Audit pins $37M in questionable child care payments on weak oversight, missing records
OLYMPIA, Wash. — A day after a state audit estimated $37 million in questionable payments to sponsored child care suppliers, KOMO News is urgent for solutions about which suppliers triggered the estimate and what occurs subsequent.
At the middle of the audit is the Department of Children, Youth and Families, which distributes federal funds to child care suppliers.
The audit marked the primary time in 5 years that state auditors had been capable of conduct a evaluate utilizing documentation they may monitor, though they once more flagged oversight issues on the company.
Auditors reviewed records from a “statistically valid sample of subsidized child care providers” and located weaknesses in the state’s system for detecting improper payments. Those points contributed to an estimated $37 million in questionable payments in 2025.
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“Seeing this come out is like putting a knife into a wound,” stated Rep. Josh Penner, R-Thirty first District. “It’s frustrating because we knew this was a problem. We didn’t even have to agree that fraud existed. We knew this black hole of billing was a problem, and it was not addressed.”
Penner stated lawmakers labored with DCYF on laws geared toward strengthening oversight of child care payments, together with biometric attendance monitoring and verification. However, House Bill 2253 died in the Senate earlier this month.
He stated the invoice would have addressed points cited in the audit, together with missing attendance records, overbilling for unsupported providers and missing required signatures from dad and mom or guardians.
The audit doesn’t determine the suppliers tied to the questionable payments. KOMO News reviewed each the audit abstract and full report and located no supplier names. The station has requested that data from each the auditor’s workplace and DCYF. The auditor’s workplace stated the info could also be accessible via a public records request, which KOMO News has filed.
Auditors additionally famous that full annual audits of sponsored child care spending from 2021 via 2024 weren’t accomplished as a result of an absence of documentation made it not possible. The company described this as a failure to trace spending on the stage required by federal legislation.
As a consequence, auditors deemed all $413 million paid to suppliers in 2024 unauditable. The newest audit provides an estimated $37 million extra in questionable payments.
“We don’t know whether fraud exists or not,” Penner stated. “The auditor says it can’t conclude that fraud occurred, but there are red flags that need to be looked into. There could be fraud — there’s just not enough information.”
Auditors stated they didn’t discover proof of fraud.
KOMO News requested DCYF whether or not any of the suppliers linked to questionable payments in the audit can be referred to the company’s fraud unit for evaluate. The company stated it might reply at a later time.
Penner stated he deliberate to revisit the difficulty subsequent session.
“House Bill 2253, sponsored by Rep. Adam Bernbaum and amended by several members, would have implemented many of the recommendations from the auditor’s office,” Penner stated. “Those changes could have already been in place.”
