Working Papers for Discussion Distributed at the State Partners Meeting, September 28-29, 2004
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Pilot Project: Measuring Improper Payments in the Child Care Program
This project explored, with a limited number of States, the feasibility of establishing a national error rate in child care. Additionally, it produced recommendations for improved monitoring and administration, produced better definitions of child care error and child care fraud, documented "best practices" and provided other technical assistance materials, including data and reporting protocols. This initial phase of the project was successful in beginning to focus more attention on the need for accurate payments, as well as correction and collection, if appropriate, for improper payments. While much has been accomplished, much work remains to be done before a determination can be made as to the feasibility of a national error rate in the Child Care Program.
The following describes the implementation of the pilot project, and recommendations for Phase II of the project which should be completed within the next twelve months.
Recruit Specialized Staff to Administer the Project
To augment existing staff, the Bureau recruited Mary Jo Thomas, an experienced official from the Commonwealth of Virginia, on an Intergovernmental Personnel Act assignment to oversee this effort and help analyze the findings and recommendations from the pilot project. Regional Office and contractor staff assisted as team members on visits to States.
Solicit Volunteer Partner States; Confirm Participation of Partner States; Confirm Field Site States; Convene Initial Meeting of Partner States
To understand the issue from a State perspective, the Bureau invited eleven States to participate in this Pilot Project to help assess the adequacy of systems, databases, policy constants, and administrative structures, and to describe the critical differences among broad categories of States. Of the eleven, six States volunteered to serve as field sites and the remaining five agreed to participate as partners in the project. These eleven States bring to this project experience in dealing with improper payments, knowledge of the capacity of their State and locally-administered automated systems, and strong working relationships among key State agencies. Both State- and locally-administered organizational structures are represented in the eleven States.
The initial meeting with the Partner States was held on November 12 - 13, 2003 in Washington, DC. Participants included State Child Care Administrators, Fraud Directors, Quality Assurance Directors, Auditors, Investigators, Federal partners and contract staff. During the two-day meeting, States shared the various approaches to service delivery in the administration of the CCDF program. There was general acknowledgement among States that:
- The difficulty of developing a national error rate is compounded by the fact that State systems are so diverse.
- There can be significant differences between those programs that are supervised and administered at the State level and those that are administered locally.
- The definition of "error" varies greatly from jurisdiction to jurisdiction, which presents a challenge in developing a model system with national application.
- The culture of the administering agencies/units is typically very different from the culture of investigating and prosecuting agencies/units. This can have a significant influence on defining, identifying and subsequent prosecution of improper payments.
- States with a solid infrastructure, integrated and automated systems, and sufficient staffing stand the best chance of preventing fraud, as well as successfully pursuing fraud when it occurs.
- Integrated automated systems are powerful tools in tracking clients, providers, and payments, and establishing thresholds for fraud prevention and monitoring errors.
- Setting consistent measurements and benchmarks to make a national error rate meaningful across States will present a significant technical problem. It remains to be seen whether it will be possible to produce a useful national metric.
- With progressively larger sums of money going into child care, there has been an increase in recent years in concern about good stewardship and program integrity.
Collaborate with Federal and Non-Federal Partners
Federal Partners.
GAO. The Bureau collaborated with GAO, which was asked by the House Ways and Means Committee to conduct a study of improper payments in child care. Since both agencies sought information on this topic from States, we concluded that we should coordinate and broaden the base of information available overall. GAO released its final report on the results of the survey and site visits in June 2004; prior to that release, the Bureau participated in the review process. The Bureau met with staff from GAO to review and comment on the initial findings and submitted a response to their final report.
OIG. The HHS Office of Inspector General has been fully involved with the Bureau in the development of this project, and participates in key meetings. In addition, OIG has provided fraud training and technical assistance to Federal, State, and Tribal staff at the Bureau's request. OIG staff participated in the site visit to Virginia.
SAMHSA. Child Care Bureau and ACF Regional Office staff presented at five bidders' conferences across the country (Atlanta, Denver, Phoenix, Seattle, and Washington, DC) for States and Tribes interested in applying for grants under the Substance Abuse and Mental Health Services Administration's new program that will provide vouchers for substance abuse treatment. (Travel costs were covered by SAMHSA.) ACF staff provided a framework and ideas for ensuring program integrity and controlling errors in a voucher environment, based largely on lessons learned through the Bureau's improper payments pilot project. These efforts are anticipated to lead to cross-program discussions and coordination at the State and Tribal levels, with potential benefits for CCDF programs.
The Bureau made a presentation at the annual National Tribal Child Care Conference in April 2004; several Tribes expressed interest in participating in this project. The Bureau will involve the Tribal Workgroup, with representatives from Tribes from nine of the ten HHS Regions[1], in future quarterly conference calls.
