Scott Walker is not Responsible for the Fraud in the County's Child-Care Program

On Thursday, October 1st, the Milwaukee Journal Sentinel ran a piece in the Milwaukee County section entitled "County's Child-Care Funds not all Spent".  It was written by Steve Schultze, a reporter who the Doyle Administration has previously referred to as a sympathetic reporter to their cause.   The article made several good observations, but unfortunately left out key relevant information that would put the blame where it rightfully belongs - with the state.  But then again, what do we really expect from a reporter who was already caught conspiring against Walker during the state takeover of the "call center"?  

Milwaukee County Underspent Authorized Funds 

In the first paragraph of the MJS article, Steve Schultze says

"Milwaukee County under spent its budget for running the Wisconsin Shares child-care program by more than $4.3 million since 2004 - money that could have gone toward greater fraud prevention, state officials said."

What Schultze leaves out is that the state contract with the County did not include funding for investigating fraud by licensed providers.  This was considered the state's job.  So in 20o7, the County requested permission to add five staff members for the purposes of reviewing the background state licensed providers.  Although the state complied with the request, budgetary concerns emerged that put the funding for those positions in jeopardy. 

In 2008, the state made a presentation illustrating that the state faced an $18 million deficit.  The presentation also projected that cutting county contracts was a viable option for dealing with the budget shortfall.  This left Milwaukee County in a quandary.  They could hire additional staff using the $800,000 of the remaining contract, but this didn't make much sense when the state was considering contract reductions up to about 10%.  Such reductions would potentially force the hand of the County to lay off employees shortly after they had hired them.  More importantly, the state actually warned Milwaukee County not to spend all of the remaining funds precisely because of the state deficit.

Concerning MJS' article, Scott Walker released a statement saying,

"Bottom-line: the troubles are at STATE licensed providers and only the state division can pull the license. The county is ready and eager to assist the state but efforts to shift blame are nothing more than grand political theater that ignores the facts."

The point here is that "state licensed" providers are in the center of the controversy.  Latasha Jackson received nearly $3 million in state funding, and state regulators ignored her 150 violations and internally compiled proof of fraud while issuing her checks.  And this past Friday, a "state official" resigned after his agency approved a $25,000 payment to a child care provider who is currently under investigation for fraud. 

On September 23, the Associated Press ran a story showing that the addresses of four sex offenders matched those of licensed child care providers.  Furthermore, it appears that these same providers were exceeding their child capacity limit by two or three times the prescribed amount, and thereby cheating the state by two to three times in child-care payments. 

It's important to note that this audit was not performed by state agencies, but rather by the Legislative Audit Bureau.  In other words, state agencies do not have sufficient regulatory oversight to prevent fraud in their own child care program.

The Legislative Audit Bureau also uncovered that the Wisconsin Shares program received $20 million in fraudulent funds last year alone.  As heads are starting to roll in state agencies, like the "Department of Child and Families", they are more than willing to spread the love.  There is a lot to answer for and resignations will start to come on a state level as more fraud is discovered.  And since the state is in a partnership with Milwaukee County (where most of the fraud has taken place), some in the state need a scapegoat.  I think a gubernatorial candidate makes the perfect media target, don't you?

State Agencies Looking for a Scapegoat

The problem is that the state, under Governor Tommy Thompson, started the program as a key part of welfare-to-work reform, but very little oversight was authorized.  Reggie Bicha, Secretary of the Department created last year to crack down on child care fraud, said

"It was built on the assumption that people would do good things for kids and be good business stewards, but we have all learned that is not the case"
In other words, the state never put the vital controls into place to prevent fraud, but is now trying to blame Milwaukee County for their partnership in the program.  Expect the political atmosphere to get really smoggy in the next few months.  

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