A weakness in the system used to detect improper payments in subsidized child care contributed to an estimated $37M in questionable payments.
Washington state auditors say they found weaknesses in the system used to detect improper payments in subsidized child care in its latest annual review of federal spending, contributing to an estimated $37 million in questionable payments in 2025, despite reporting improved overall compliance with federal requirements.
The Office of the Washington State Auditor released its annual Single Audit on Mar. 30, reviewing $23.7 billion in federal funds across 28 programs.Auditors reported a general pattern of improved compliance with federal requirements overall. At the same time, the audit flagged problems in the state’s child care subsidy payment oversight. The State Auditor’s Office said it received inquiries earlier this year from lawmakers, the media, and the public about the potential for fraud in subsidized child care, driven by concerns in other states. “For months, we’ve told anyone who asked about child care subsidies that we were auditing the program and would publicly share what we found,” State Auditor Pat McCarthy said. “Today, we can say that the state should take additional steps to detect and prevent improper payments. By doing so, the state can preserve more child care funding for the working families and providers who depend on that support."The office said it had not been able to audit the state’s use of the federal Child Care Development Fund since fiscal year 2021. Auditors said that changes in fiscal year 2025 were made because the Department of Children, Youth and Families made fewer accounting adjustments than in past years, allowing auditors to trace individual payments to child care providers back to their funding source.They found issues including providers who did not respond to requests for attendance records, overbilled for services not supported by attendance records, or did not provide required signatures from parents or guardians. Based on the sample results, auditors estimated DCYF made $27.2 million in questionable payments using federal Child Care Development Funds. Auditors also reported a related finding in the Temporary Assistance for Needy Families program, estimating $9.9 million in questionable payments to child care providers using those federal funds.The audit said DCYF’s program to detect overpayments needs improvement because the department does not review supporting documentation before paying child care providers, instead relying on post-payment audits to determine whether providers had the required documentation. Looking at a year of the department’s own audits, the State Auditor’s Office found that 67% identified overpayments. Auditors said 22% of the payments reviewed were identified as overpayments, totaling $2.2 million. Those overpayments were submitted to a separate state office for collections, where providers can contest the department’s findings. Based on both the department’s audit results and the statistical sampling, the State Auditor’s Office recommended DCYF expand its oversight efforts until it can implement robust pre-payment controls. The audit also identified issues with internal controls over health and safety requirements for some providers. Despite the child care payment concerns, the State of Washington Single Audit published Mar. 30 showed improvement overall, with 50 findings compared with 82 findings the previous year.“I want to acknowledge the commitment to accountability the governor and his team have shown in improving operations,” McCarthy said. “Audits may surface challenging issues for agencies, but they are critical to maintaining public trust.”Traces of drugs, including cocaine, found in some shark species: study A new study published in the journal Environmental Pollution found traces of pharmaceuticals and illicit drugs in several shark species.All lanes of eastbound State Route 16 near the mid-span of the Tacoma Narrows Bridge are blocked due to a crash.A drone scare at PBI triggered a ground stop and scrambled helicopters Sunday near Air Force One, per a Delta pilot caught on video circulating online.Democrats defended the bill as a step toward tax reform, arguing it would ensure the state’s highest earners contribute more toward public services.
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