The Office of the Legislative Auditor released a special review “Child Care Assistance Program: Assessment of Internal Controls” on Wednesday, following an initial investigation into daycare fraud allegations. The newest report found the Department of Human Services’ (DHS) program integrity lacks controls to effectively prevent, detect, and investigate fraud in Minnesota’s Child Care Assistance Program (CCAP).

“The report shows the need for substantial and systemic changes at the Department of Human Services,” said Senator Mark Johnson (R-East Grand Forks). “After reviewing the audit, it is clear that major common-sense changes must take place to turn CCAP around. The situation is unacceptable and something that we will work to resolve through our own initiatives and the recommendations from the OLA.” 

The OLA’s review also determined that DHS and local human services agencies must do more to develop, coordinate, and implement policies, processes, and resources to identify and respond to the risk of fraud in CCAP.

Earlier this session, the Legislative Auditor released its special review of the CCAP providing a broader view of daycare fraud allegations. The OLA’s report detailed widespread fraud in the program, lack of internal controls at DHS and a “serious rift” between the DHS Inspector General and CCAP investigators caused in part by DHS’s unwillingness to address the serious concerns about program integrity.

Just this week Senate Republicans announced a plan to freeze spending on the controversial CCAP until the state can prove to Minnesotans that fraud has been sufficiently rooted out of the system.