The Washington State Auditor's annual report highlights weaknesses in the child care subsidy payment system, estimating $37 million in questionable payments. The audit reveals concerns about documentation and overbilling, prompting recommendations for stricter oversight.
The Washington State Audit or's Office has unveiled the findings of its annual Single Audit, revealing significant weaknesses in the state's system for monitoring and preventing improper payments within its subsidized child care programs. The audit, conducted on $23.7 billion in federal funds across 28 programs, highlighted an estimated $37 million in questionable payments in 2025, primarily stemming from issues within the Department of Children, Youth, and Families ( DCYF ).
While the audit acknowledged an overall improvement in compliance with federal requirements, the specific issues in child care subsidy oversight raised considerable concern and prompted recommendations for immediate action. The State Auditor, Pat McCarthy, emphasized the importance of safeguarding child care funding for working families and providers, stating that additional steps are needed to detect and prevent improper payments and preserve resources.\Key issues identified in the audit included providers failing to furnish attendance records, overbilling for services without adequate documentation, and a lack of required signatures from parents or guardians. These findings were derived from audits focusing on the Child Care Development Fund (CCDF) and Temporary Assistance for Needy Families (TANF) programs. Auditors estimated that $27.2 million in questionable payments were made through CCDF funds and an additional $9.9 million through TANF funds. The DCYF's current system relies heavily on post-payment audits to identify discrepancies, rather than implementing pre-payment controls to verify supporting documentation before payments are issued. The audit noted that while the department's internal audits have identified overpayments, the current approach is insufficient. For instance, the State Auditor's Office found that 67% of the department's own audits revealed overpayments, totaling $2.2 million. The State Auditor's Office recommended that the DCYF improve oversight measures until it is capable of integrating stronger pre-payment controls. Despite the issues surrounding child care payments, the Single Audit showed overall progress, with 50 findings compared to 82 the year before.\Additionally, the audit also identified problems related to the implementation of internal controls for ensuring that some providers meet health and safety standards. In response to the audit's findings, the State Auditor's Office is urging the DCYF to promptly enhance its procedures. The audit specifically focused on an area that was previously impossible to monitor since fiscal year 2021. The ability to monitor returned in 2025 because DCYF made fewer accounting adjustments than in previous years, which enabled auditors to accurately trace payments to their sources. Beyond the child care related findings, several unrelated news items were included in this press release. Those include: the discovery of traces of drugs, including cocaine, in shark species, a traffic incident blocking all lanes on State Route 16 near the Tacoma Narrows Bridge, and a drone scare that caused a ground stop and prompted the response of helicopters near Air Force One at PBI airport. The findings of this audit underscore the necessity of strong accountability within state agencies. The Auditor’s Office remains committed to providing transparency through audits, and to assisting agencies with improvements. The State Auditor, McCarthy, acknowledged the commitment to accountability from the Governor and his team
Washington State Audit Child Care Subsidies Improper Payments DCYF Audit Findings
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