After a year of speculation and rumor, the Office of the Legislative Auditor (OLA) released its special review of the Child Care Assistance Program (CCAP) examining daycare fraud allegations on Wednesday morning. The OLA’s report details widespread fraud in the program, and the lack of internal controls at DHS that make fraud prosecutions difficult.

Following the Auditor’s presentation Senator Mark Johnson (R-East Grand Forks) released a statement:

“We all were aware of some degree of fraud within Minnesota’s Child Care Assistance Program, but this report helps define the magnitude of the problem. The only question that remains is how can our state move swiftly to address the problem.”

“While today’s OLA report failed to identify the specific dollar amount of fraud, it did show the investigators charged with uncovering fraud have identified broad systemic failure occurring within the Department of Human Services that allow it to continue. These failures in government are not something that we can continue to sweep under the rug. Every dollar we lose to fraud robs Minnesota children and their families who need the support.”

In the report, the OLA notes that while they could not substantiate the $100 million figure, they did find that the state’s CCAP fraud investigators generally agree with about the level of CCAP fraud, as well as why it is so pervasive.

A second audit will assess internal controls within the program and offer detailed recommendations and is expected to be released next month. The OLA also detailed a “serious rift” between the DHS Inspector General and CCAP investigators that resulted in DHS hiring an audit firm to review the work of the investigative unit, rather than working with investigators to address their serious concerns about program integrity.