When state regulators acted on a tip last year that an unlicensed home day care in the West End neighborhood of St. Louis was illegal, they found the provider watching 15 children.
Of the 15 in her care, nine were related to the caregiver and six were not, state records show. Missouri law allows unlicensed providers to serve an unlimited number of related children, including nieces, nephews and grandchildren. But it limits unrelated children to four. So the regulators found the provider was over the limit by two kids — and running an illegal day care.
Yet, records show, that didn’t stop the state of Missouri from paying her $1,103 in child care subsidies that month for six children. Or to continue paying her an average $807 in subsidies every month since.
It’s a situation found repeatedly in a Post-Dispatch review of Missouri’s notoriously lax system for monitoring day cares.
That system not only makes it difficult to weed out illegal day cares but fails to share information on potentially bad providers.
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Consequently, federal and state money to help low-income parents afford child care continues to flow — sometimes to caregivers who are illegally watching upward of 10 children at once.
Over a recent 40 months, about $200,000 in such payments went to providers who had been cited for exceeding child counts. But that figure likely represents just a tiny fraction of the subsidies that have been collected by violators who have not been caught.
“It’s money other people could use,” said Carol Scott, CEO of Child Care Aware of Missouri, which has long pushed for better regulation of child care in Missouri. “It’s money that could have helped those children be in a better child care, or it could have helped other children.”
For some 30 years, Missouri has allowed unlicensed churches and home day care providers to receive the subsidy with no inspections or direct oversight.
The state is planning to introduce monitoring of these subsidy-receiving day cares next year, in part due to new federal standards.
But for now, the state can only investigate cases if a hotline call is made. And even when the state finds a violation, it lacks the authority to follow up beyond one visit and make sure providers are complying for the long term, unless a new hotline call is made.
Much of the problem appears to root from a failure of two state departments to coordinate on illegal day cares.
The Department of Health and Senior Services is responsible for inspecting licensed day cares and investigating violations. The Department of Social Services administers the federal subsidy payments.
Officials from the two departments did not respond to specific written questions about the degree to which they collaborate to stop payments to illegal providers.
A spokesman with the Department of Health and Senior Services said in a written statement the office is “putting a procedure in place to share information with (the Department of Social Services) regarding violations by child care providers who receive state or federal funds.”
A similar statement from the Department of Social Services confirmed that the department has the statutory authority to revoke the subsidy to any provider who is found to be in violation of their contract. Those violations include caring for too many children.
Yet, the department could not produce a single document showing that it had notified any of the illegal home day care violators identified in the newspaper’s analysis that their federal subsidies were being cut off.
‘NOT A BAD PLACE’
On a weekday last month, two reporters visited the St. Louis home day care provider found last year to be running an illegal day care on a tidy block of classic brick homes on Enright Avenue. The reporters counted 12 children — toddlers, preschoolers and elementary school age — in the backyard and peeking out the open back door leading to the home. There were also two other adults.
The provider, Georgene Mason, said the children were all relatives, some of them visiting from out of town. She said they were there for a birthday party, though there were no balloons or cake where they ate lunch at tables in the backyard.
Mason gave the reporters a tour of her well-kept three-story brick home, also known as Gabo’s Day Care. A baby room in an upstairs bedroom was lined with four quality cribs. A former bedroom with a banner that read “Welcome to Class” over the door had books and toys and cots for naps, but also an open window without a screen, only partly blocked by a low-slung bookcase.
Mason said she has a curriculum and runs parents nights. She showed paperwork proving she worked successfully with a local state-funded agency that helps subsidy-receiving child care providers improve their care and curriculum.
And she said she was legal.
“It’s not like they’re housed in here all day without any recreation,” she said, later adding: “I might not be licensed, but it’s not a bad place.”
Beyond her word, there were few means of checking whether she was complying with state enrollment limits. It would take someone such as a neighbor to make a hotline complaint for state regulators to come back and check if all the children she were caring for were related to her.
Despite this uncertainty, records show the state has paid Mason more than $38,000 since the start of 2011.
The Post-Dispatch analyzed all 159 Missouri day cares that were discovered to be operating illegally from 2012 through 2013.
About 90 percent of those day cares did not receive subsidies.
In 17 cases, the illegal providers had received a subsidy payment at some point in the 40 months from the start of 2011 through last April. Thirteen of those were getting paid when or even after they were caught.
Collectively, the 13 were paid more than $200,000 between the start of 2011 and last April. Five providers, including Mason, are still being paid.
