Audit shows DHHS made up to $12.8 million in improper payments to child care providers

July 9, 2024, 1 p.m. ·

Nebraska Department of Health & Human Services

Up to $12.8 million in payments were made to child care providers as the result of improper billings, according to a recent audit.

The audit was conducted on the Nebraska Department of Health and Human Services Child Care Subsidy program.

A press release stated the aid payments are subsidy assistance given to child care providers. The audit discovered more than 1,000 unique childcare providers were billing the state improperly.

Auditors reviewed a sample of nearly $93 million in federal and state funds spent by DHHS on child care subsidies over a nine-month period in late 2023 and early 2024, and discovered nearly $12.8 million in billings were inflated by providers, according to a statement from State Auditor Mike Foley.

Among the improper billings were instances where DHHS paid for weekend service, paid double and triple for a child during the same period, paid for times when a child was supposedly being cared for but was actually in school, and numerous other alleged violations.

“Some of the spurious billings were so wildly excessive that one wonders whether anyone at DHHS took even the most cursory glance at them before authorizing their payment,” Foley said in a press release. “It appears to me that the invoices were routinely processed and paid with little, if any, meaningful oversight.”

The statement from Foley also said billings were paid for care of 210 children on Thanksgiving Day, when child care centers were not open.

“I appreciate Auditor Foley’s tireless efforts to safeguard taxpayer dollars,” DHHS CEO Steve Corsi said in a press release. “…Our main focus has been to evaluate the department and begin putting in place effective safeguards to ensure taxpayer dollars are allocated properly. These efforts will be continued aggressively. We look forward to the ongoing collaboration with the State Auditor’s office.”

The press release stated DHHS is in process of implementing improvements that include conducting internal reviews and starting the process of recouping funds identified by the audit. The fraud unit is working to recover full or partial grants paid to providers that did not comply with contractual obligations, including billing requirements.