Nebraska Improperly Claimed Some Child Care and Development Targeted Funds

Of the $4.4 million of targeted funds that we reviewed, the State agency did not comply with Federal requirements for the use of $2.9 million in Child Care and Development Fund (CCDF) targeted funds for fiscal years (FY) 2004 through 2008. Specifically, the State agency (1) improperly obligated $2 million of targeted funds after the obligation period had ended, (2) improperly claimed $974,000 of expenditures that were not for targeted funds activities, and (3) did not refund to the Federal Government $37,000 of targeted funds that either were returned by the grantee after the obligation period had ended or remained unliquidated after the liquidation period ended. For the remaining $1.5 million of CCDF targeted funds that we reviewed, the State agency obligated and liquidated the funds in accordance with Federal requirements.

The State agency did not have policies and procedures in place to direct adequate oversight of the obligation and liquidation of the targeted funds. In the absence of necessary policies and procedures, the State agency could not correctly identify which expenditures would be allowable for a particular FY.

We recommended that the State agency (1) refund to the Federal Government $2 million for targeted funds that were not properly obligated, (2) refund to the Federal Government $974,000 for expenditures that were not for targeted funds activities, (3) refund to the Federal Government $37,000 for targeted funds that were returned by the grantee after the obligation period had ended or were not properly liquidated, and (4) develop policies and procedures to monitor the obligation and liquidation of CCDF targeted funds to ensure that expenditures are properly obligated and liquidated. The State agency partly agreed and partly disagreed with our recommendations.