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 Justin Eichorn (R-Grand Rapids) released a statement:

“Today’s report casts a troubling view of this administration and the past administration in regards to how they have approached child care fraud in this state. It seems that the Governor’s administration and the Department of Human Services have turned their back on solving this widespread problem. In fact, they’ve gone so far as to disregard their own investigator’s opinions, issuing an extenteral audit to directly disprove them.  This is a disturbing level of hostility, especially when you consider that the chief investigator of CCAP fraud believes the fraud in Minnesota could be as high as 50%, or 100 fraudulent centers committing over $100 million in fraud. Nobody likes a black eye, but I hope the administration respects the severity of this issue and works with the legislature to ensure that it is not allowed to continue in the future.”    

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 Stillman’s opinions 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.