Texas Improperly Claimed Some Child Care and Development Targeted Funds

The Texas Workforce Commission (State agency) did not comply with Federal requirements for the use of almost $15 million in CCDF targeted funds for FY 2010. Specifically, the State agency (1) improperly claimed $14.9 million of expenditures that included nontargeted fund activities, (2) improperly claimed almost $32,700 in expenditures that were incurred before the start of the funding period, and (3) did not refund $25,100 to the Federal Government that remained unliquidated after the liquidation period had ended. These errors occurred because the State agency did not have policies and procedures in place to ensure that only expenditures that improve the quality of childcare are reported and to adequately oversee the obligation and liquidation of the targeted funds.

We recommended that the State agency: (1) refund to the Federal Government $14.9 million for expenditures that were not for targeted fund activities or work with ACF to determine whether any of the $14.9 million was allowable, (2) refund to the Federal Government the almost $32,700 for targeted funds that were incurred before the start of the funding period, (3) refund to the Federal Government $25,100 for targeted funds that were not liquidated in the required timeframe, and (4) develop policies and procedures to ensure that it claims only the enhanced portion of payments made to providers that have exceeded licensing standards and strengthen monitoring of CCDF targeted funds to ensure that expenditures are properly obligated and liquidated.

The State agency agreed with our recommendations to refund almost $32,700 for targeted funds that were incurred before the start of the funding period and $25,100 for targeted funds that were not liquidated in the required timeframe, stating that it had already refunded the money. The State agency disagreed with our recommendation to refund the $14.9 million for expenditures that were not for targeted fund activities but agreed to work with ACF to determine whether the expenditures were allowable. The State agency agreed to strengthen monitoring of CCDF targeted funds but did not agree with the recommendation to develop policies and procedures to ensure that it claims only the enhanced portion of payments to providers that have exceeded licensing standards.