Texas child care programs could see funding delay during national crackdown

Tarrant County child care providers could see delays in subsidy payments from the state after Trump administration officials announced tighter restrictions on child care funding, placing providers in a tough financial position.

Local providers who enroll qualifying low-income families with child care scholarships, which offset tuition costs, were notified on Monday of a potential delay in Administration of Children and Families funding after federal officials announced a requirement that all U.S. states must have “a justification and a receipt or photo evidence” to receive it moving forward. The additional red tape from the U.S. Department of Health and Human Services comes amid fraud allegations at Minnesota child care centers.

Tarrant County officials who disburse this ACF funding told providers it’s unclear how long delays might be.

“We are working with (the Texas Workforce Commission) to get access to (Child Care and Development Fund) funds as quickly as possible for the next payment cycle (Jan. 12-25). Our goal is to minimize any impact this new federal requirement may cause,” Child Care Management Services program director Rita Morris said in the Monday notice to providers.

More than 400 statewide providers discussed the development on Monday in a Zoom call organized by the Texas Licensed Child Care Association. Tim Kaminski, president of the association, encouraged providers to contact their representatives about what the ripple effects would be to their businesses if funding is delayed. Providers were also encouraged to make their voices heard at the next workforce board meeting in their region, which is the network of local offices that receive the subsidy funding from the Texas Workforce Commission that’s then distributed to providers.

Awaiting the release of more information, questions were raised about whether reserves existed to cushion providers if federal funding delays became a reality. Providers also wondered how state officials would follow federal requirements of providing “photo evidence” with almost 150,000 children being served statewide on a daily basis.

“This has been a knee-jerk reaction by the federal government to a situation in one state,” Kaminski told providers. “You can’t cut off our knees and expect that we’re going to stay open. We can’t subsidize the subsidy program, and we’ve been doing that for too many years. So contact your reps, contact your senators.”

Tarrant County providers that operate multiple child care programs, including Child Care Associates and the Center for Transforming Lives, said they’re waiting on additional guidance from state officials.

Gov. Abbott announces investigation in Texas

Gov. Greg Abbott also announced on Monday that he’s directing state agencies, the Texas Workforce Commission and the Texas Health and Human Services Commission, to investigate potential child care funding fraud. In a letter informing agency leaders of the probe, he noted “strong anti-fraud processes” were already instilled, including routine audits and in-person site visits, but more can be done to protect children and taxpayers. The state’s percentage of “improper payment rates” is 0.43%, Abbott said.

“Recently, the Trump Administration and independent journalists have uncovered potential systematic fraud in subsidized child care systems in states like Minnesota,” Abbott said in a statement. “Such fraud will never be tolerated in Texas. Today, I directed Texas state agencies to take proactive steps to prevent, detect, and eliminate misuse of taxpayer funds to protect the integrity of Texas’ Child Care Services Program.”