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Montana DPHHS updating procedures on child care funding after audit

Montana State Capitol
Posted at 6:46 PM, Oct 05, 2022

HELENA — The Montana Department of Public Health and Human Services says it’s working on updating how it handles millions of dollars in child care funding, after an audit found they could do more to show the money is getting to the areas with the greatest need.

Montana typically spends about $40 million a year in federal and state funding for child care programs. On Wednesday, the Legislative Audit Division presented lawmakers with a breakdown of how that money is distributed, along with recommendations on improving the processes.

“What the audit did do for us is challenge us – as audits often do – to think differently about the way we’ve always done things,” said Erica Johnston, executive director of economic security services for DPHHS, during a meeting of the Legislative Audit Committee.

The audit report focuses on federal Child Care and Development Fund money – $29.6 million in fiscal year 2020 – and state matching funds – just under $10.4 million. More than half of that funding goes to the Best Beginnings Child Care Scholarship program, which provides subsidies to help qualified low-income families afford care. The rest of the money supports regional child care resources and referrals, kids in foster care, quality improvements and more.

Auditors found many parents across the state are having trouble enrolling their children in the child care facility of their choice – often because of a lack of openings – and that many providers have had to raise rates to keep up with rising costs.

Their report notes that Montana’s 56 counties vary widely in demographics like number of children under age 11 and median income, which can help indicate the potential need for child care assistance in an area. They said DPHHS does informally consider child care needs county by county, but they don’t have an easy way of comparing and prioritizing which need is greatest. The auditors recommended DPHHS make regular reviews of the demographic data and use that to help guide their decisions on distributing funds.

“We acknowledge no single demographic data point will provide the necessary information to determine the need for child care assistance,” the report said. “A collection of demographic and other information would provide the best insight.”

In one example, they noted that Gallatin County saw a 9% increase in children 11 and under from 2014 to 2020, but its CCDF funding actually decreased by 40%. The report speculates one reason could be that, because of the high cost of living there, families could be making too much to qualify for Best Beginnings scholarships but still struggling to pay for care.

The audit also recommended DPHHS add a step to its licensing process, to check whether anyone on the Sexual or Violent Offender Registry is listed as living at the same address as a child care provider. They found three child care locations that matched someone on the registry – though only one of them was still an active provider at the time.

Currently, when providers apply for a license, they must state who is living at the address. The state then checks those names – not the address itself – against the registry.

“This particular recommendation challenges the department to go one step further, beyond self-attestation,” Johnston said. “It moves from the trust and self-reporting to actually verifying – taking that next active step to say, ‘We believe you, but we’re also going to check, and if we find something on that list we’re going to act appropriately.’”

DPHHS director Charlie Brereton told lawmakers the department will work to implement all of the auditors’ recommendations in the coming months, but that they are already in the process of rechecking addresses, working with the Montana Department of Justice.

“I understand that safety is paramount for parents as they select a child care provider, and we will not let this continue to happen,” he said. “You have my word.”

The $40 million figure is based on a typical year, before COVID-19. Brereton said they’ve been able to direct much more money toward child care recently, because of one-time funding from federal pandemic relief programs like the American Rescue Plan Act.