Minnesota Office of Legislative Auditor Releases Report Indicating Massive Fraud in Child Care Assistance Program

The highly anticipated report from the Office of Legislative Auditor (OLA) regarding fraud in the Minnesota Child Care Assistance Program (CCAP) was released this morning. The report confirmed that millions of taxpayers were defrauded by the Minnesota Department of Human Services who doled out millions of dollars to daycare centers across the state.

According to Representative Jeremy Munson (R-23B) of the New House Republican Caucus, the average Minnesota CCAP  family receives $27,000 per year which is paid directly to the childcare provider. Scott Stillman, a former Department of Human Services employee, claimed the rate of fraud is 70-80% of the total of program dollars. In 2018, Minnesota paid out $254 million in CCAP subsidies; this means that approximately $203 million of the program total was fraud!

The report from the OLA include:

  • There is a serious rift between the DHS Inspector General, Carolyn Ham, and CCAP investigators.
  • Carolyn Ham lacks independence from DHS management.
  • In 2010, the US Government Accountability Office claimed that CCAP was vulnerable to fraud.
  • In 2014 the Minnesota Office of Inspector General issued a report concerned about the pattern of CCAP fraud.
  • Only $6 million in fraud has been successfully prosecuted in Minnesota.

“In 2017, 100 Minnesota childcare centers received over $117 million in taxpayer funds. The Office of Legislative Auditor finds this deeply concerning. They found intentional over-billing, with 15 centers billing over $56.3 million in CCAP funds” said Rep. Munson. “This program is flawed and we need to get government out of the childcare business.”

Video of today’s hearing can be viewed below: