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Senate GOP takes action on Child Care Fraud: Calls for DHS Inspector General Ham to Step Down

In response to the legislative audit revealing wide-spread welfare fraud and other illegal activity connected to the Child Care Assistance Program (CCAP) summarized here, the Senate GOP Leadership sent out this news release last night:

Senate Republicans heard legislation yesterday to address the shocking revelations of the Legislative Auditor’s report on the Child Care Assistance Program (CCAP).  Four bills in the Human Services Reform Committee focused on increasing oversight and maintaining the integrity of the funding.

Senator John Jasinski (R- Faribault) presented two bills to address CCAP fraud. “When the man in charge of investigating CCAP says that fraud could be at least 50% of the entire program, it should make everyone stop in their tracks,” Jasinski said. “So far the Department of Human Services has failed to get the rampant fraud under control, so the Senate will have to bring accountability and transparency to the program.”

Jasinski’s first bill, SF 1845, restricts family members from receiving public assistance for the hours they work in a child care setting. CCAP is meant for families who need assistance for child care while they are working or going to school. It is not intended to reimburse parents or relatives for taking care of their own children.

The second bill from Jasinski, SF 1846, requires child care business that receive $250,000 or more in CCAP funds to hold a surety bond of $100,000. The surety bond would provide a means to protect tax payers should fraud occur in the business. Many of the centers exposed in the Legislative Auditor’s report or already prosecuted for fraud were centers bringing in large amounts of CCAP dollars that will be difficult to recover. A surety bond protects the taxpayers from footing the bill for fraud.

Senator Karin Housley (R- St. Mary’s Point) presented on SF 1367 to allow data sharing between Department of Human Services (DHS) and Minnesota Department of Education (MDE). It also prohibits families or programs who have been disqualified from CCAP from receiving early learning scholarship funds. Too often a bad actor can jump from one program to another, and this bill will help both agencies enforce compliance with their programs.

Finally, SF 4 presented by Senator Jerry Relph (R- St. Cloud) would require child care businesses receiving CCCAP fund to maintain “accurate and legible daily attendance records…and must make those records available immediately to the county or the commissioner upon request” in order to receive CCAP payment. One of the concerns highlighted by investigators was the delay in receiving attendance records, sometimes months old, to confirm eligibility of children. Adding the requirement in SF 4 will allow investigators immediate confirmation that funds are being used properly.

In addition to these policy changes, Senator Mark Koran (R- North Branch) called for new leadership in the Investigator General’s office. “The legislative audit report details gross incompetence and mismanagement of the very agency responsible for rooting out fraud and waste within Department of Human Services programs,” said Senator Koran, Vice-Chair of the bipartisan Minnesota Legislative Audit Commission. “I cannot fathom how Ms. Ham, whose job description as Inspector General is described by its own website as “manag[ing] financial fraud and abuse investigations“, has never met her own investigators. By failing to even communicate with the employees in her office responsible for carrying out the mission of the Inspector General, Ms. Ham has proven she is incapable of fulfilling the basic duties of her job. She must go immediately. And, if she refuses to voluntarily resign, Governor Walz should terminate her for cause.

“To be a truly independent agency that investigates and roots out fraud within human service programs, the Office of the Inspector General must be a standalone office outside of the Department of Human Services,” added Senator Koran. “I will be authoring legislation in the Minnesota Senate that does just that, so that we can have uncompromised reviews of DHS programs that benefit not only good government, but every Minnesota taxpayer.”

More legislation, and other action, is expected to address the poor administration of the CCAP program (e.g. requiring electronic record keeping), as well as reviews of other welfare programs that may be vulnerable to fraud.

The OLA is conducting a review of the breakdown at DHS between the Inspector General’s office headed by Ham and the CCAP investigators. The report is expected in April.





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