Minnesota House Hearing Reignites Concerns About Child Care Fraud


A Monday morning hearing before the House Health and Human Services Committee reignited concerns about fraud within Minnesota’s Child Care Assistance Program (CCAP).

Department of Human Services Commissioner Jodi Harpstead presented her 90-day review to lawmakers Monday morning, but her report didn’t make any mention of what the agency is doing to combat fraud in CCAP.

Rep. Jeremy Munson (R-Lake Crystal) pointed out that federal law requires DHS to “visit every child care center in the state every year.”

“I’m curious to know: in the first 90 days has someone made an unannounced visit to a fourth of the child care centers in the state?” Munson asked.

Commissioner Harpstead, however, said she didn’t “know the current state of how often we visit every child care center in Minnesota” and told Munson she would get back to him.

“She admitted she did not know if they were visiting centers or were compliant with this federal law,” the New House Republican Caucus (of which Munson is a member) said in a press release after the hearing.

The news release also claimed the “agency had failed to visit each center for five consecutive years.” Margaret Martin, a spokeswoman for the New House Republican Caucus, said this assertion was based on claims in reports from the Office of the Legislative Auditor (OLA).

The OLA’s March report on fraud allegations in CCAP revealed that child care centers across the state were being “fraudulently staged for the purposes of obtaining a CCAP license.”

“During pre-licensing inspections, licensors would observe all necessary toys, books, and equipment in place. After becoming licensed, when the same licensor made a follow-up visit, the vast majority of the toys, books, and equipment was not present in the center. Licensors would often see that when parent employee were arriving after the licensors were onsite, the parents would be carrying baskets of toys or books to supplement the minimal amount of toys or books present in the center,” states the report.

It claims that investigators would “regularly see fraudulent child care centers open faster than they can close the existing ones down.”

“Investigators in this unit do not believe, despite the number of cases investigated thus far, that any real progress has been made regarding CCAP fraud. Investigators believe that current internal controls and statutes are not stringent enough to make reasonable progress in reducing the level of fraud in this program,” the report concludes.

An April report from the OLA on internal controls in DHS revealed that the agency “in past years received a federal waiver” from the requirement to inspect child care centers.

“Among other activities, DHS must inspect child care centers. In addition to the initial inspection described previously, DHS and counties also must conduct at least one unannounced inspection annually of licensed providers, although DHS in past years received a federal waiver from this requirement,” says the reports.

The New House Republican Caucus said Commissioner Harpstead “went on offense” and tried to “minimize the role of fraud and mistakes in her agency.”

“Her estimate of $106 million dollars of missing money was challenged by several members of the committee who pointed out that the totals for CCAP fraud are unknown at this point and that the Department’s failure to collect overpaid dollars in the millions has basically been written off by DHS as if it never existed,” the release added.

Rep. Tim Miller (R-Prinsburg) said his constituents “want to know what happened to all these allegations of fraud.”

“Trust in government bureaucracy is at an all-time low, and Commissioner Harpstead’s reliance on clichés like ‘the buck stops here’ and ‘Operation Swiss Watch’ isn’t going to convince them,” he said.

Rep. Joe Schomacker (R-Luverne), the Republican lead on the House Health and Human Services Committee, called for a “full audit of DHS.”

“Governor Walz twice has endorsed a forensic audit of DHS so Minnesotans can be confident that their tax dollars are being used responsibly—we hope Commissioner Harpstead will work with the legislature and the Governor to craft an audit plan that DHS desperately needs,” he said in a statement.

Rep. Tina Liebling (DFL-Rochester), chair of the committee, praised Harpstead for her “very impressive background” and ability to manage “other large organizations.”

“Today, she outlined changes that have been made and delivered a message that the department is handling most of its responsibilities well and is headed in a positive direction,” said Liebling. “Having worked with her over the last 90 days and hearing her thorough report today, I feel confident that DHS is in good hands.”

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Anthony Gockowski is managing editor of Battleground State News, The Ohio Star, and The Minnesota Sun. Follow Anthony on Twitter. Email tips to [email protected].







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