State officials have cut off payments to two Omaha child care centers after a state audit discovered “flagrant discrepancies” that led to overpayments to the centers totaling hundreds of thousands of dollars.
Department of Health and Human Services employees began calling the parents of children enrolled at Wise Kids on 5829 Northampton Blvd. and Kids Ark Learning Center at 4411 N. 61st Street to inform them the two centers are no longer approved by the state. DHHS authorizes subsidies for the care of poor parents who are employed, looking for work, undergoing medical treatment, incapacitated or enrolled in vocational or educational training.
Parents can call ACCESSNebraska toll-free 1-800-383-4278 for authorization. They also can seek authorization for a new child care provider at the ACCESSNebraska website.
State Auditor Mike Foley says his office, in cooperation with the FBI, examined the billings of the two centers which serve 240 children. Foley sent a 98-page management letter to DHHS and the Nebraska Department of Education [PDF of management letter]. The same owners operated both centers. The audit accuses them of systematically over-billing for child-care services never provided.
“DHHS has had a long and troubled history with these particular child care centers dating back to 2004, and DHHS needs to be more vigilant in monitoring the current invoices from the care centers,” Foley said in a written statement released by his office. “Virtually every invoice we reviewed contained billing discrepancies all of which resulted in overpayments to the care providers.”
The audit charges that the centers used a variety of techniques to receive overpayments. Attendance calendar records provided to DHHS didn’t match those kept by the Department of Education, though they should be virtually identical. The centers, according to the audit, also inflated days, hours and hourly rates. The centers also billed for services rendered on days when they weren’t open for business, according to the audit, or for services to children who were absent on those days. The two also billed for children above their licensed capacity.
Wise Kids and Kids Ark have received more than $11.7 million in federal and state money since 2003. DHHS placed Wise Kids on disciplinary probation in 2005-2006 and fined the center a civil penalty of $5,715.