Sneak Preview: GAO Calls for Improved Monitoring of CCDF Funds

(The following was excerpted from a recent article in the Single Audit Information Service.) The Department of Health and Human Services (HHS) Office of Child Care (OCC) plans to develop by September written policy and procedures to enable OCC staff to consistently follow up on state Child Care Development Fund (CCDF) recipients’ corrective action plans (CAPs) to address CCDF improper payment concerns, and to ensure that these CAPs focus on the root cause of the improper payments, in response to recent recommendations in a Government Accountability Office (GAO) report.

OCC, an office within HHS’ Administration for Children and Families, oversees the CCDF, which subsidizes child care for low-income families and provided more than $8 billion in federal funds in federal fiscal year (FY) 2019. Each state has a lead agency that is responsible for the CCDF funding provided by HHS, and public agencies and private entities within the state can receive subrecipient funding from the lead agency to provide child care services to eligible children and families.

To receive funds, state lead agencies must submit for OCC approval a CCDF state plan for the grant period, which runs for three years (currently FYs 2019-2021). The plan includes sections for ensuring recipient program integrity and accountability, which encompass both fraud and improper payment risks. OCC regularly reviews state lead agencies’ improper payments (i.e., payments that should not have been made or were made in incorrect amounts, including overpayments and underpayments). When a lead agency reports an improper payment rate at or above 10%, it is required to submit a comprehensive CAP.

Previous GAO reports noted that some states lacked controls over child care assistance application and billing processes for certain providers, leaving the program vulnerable to fraud and abuse. In response to these reports, the states said they had plans to implement new controls, while HHS officials said that they had taken actions to address CCDF program integrity. Therefore, the U.S. House Committee on Education and Labor requested GAO review the program again to determine the status of these developments.

(The full version of this story has now been made available to all for a limited time here.)

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