the performance audit of Child Development and Care Program Payments. The audit team included Yvonne Benn, supervisor; team members Dawn Anderson, Lori Beltran, Mark Lee, Andy Mitchell, Thomas Ongstad, Sara Schondelmayer, and former employee Renee Johnson-Maybee; Mark Freeman, Audit Division Administrator; and Melinda Hamilton, Audit Manager.

The AOPTA was established in 1992 and is awarded every six months to recognize exceptional efforts of the project teams in the Bureau of Audit Operations.

The performance audits have had a significant impact on the operations of the Department of Human Services (DHS) Child Development and Care Program, both in increasing the potential for the safety of children as well as the financial operation of the Program. The public interest in the reports was very high. There were a significant number of articles written on the reports, including articles in other states. There was, and has been recent, high legislative interest in the report resulting in the Office of the Auditor General meeting with the House Fiscal Agency to discuss the audit report and testifying at a recent appropriation hearing. The reports included 16 material findings and 6 reportable conditions. DHS began corrective action for many of the findings while the audit team was conducting fieldwork because the audit team maintained excellent and timely communication with DHS of the audit issues as they arose.

In the performance audit of the Suitability of Child Development and Care Providers, the audit team reviewed DHS’s processes to perform background checks, including the criteria used by DHS to identify unsuitable providers. In addition, the audit team members performed numerous data matches to determine the effect of the problems they had identified in the review of the processes and criteria. The result was the identification of approximately 1,900 unsuitable child day-care providers that potentially placed approximately 4,600 Child Development and Care Program children at risk.

In the performance audit of Child Development and Care Program Payments, the audit team reviewed case file information for a randomly selected sample of both Child Development and Care grantees (parents) and associated providers, including billing histories, time and attendance records, grantee work schedules, and children school schedules to determine the propriety of the childcare billings and payments. The audit team identified numerous problems with DHS’s oversight of the financial management of the program that resulted in potential improper and, in some cases, potentially fraudulent Child Development and Care Program payments of approximately $232 million.

In DHS’s response to the audits, it indicated that it agreed with the findings and that corrective actions were being implemented. In addition, in the Governor’s 2009-10 Executive Budget, there is a projected cost savings to the Child Development and Care Program of $10 million from the completion of provider background checks, review of cases at high risk for error, verification of the hours of day care needed, and review of the accuracy of provider time and attendance records (all recommendations within the audit reports).

The audit team used innovative and creative methodologies in addressing the identified risks and inefficiencies of the audit. For example, rather than auditing the providers of care and the recipients of care separately, they reviewed them together. The approach provided for a more complete picture of who was providing the care, the parents’ need to receive the day care assistance and the children who were being provided the care. The audit team also evaluated the availability of providers to provide the care they reported by looking to see if they had other employment and determining if the hours of employment conflicted with the hours of care. In addition, the audit team wished to minimize the time it took to obtain copies at the DHS field offices. Consequently, they used cameras to obtain copies of the necessary documentation. This reduced the time it took to review the case files.

The audit team demonstrated exceptional teamwork in completing the audit and the production of the report. Because of the approach taken to review the files, there was a significant need for the audit team members to share information continuously with the other audit team members as to what they were finding. This ability and willingness to work together was evident in the audit results. In addition, the audit team was on top of the audit fieldwork results and able to adjust the planned number of sample items and DHS field visits because sufficient audit evidence had been obtained through a smaller sample size.

In recognition of their selection, the audit team members will be Mr. McTavish’s guests for lunch, will have a letter of commendation placed in their personnel and evaluation files, and will have their names engraved on the AOPTA plaque.

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