Phase II Findings: Error Rate Methodology Pilot
Executive Summary, I. Introduction, II. Methodology, III. Measuring Improper Payments in Nine States, IV. Findings and Next Steps, V. Recommendations, Appendices: Appendix A: Arkansas, Appendix B: Colorado, Appendix C: Illinois, Appendix D: Ohio, Appendix E: Record Review Worksheet, Appendix F: Data Entry Form, Appendix G: Telephone Discussion Guide, Appendix H: Arizona, Appendix I: California, Appendix J: Kansas, Appendix K: Nebraska, Appendix L: New Hampshire
Appendix B: Colorado
SITE VISIT SUMMARY
Overview of the Colorado Child Care Program
The Colorado Department of Human Services (DHS), Division of Child Care administers the State-supervised, county-administered child care subsidy system in Colorado. The State is comprised of 64 counties, with the 10 largest counties representing 85 percent of the children and 81 percent of the overall child care budget. Most counties administer the program through their local county departments of social services, although three counties have contracted their programs out to private agencies—Adams and Boulder Counties contract with Aspen Family Services and El Paso County contracts with Goodwill Industries. According to the latest information provided by the Division of Child Care, 48,084 children and 26,342 families in the State receive child care assistance at 4,300 family child care homes, 2,001 child care centers (including preschools), and 883 school-age facilities.
Families who receive Temporary Assistance for Needy Families (TANF) represent 22 percent of the child care population; the remaining 78 percent of families receive services through the low-income program. Some counties administer TANF and low-income child care with the same staff, while others administer the programs through different locations, programs, or agencies. Child care in Colorado is first come, first served; however, counties can establish waiting lists. TANF recipients move directly to low-income child care and not to a waiting list.
The Colorado Child Care Assistance Program (CCCAP) allocates funding annually and utilizes a county- and State-approved formula. Counties have the ability to transfer TANF dollars and utilize county-only dollars to supplement their allocation. Counties also have decision-making ability regarding local policies, can establish waiting lists as needed, and must submit a child care plan for State approval every 2 years. Counties are required to amend plans between submission dates for all changes. The next county plan will include information on how counties address improper payments.
To determine eligibility, clients must submit an application, provide child support information, complete a client responsibility agreement, and provide verification of employment and income. All counties must enter child care subsidy information into the Child Care Automated Tracking System (CHATS), which collects and tracks background information, eligibility, redetermination, changes to eligibility, days authorized, and days billed. CHATS automatically calculates eligibility for households based upon the information entered. CHATS also tracks provider payments and ensures that each provider has a unique identifier, thus minimizing potential double-billing situations. In addition, CHATS tracks nonpayment of fee closures and follows the parent should they attempt to receive benefits in another county.
CHATS interfaces with another child welfare system, the Colorado Trails System (Trails), for all provider information, including license status and addresses. The system maintains separation of duties by county eligibility staff maintaining client information, while the business office enters billing data and issues the payments. The business office cannot modify authorizations to raise the payment amounts; conversely, eligibility staff cannot process and pay providers.
The parent fee is the first amount applied to the monthly cost of child care. A parent pays the assessed fee to the provider and the provider bills for the remainder of the cost of care based on the rate agreed upon in the fiscal agreement. If the county CCCAP office receives notification that a parent is not paying their fee and has not initiated a schedule for paying the fee, the county can close the case within 30 days.
The provider submits the billing form by entering “units” onto a printed billing form from the CHATS system. Payroll runs occur each Friday night. Counties can choose to pay each Friday after the month of care provided and are required to process payments by the second Friday prior to the third Monday of the month. Funds are distributed through an Electronic Fund Transfer on the following Monday. Colorado does not allow for the processing of checks so providers must have direct deposit or receive payment on an Electronic Benefits Transfer Card (Quest Card). The CHATS system must have valid banking information prior to processing any payment through the Electronic Fund Transfer.
Child care program options vary across counties, presenting a labor-intensive process for State-level monitoring of improper payments based on administrative error. Examples of this variation include the following:
- The State conducts a market rate survey every 2 years and publishes the 75th percentile in an agency letter. Colorado publishes the 75th percentile based on rates for children younger than 2 years and children older than 2 years. Counties determine their rates based either on this information or on local information. Counties establish their own reimbursement and age range rates. To determine these rates, counties consider several factors, including local economies, child care availability, market prices and rates, and quality. Each county’s rate represents the maximum amount they can pay for child care and is not to exceed a provider’s private pay rate. Using the current daily rate information, for children younger than 2-years old in full-time center-based care, Routt County (resort economy of Steamboat Springs) has a rate of $45.00 a day, while Dolores County (rural economy) has a rate of $13.84 a day.
- Families must live in the county in which they receive benefits. In metropolitan areas like Denver—which consists of multiple contiguous counties—a child may no longer be eligible for services if he or she moves to another county. This policy has the potential to impact access, as one county may pay different rates than another. In dual custody cases, both parents must apply for benefits regardless of where they reside. The county authorizes service based on the custody agreement and the location of the child.
- Each county determines its own policy for reimbursement when a child is absent from care. Counties authorize up to 7 days of paid absences per month, the average being 3 days per month. Counties make exceptions based on documented anomalies, such as a physician-documented illness.
- Documenting immunization schedules varies among counties. Some counties obtain immunization verification as part of the eligibility process and maintain them within the case record, while others require the child care providers to maintain the documentation with a plan to monitor the provider’s collection of immunization information.
- Counties have the option to require cooperation with Child Support Enforcement as a condition of child care benefits. This option is not required statewide and some counties that implemented this have experienced a drop in the child care rolls; child support may increase household income enough to make families ineligible for services. This policy has also reduced erroneous reporting of household composition.
- Counties complete a redetermination every 6 months. Three months of pay stubs are required at redetermination, but counties sometimes request them for 6 months, depending upon the individual’s income consistency and regularity.
Certain client eligibility policies and procedures are similar across counties, allowing for systematic monitoring of administrative error. These eligibility procedures include the following:
- Clients are required to report any change that influences eligibility such as employment, household composition, schedule, or income. Clients can report these changes by phone, but most counties request changes in writing with supporting documentation as needed. The State is considering reducing the time limit to report changes from 3 days for some changes and 30 days for others, to a standard 7 days for all changes.
- A full-time rate means that more than 5 hours of child care are provided per day, while part-time daily rates are less than 5 hours of child care provided per day. The average number of care days per month is 22.
Legally-exempt providers—usually family, friends, or neighbors—must be at least 18-years old and must sign contracts and self-assurances with the county to provide care. Legally-exempt providers are registered but not licensed, and may not provide services to more than one household at the same time without a license. However, a legally-exempt provider can serve one client in the morning and another in the afternoon providing there is no overlap. Provisions allow relatives to care for more than one relative’s children (e.g., a grandmother caring for her grandchildren from two of her children). A family child care home or child care center receives a license following a background check and licensing procedures as outlined in Colorado’s Child Care Licensing Act.
<< Appendix A: Arkansas (Continued) | Table of Contents | Appendix B: Colorado >>