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Legislative Update from Rep. Glenn Gruenhagen

Friday, March 15, 2019

Dear Neighbors,

On Wednesday, the nonpartisan Legislative Auditor released their long-awaited report on fraud within Minnesota’s Childcare Assistance Program (CCAP). CCAP provides financial assistance to help families with low incomes pay for child care.

In 2018, the state paid $254 million in subsidies for services provided to approximately 30,000 children from CCAP eligible families. Of that $254 million, federal revenues contributed about $119 million, the state contributed approximately $132 million, and counties contributed about $3 million

As you can see, a lot of money runs through this program every year. Without proper controls and oversight, it is ripe for fraud.

The OLA report found that fraud is indeed taking place within Minnesota’s CCAP program. While the report does not speculate on how much money has been fraudulently obtained through the program, they do believe that the level of fraud is more than the $5 to $6 million that prosecutors have been able to prove to date.

The OLA also detailed a "serious rift" between the Department of Human Services’ 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.

This “serious rift” is especially concerning as we have seen time and time again that despite investigators at DHS sounding the alarm that fraud was indeed occurring, higher-ups have not provided the support needed to adequately pursue allegations. Instead, they have resorted to hiring outside firms to investigate claims of fraud—essentially paying to have others do their jobs for them.?

??????This lack of trust between political appointees at the department and fraud investigators is extremely alarming and demonstrates a lack of urgency or seriousness about the fraud taking place in CCAP.

While the report did not answer all the questions folks had following last year’s explosive report from Fox 9, it confirms that there is indeed fraud taking place within the CCAP program.

We need to take action this session to improve program integrity, and put systems in place to catch and eliminate fraud. House Republicans have several proposals that would improve program integrity and bring much needed oversight to these programs.

Ideas include:

  • Moving the Inspector General into its own independent agency, which ensures that the taxpayer’s watchdog is not reporting to the same agency it investigates.
  • Requiring private oversight in the form of surety bonds for those child care providers taking over a quarter-million dollars in assistance. This is a practice that has been employed in our Medical Assistance program.
  • Preventing CCAP providers and recipients who've been caught wrongfully obtaining funds from moving on to other child care revenue streams.
  • Establishing that CCAP attendance records must be provided at the time of request and that records produced subsequent to that are not valid.

These are just a few of the proposals so far, with more on the way. I strongly urge my DFL colleagues to take fraud in our public programs seriously and schedule hearings on these bills. In the meantime, stay tuned for more information on this as a follow up report is due in early April.

Staying in Touch

That’s all for this week’s update. I urge you to contact me if you have any legislative questions, concerns, or ideas. I can be reached by phone at 651-296-4229 or via email at rep.glenn.gruenhagen@house.mn.

Thanks and have a good weekend,

Glenn

 

 

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