Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Child Care Claims at the North Carolina Department of Health and Human Services' Division of Child Development for the Period January 1, 1996 to March 31, 1999," (A-04-01-00006)

October 8, 2002


Complete Text of Report is available in PDF format (7.3 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

At the request of the Administration for Children and Families, we audited child care claims at the North Carolina Department of Health and Human Services' Division of Child Development for the period January 1, 1996 to March 31,1999.  The objective of the audit was to determine whether the state was paid for unallowable At-Risk, Child Care and Development Block Grant, Child Care and Development Fund, and Social Services Block Grant (Other Grants) child care claims.  Our stratified random sample of 230 Other Grantsí child care line items showed that 26 did not meet the requirements for federal financial participation (FFP).  As a result, the state was reimbursed $18,275,715, FFP in unallowable Other Grantsí child care payments.  In our opinion, the unallowable payments resulted from the stateís inadequate review of a consultantís identification of children who were determined to be eligible for a specific grant.  Each grant had different requirements; yet, the stateís accounting system did not identify which grant program was used to pay for a childís care.  In addition, the stateís inadequate instructions to the counties resulted in insufficient documentation to support eligibility factors and the need for services.  In addition to procedural recommendations, we recommended that the state refund the $18,275,715, FFP overpayment.  State officials generally disagreed with our findings and recommendations.