CalWORKs, Stage 2 and 3 and Alternative Payment Programs
Best Practices for Program Integrity Report
Required by Chapter 229, Statutes of 2004
(SB #1104, Committee on Budget and Fiscal Review)
California Department of Education
Child Development Division
Curriculum and Instruction Branch
This report is prepared in response to Chapter 229, Statutes of 2004 (SB #1104, Committee on Budget and Fiscal Review). This Budget Trailer Bill required that the Department of Education collect "a survey of best practices from both California agencies and providers and from other states, "and" make any identified best practices available on its Web site by March 1, 2005."
This report is intended as a compendium of choices available to policy-makers and operators of CalWORKs and Alternative Payment (AP) child care programs. Pursuant to other language in SB #1104, the Department will present options regarding which of the practices might effectively target California's program integrity needs in a subsequent report scheduled for submission to the Legislature and the Governor on or before April 1, 2005.
In this report the Department attempts to faithfully represent the differences in local program operations described in both written and verbal input. There are differences in definitions of fraud, in indicators used by local agencies to identify potentially fraudulent cases, and in operational standards and practices. Therefore, procedures viewed by some agencies as "best-practices" essential to program integrity went unmentioned by other agencies.
There are also significant differences between urban and rural agencies. Rural agencies tend to rely on labor-intensive practices that might prove too expensive in an urban environment. Urban agencies tend to rely on computer databases and matches that might be unnecessary in rural areas.
The most frequent recommendation received from local agencies involved the need for statewide consistency in the definition of fraud and the consequences for fraudulent behavior. Currently, criminal prosecution in Stage 1 and "service termination" in Stages 2 and 3 are the only avenues available for imposing penalties for fraudulent behavior. Overpayment collection in Stage 1 depends on voluntary repayment or a court order resulting from prosecution. In Stages 2 and 3, overpayment collection depends on a legal determination (such as small claims court) establishing liability. Neither local AP programs nor local county welfare departments are authorized to mutually enforce penalties or overpayment collection efforts.
Consequently, there is a "revolving door" in child care in which parents terminated for program violations in Stages 2 or 3 re-qualify for subsidized care in Stage 1. Information received from the National Child Care Information Center (NCCIC) indicates that other states have recently enacted statewide definitions for child care fraud and penalties for fraud and other intentional program violations.
Despite local differences, it is clear from the input that local agencies have invested a great deal of organizational effort in the area of program integrity. In viewing the data in his report, it may be important to evaluate the relative effectiveness of local flexibility versus statewide uniformity as strategies for improving program integrity.