Tens of millions of dollars in public money goes yearly to unlicensed Washington child-care providers — relatives, friends, neighbors and nannies who watch children while their parents work.
So when state auditors estimated last fall that 92 percent of those payments in a recent year were improper, raised questions or weren’t backed up by records, some state lawmakers took notice.
The union that represents the state’s 3,197 unlicensed providers who receive government subsidies says their ranks have contracted, as overall spending on day-care subsidies for the poor has shrunk under budget cuts to the state-and-federal Working Connections Child Care program.
But Sen. Mike Carrell says it’s still “astounding” that so many providers receive subsidies, and says any who aren’t playing by the rules need to be weeded out.
“Why do we have so many? Well, where there’s money to be had, people figure out a way to get it,” he said.
Carrell, a Lakewood Republican who’s made a habit of targeting perceived fraud in public-assistance programs, has vaulted to leadership of the Human Services committee as part of a GOP-led takeover of the Senate. Now he has proposed a requirement that family-and-friend providers must get a license after a year.
Unlicensed providers who receive public money already must pass a background check and keep attendance records. But they don’t have to meet the longer list of requirements for licensed providers, who must have a high school diploma or the equivalent, allow inspections of their homes, and comply with the usual requirements of running a small business.
Carrell’s proposal would put more workers through those hurdles and faces opposition from many child-care workers and their union, Service Employees International Union Local 925.
One grandmother testified at a hearing Monday on Carrell’s proposal that she didn’t want to become a business owner. Karen Hart, president of SEIU Local 925, said many workers could be unable to meet licensing requirements or to line up spots in crowded state orientations for licensees.
That could leave some parents unable to find someone to watch their kids, especially those who work odd hours, don’t speak English or have children with special needs, Hart said. She said parents might end up taking kids to work, leaving them with older siblings, or even leaving them home alone.
“When you get rid of options for parents, when you limit parent choice, what you essentially do is you drive care underground,” Hart said.
Unlicensed providers aren’t exactly highly paid, making $2.20 an hour in subsidies for the first child they supervise in a family and $2.17 an hour for others.
But Carrell said some might be paid for doing nothing. He concluded from the state audit last year that, for example, neighbors are agreeing to falsely pretend each is watching the other’s children in order to draw down payments.
Then-state Auditor Brian Sonntag’s investigators found 42 instances of records showing children being watched at one home at the same time their parents were recorded as watching other children.
More broadly, auditors estimated nearly one-third of payments to licensed providers in fiscal 2011 were overpayments or questionable, growing to 92 percent of payments to unlicensed providers. They based the estimate on a sample of spending they examined, identifying payments with no backup records, questionable paperwork or for services that weren’t provided or were provided improperly. Altogether, auditors called into question more than $109 million.
But SEIU’s Hart said the sample wasn’t representative of all providers because it didn’t take into account how many children were watched by each one.