Non-Governmental Organizations.
The Bureau has been in regular communication with the American Public Human Services Association (APHSA), the National Association for Program Information and Performance Measurement (NAPIPM), and the United Council on Welfare Fraud (UCOWF) concerning this project. The Bureau made presentations at the spring meeting of APHSA in March 2004, as well as UCOWF in March 2004. The Deputy Associate Commissioner of the Child Care Bureau was one of the opening speakers at the national UCOWF conference in August 2004. Additionally, the Bureau made a presentation at the NAPIPM annual conference in August 2004.
Communicate regularly with Federal Staff, State Child Care Administrators, and Regional Office Staff
To ensure good communication and foster an ongoing partnership between Federal and State participants, the Bureau has undertaken a variety of actions. The Bureau has conducted quarterly conference calls with State Administrators, Territories, representatives of the Tribal Workgroup and Regional Offices; conducted special briefings for non-governmental organizations; shared information within ACF, including Regional Office staff; and included workshop and roundtable discussions on controlling improper payments at the national State Child Care Administrators meetings.
Consult with other Federal agencies that have experience with erroneous payments for examples of technical or program solutions
PARIS.
In response to growing interest in the role of automation in preventing and pursuing erroneous payments, the Bureau hosted a conference call with selected States on the topic of PARIS (Public Assistance Reporting Information System), a voluntary information exchange system designed by the Administration for Children and Families to provide State Public Assistance Agencies with appropriate data as a result of a Federal computer matching initiative. Some States are investigating the use of PARIS for their child care program. The Bureau arranged for a PARIS presentation at the NAPIPM annual conference in August 2004 in Richmond, VA. Another call is planned with all States invited to participate.
ACF State Systems Summit.
The Bureau sent staff to the State Systems Summit, "Reaching New Heights in Human Services Collaboration," hosted by the Administration for Children and Families, in May 2004. The Summit enabled Bureau Staff to collaborate with Federal and State leaders in TANF, Child Welfare, and Child Support Enforcement programs on a variety of topics. Child Care staff participated in sessions on cost allocations; State systems profiles, data exchange with XML, Food Stamps, TANF reauthorization, PARIS, and titles IV-A and IV-D.
During the Arkansas site visit, ACF confirmed the critical role that the Child and Adult Care Food Program (CACFP)[2] can play. Bureau staff met with Food and Nutrition Service staff to explore opportunities for coordination, cooperation and mutual support at the State level.
Conduct field site visits
Six field site visits (Arkansas, Connecticut, Indiana, Ohio, Oklahoma, Virginia) have been conducted. State officials were very generous with their time and materials, and went out of their way to ensure that the site visits were productive.
A wealth of information was gathered during the site visits. States have developed a range of strategies to prevent errors, identify errors, and take appropriate enforcement action-as demonstrated in the examples below:
Prevention
- Documentation requirements to establish eligibility--e.g., pay stubs to document income.
- Verification of client or provider-reported information--e.g., access to government databases for confirmation.
- Periodic determination of eligibility to capture changes in circumstances.
- Training of program staff on policies and procedures.
- Outreach and clear communication with parents and providers about program rules--e.g., clear application materials that describe requirements.
- Public relations campaigns to discourage fraud.
- Up-front verification of suspect cases prior to determining eligibility.
Identification of Errors
- Quality assurance reviews or audits of case records.
- Monitoring of providers--e.g., on-site visits based on complaints or random selection.
- Automated data runs to identify red flags--e.g., providers with no absent children.
- Red Flag Process - when there is any indication that there is an error in payments or fraudulent practices, the State does not automatically mail the check to the provider or parent, but holds the check until the issue is investigated further.
- Investigation of cases in response to public complaints.
Enforcement
- Recouping of erroneous payments--e.g., establishing repayment plans with parents/providers.
- Barring clients from benefits or providers from future business.
- Referrals to prosecution for fraud.
Immediate Benefits of the Pilot Project
Since the initial national meeting in November 2003 and the last site visit in June 2004, the Bureau has witnessed a variety of positive actions as a result of this pilot project. For example, considerable interest has been generated in the project as evidenced by
- growing State and Regional Office participation in the conference calls;
- non-Partner and Partner States' willingness to share State and local activities and best practices, and
- State and other partner attendance at workshop presentations.
States that are not among the original Partner States have begun to volunteer information about their experiences and successes with improper payments. The growing number of other cooperating organizations is another indication of Federal, State and local interest in accountability and program integrity.
1 Region III has no federally
recognized Tribes. (back
to text)
2 CACFP is administered
by the U.S. Department of Agriculture. (back
to text)
