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State’s Claim of $40 Million “Potential” Fraud in Early Learning Programs Proves Groundless

| October 1, 2013

She can;t figure out the Florida Office of the Auditor General's hysterics either. (Marcin Wichary)

She can;t figure out the Florida Office of the Auditor General’s hysterics either. (Marcin Wichary)

Allegations of $40 million worth of “potential” fraud in Florida’s early learning programs alarmed lawmakers nearly two years ago — but the actual fraud has proved to be relatively minor.

So far, just four cases of public-assistance fraud have resulted in restitution orders totaling $15,670.81.

A December 2011 report by the state Office of the Auditor General projected that parents with children in school-readiness programs could have used as much as $40 million worth of public-assistance benefits for which they weren’t eligible over a three-year period.

The basis for the projection was that some parents were collecting unemployment benefits while their children were receiving subsidized child care in school-readiness programs. So the state Office of Early Learning began a data match of the two programs and referred 634 cases to the Department of Financial Services’ Division of Public Assistance Fraud.

Of those, 69 percent were screened out due to insufficient evidence, 22 percent are still under investigation and 9 percent were referred to state attorneys’ offices, according to Office of Early Learning Inspector General Rodney MacKinnon in an Aug. 1 follow-up to the Auditor General report.

“I am pleased that the improper payments were considerably less than the initial report indicated,” said Rep. Erik Fresen, a Miami Republican and chairman of the House Education Appropriations Subcommittee. “It is critical that we are accountable for the public funds invested in early learning programs.”

Fresen said he would continue to stress accountability in the early learning system.

“We are ensuring increased focus and attention to early learning, which provides the foundation for a child’s educational career,” he said.

The waiting list for children to enroll in the school readiness programs — which provide early learning for low-income working families — has stayed at roughly 70,000 children statewide, with state leaders declining to address the list given the fraud charges. Thousands more children are expected to sign up if new dollars are allocated to reduce the wait.

Harry Duncanson, a certified-public accountant who chairs the Early Learning Advisory Council, has maintained all along that the charge of $40 million’ worth of fraud was wrong.

“I just thought it was a misrepresentation of what they were looking at,” Duncanson said. “They were missing a lot of back-up facts…Hence, all the hysteria about the amount, which many of us in the system for some time knew that just didn’t make sense.”

Duncanson said it was understandable that lawmakers would react the way they did.

“If I was a legislator, and someone brought me a report that said there was a potential $40 million fraud in an agency, I would have been upset and concerned, too,” he said. “My beef was not with them. My beef was with the report itself, and its merits.”

Shan Goff, who took over the Office of Early Learning after its previous director, Mel Jurado, resigned in December 2012, has noted that referrals to the Division of Public Assistance Fraud can take as long as two years to resolve.

Many early learning professionals have argued that the fraud referrals ignored expanded eligibility granted by the Obama administration during the recession, but Goff does not agree.

The state has 30 early learning coalitions that review families’ eligibility for services and match them with providers. Goff told the House Education Committee last week that having the coalitions do the data matches might well be preventing fraud.


“We also believe, anecdotally, between what coalitions are doing, there’s maybe a message that ‘If I give one number about my income to one agency and one number to another agency, they might talk,’ ” she said. “We think intake providers, intake counselors that are having those conversations with families are helping families remember that it has to be accurate and complete information.”

A continuing problem for the early learning coalitions is that they have to match the data basically by hand. There’s no technical capacity to do it, because the Early Learning Information System (ELIS) was never operational.

The Office of Early Learning had expected the technology to be up and running by now, but instead Hewlett-Packard — which was doing the work — settled the contract in July and turned over the source code and hardware. The Office of Early Learning is expected to put out an invitation to negotiate in February.

Meanwhile, the early learning coalitions are still conducting the data matches and sending suspicious cases to the Office of Early Learning for additional investigation.

“From what we can tell, many of the cases don’t get sent to the state attorney’s office for further prosecution,” said Matt Guse, executive director of the Early Learning Coalition of the Big Bend. “It’s definitely gone down over time.”

–Margie Menzel, News Service of Florida

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1 Response for “State’s Claim of $40 Million “Potential” Fraud in Early Learning Programs Proves Groundless”

  1. A.S.F. says:

    Another Republican witch hunt.

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