Working Papers for Discussion Distributed at the State Partners Meeting, September 28-29, 2004
(This document is also available in Word
and PDF.)
Preliminary Conclusions and Recommendations Related to the Pilot Project Objectives
Strategy for Estimating Improper Payments
One of the major objectives of the pilot was to evaluate the feasibility of developing a strategy for estimating improper payments in the Child Care program. While States are looking into ways of developing measurements in their own jurisdictions, they are having difficulty in establishing error rates due to the complexity and flexibility of the program, as well as limited data available. Similarly, establishing a national estimate of error seems especially elusive due to the same flexibility and complexity plus the unique approaches to administering the CCDF block grant among the States, Tribes and Territories. More work is needed to further explore the problems that surfaced and to refine the initial learnings. A plan has been developed to address this need and expand the base of States involved.
Improved Monitoring Regarding Improper Payments and Fraud
Many States have already taken active steps to measure, prevent, identify and recover improper payments, addressing everything along the continuum from overt fraud to inadvertent, unintentional errors. Progress is uneven across States, and some States are stronger at addressing certain types of error than others (e.g., administrative error, provider error, client error). However, existing strategies and practices provide a solid basis for future improvements and sharing best practices across States, Territories, and Tribes.
Our observation is that State child care systems which share information with other systems, such as the labor, welfare, and education departments, are better able to independently verify information supplied by families; this facilitates both initial awarding of benefits and re-determination of eligibility. Linking systems to each other cuts down on the amount of time required to verify information. It also provides a tool to enhance monitoring capabilities within the jurisdiction. Conversely, the lack of integrated systems or the lack of collaboration greatly impedes the ability of the jurisdiction to monitor the accuracy of its program administration. Another challenge is the lack of a common identifier among the multiple systems. Multiple systems and lack of consistent data hinders States from corroborating information self-reported by providers or parents.
ACF does not regularly conduct any reviews, or engage in other oversight activity concerning the issues of improper payments or other aspects of grantees' management of the roughly $8.5 billion in CCDF and TANF funds spent on child care. The various fiscal and programmatic data elements such as single State audits and State financial expenditures reporting, while useful for some purposes, do not capture information about the various strategies and tools that States have in place for managing improper payments
Better Definitions of Child Care Payment Error and Child Care Fraud
Reduction of improper payments may begin with States re-examining their existing child care subsidy policies and their definitions. For example, adjusting payment strategies, such as payment rate units (hourly, daily, or weekly) and policies related to children's absences, can impact the level of resources required for tracking attendance in child care and the resulting level of improper payments.
Finding common specific definitions proved to be elusive. Definition of what constitutes error and what constitutes fraud varies greatly among the States. States report that certain types of errors in the child care subsidy program are more problematic and larger in scope than others. By clearly defining error and fraud, by prioritizing their efforts, and by focusing on prevention and identification strategies that are most cost-effective, States, Tribes and Territories can improve program integrity without unnecessarily diverting scarce resources. Additional work is necessary and is planned.
Documented "Best Practices," Technical Assistance Materials, Data, and Reporting Protocols
A wealth of information was gathered from the Partner States in the pilot project. Information has been shared in a variety of ways. It has become abundantly clear that there is both a willingness and need to share "best practices," technical assistance materials, data, and reporting protocols with not just the Partner States, but with all the States, Tribes, and Territories. It has been strongly suggested that this sharing be done in a variety of ways and on a continuous basis.
While a number of excellent initiatives were documented by the Partner States, there is much more to be learned and shared. With the limited resources available and the guidelines outlined, the Bureau is moving forward to continue this project into the next phase of development and implementation.
It is imperative to recognize that each State, Territory, and Tribe has its own unique set of policies, procedures, and structures that support the child care subsidy program. Locally-administered States can have more than one system of administering the program even within their own borders. Therefore, no one set of solutions or strategies can be applied on a national level. To address the issue of improper payments, the variability with which States, Territories, and Tribes implement the block grant must be acknowledged and respected.
It is clear that improper payments need to be addressed within the broader context of service delivery. Many States report that efforts to control erroneous payments need to be balanced by efforts to provide effective service delivery for clients. If strategies to limit erroneous payments (e.g., increased paperwork, verification requirements) discourage significant numbers of parents or providers from participating in the subsidy program, the effectiveness of the program may be undermined.
The pilot project phase of addressing improper payments and fraud in the child care subsidy program is concluded but there is much more work that remains to be done. Many proposed future initiatives have been suggested by Partner States and others involved in the conference calls and/or workshops as necessary and extremely helpful to States, Tribes, and Territories in addressing improper payments and fraud.