A STATEWIDE PROBLEM
Court records further show some of the providers were paid while facing misdemeanor charges from local prosecutors alleging they were running an illegal day care, a charge that typically carries a fine of $100 or less for a first offense. All of them got paid by the state even after they pleaded guilty in court.
One Kansas City provider continued to receive $484 in average monthly subsidies despite failing to appear in court on two separate charges of operating an illegal day care. Court records show, a warrant was issued in June for her arrest for failure to appear.
The 13 illegal providers were from all around the state. They were found in subdivisions in relatively wealthy St. Charles County where one O’Fallon provider who was paid about $685 monthly from the state had a security camera on her front door, the windows blacked out.
They were found in poorer urban areas in Kansas City and St. Louis where the state pays a higher subsidy rate. And they were found in rural areas, such as Ashland, about 15 miles south of Columbia. In that town, regulators found a provider to be caring for 11 unrelated children and three related ones in her apartment. She received more than $1,800 in payments for three months after she was caught.
In Stockton, an hour northwest of Springfield, records show a provider was caught with 10 unrelated kids in April 2012. She continues to be paid an average of $575 a month by the state.
In St. Charles County, two illegal providers were running larger child care centers. One of them, records show, had lost its license when the secretary of state dissolved the child care center’s incorporation in January 2012, a move that immediately disqualified the center from being licensed.
And yet, the state continued to pay out more than $10,000 in subsidies to the center for five months. At one point during those five months, records show, regulators found the unlicensed, illegal center operating with 42 children in attendance.
Those who advocate for quality child care in Missouri warn that the number of illegal day cares in the state is likely far higher than the 159 discovered by regulators in the past two years. That’s because the state currently does not visit or inspect unlicensed day cares and relies on a hotline reporting system to root out the illegal ones with too many kids.
Most illegal day cares are never reported and operate under the radar of state regulators and police in rural and urban areas, said Scott, of Child Care Aware of Missouri.
Advocates also warn that there is probably far more taxpayer money lost to fraud. Some providers, for example, may be providing inflated attendance records, thus drawing subsidies on more children than are in their care.
The money at stake is significant. Last year, about $111 million of federal and state subsidies were paid to Missouri child care providers. The bulk of the payments went to licensed child care facilities, which are routinely inspected. But $38 million went to unlicensed facilities, and most of that — about $25 million — was paid to home day care providers.
A WAKE-UP CALL
Earlier this year, the federal government recognized the issue and required all states receiving the subsidy money through the U.S. Department of Health and Human Services to begin monitoring facilities receiving the money for safety and quality.
Next year, the Missouri Department of Senior Services’ Children’s Division will begin visiting subsidy-receiving day cares, including — for the first time — unlicensed home day cares and license-exempt religious facilities.
Scott, of Child Care Aware, said she hopes the problem of illegal day cares getting subsidies will be rectified as the new system is developed. State officials plan to meet with parents, child care providers, regulators and others involved in child care to come up with the system, she said.
“Nobody in this state has ever systematically convened all these stakeholders to put meaningful input to design a system that gets beyond a few loud voices,” Scott said.
When child care regulators identify an illegal day care, they often encourage the provider to become licensed and inspected so the provider can stay in business and improve quality.
But of the 17 subsidy-receiving providers found to be illegal in the past two years, just one of them opted to become licensed.
Andrea Williams said she ran a home day care out of her Florissant ranch home for several years. In June 2013, records show, Williams was found by state regulators to be over the limit by one child. She was charged and pleaded guilty to operating an illegal day care. Williams had been receiving an average $1,085 in monthly subsidy payments for up to six children.
She said the incident was a wake-up call. She said it had always been her goal to become licensed, but personal issues had gotten in the way. Last April, she completed her paperwork and is now qualified to care for up to 10 children over age 2 in her home. Though she continues to receive subsidies, her licensing now subjects her to state inspections which routinely check on enrollment limits.
Mason, the provider who was watching 12 kids earlier this month while receiving subsidy, said she wants to get licensed so people will know she is legitimate, and not like the many home day cares near her that she says just warehouse kids.
But she said the subsidy payments in no way cover the expenses of caring and feeding the kids. She said she can’t afford the $7,500 in home improvements needed to comply with licensing standards. Most of the money would go for a fence.
She said she is asking a local radio station to promote a fundraiser to pay for it.
Joel Currier of the Post-Dispatch contributed to this report.