June 12, 2009

 
AUDIT OF WISCONSIN SHARES
UNVEILS NUMEROUS PROBLEMS
Lazich requested audit of state taxpayer supported child care system

MADISON – State Senator Mary Lazich (R-New Berlin) is calling for swift implementation of recommendations made by the Legislative Audit Bureau (LAB) after the bureau identified major problems with Wisconsin Shares, the state’s child care subsidy program. Lazich, a member of the Legislature’s Joint Audit Committee called for an audit during January 2009 after the Milwaukee Journal Sentinel began a series of investigative reports about the $340-million program that, when successful, provides assistance to low-income parents to help them get and retain jobs.

“The Audit Bureau uncovered millions of dollars of waste, periods of ineligibility, a lack of correct documentation, providers paid for care they didn’t provide, and inefficient rules that allow fraudulent child care rings to scam the system,” said Lazich. “The Audit Bureau has offered appropriate solutions that on behalf of taxpayers need to be put into effect as quickly as possible.”

The LAB findings include:

• Improper payments to providers during 2008 totaling between $16.7 and $18.5 million
  
  
• Providers were paid for care they either didn’t provide or weren’t authorized to provide resulting in $4 million in improper payments.
  
  
• Rules that allow providers to care for one another’s children. The LAB reports fraudulent child care “rings” were thus created, increasing the likelihood of fraud and abuse.
  
  

“I strongly agree with the LAB’s recommendations,” said Lazich. “The Department of Children and Families needs to bolster the way it verifies eligibility, and rules that allow child care providers to commit fraud and then benefit need to be eliminated quickly to prevent further waste and cost to taxpayers. I’m appalled that rampant fraud and waste is occurring, especially at a time the state is suffering a huge deficit.”

During a four month period, Milwaukee Journal Sentinel reporter Raquel Rutledge pored over 2,500 records and documents and uncovered, what it called, “a trail of phony companies, fake reports and shoddy oversight,” a system that could be scammed without difficulty or accountability by parents and child-care providers, “capitalizing on children for public cash.”

“My fear turned out to be true, that the problems associated with Wisconsin Shares were even more serious than the Milwaukee Journal Sentinel discovered,” said Lazich. “It is clear there must be an overhaul of the program.
We have to protect the taxpayers and we must also ensure that the truly needy, the truly deserving are receiving program services.”

The audit by the LAB is the first phase of the review of Wisconsin Shares. A second phase that will examine child care regulation will be conducted later this year.