(The Center Square) – The Washington State Auditor’s Office in recent years has concluded that the state Department of Children, Youth, and Families lacked adequate oversight over its child care subsidy program, according to audits obtained by The Center Square.
However, in its response the state agency attributed the issues with a 2020 audit due to the COVID-lockdowns and while it was in the process of implementing changes.
While the audit’s finding focused on overcapacity daycares, they exposed the lack of proper oversight and auditing in the system.
State Auditor Pat McCarthy said her office is finalizing an audit of the program, while a former state auditor is now saying recent allegations over fake childcare providers warrant further investigation into the program.
“I hear the word ‘fraud’ and having to do with public money and a public agency, my antenna goes up,” Brian Sonntag told The Center Square. Sonntag was the Washington state auditor from 1992 to 2012.
DCYF’s childcare subsidy program has drawn scrutiny in recent weeks over alleged fraud committed by Somalians claiming to run licensed daycares that do not actually exist. DCYF has previously told The Center Square that it conducts unannounced site inspections of every licensed childcare provider in the state, as well as audits them to determine if they are accurately reporting the number of children they serve.
“The first thing I would do is deploy our fraud specialist and have them go to the agency and begin asking questions, and they can’t NOT answer those questions. It’s a public agency and we at the Auditor’s office have every right to get those answers,” Sonntag said. “The public has every right and every expectation to know what’s going on with their public money.”
When The Center Square reached out to SAO requesting an interview with McCarthy, the office emailed a statement announcing that the office was preparing an audit of the program.
According to the statement, the audit is “part of the Statewide Single Audit, an annual audit that is scheduled for release in three months. It examines how the state uses federal funds in a wide variety of programs, including the CCDF ( Child Care and Development Fund) program and many more.”
In 2020, an SAO audit concluded that the state agency “did not have adequate internal controls to ensure licensed in-home providers complied with child care capacity requirements.” According to the audit, the maximum number for a licensed in-home provider is between 6-12 children.
However, the SAO audit states that when the office requested the attendance records from 31 licensed in-home providers, 29 of them did not respond to SAO and another 29 did not provide records for 2-15 children for whom they received subsidy payments for that month.
“From the nine providers who were missing attendance records, we found six of them had operated in a state of overcapacity at some point during the selected month despite not providing all attendance records,” the SAO audit states, also noting they had operated overcapacity from one to 75 hours.
Out of the 13 providers who provided attendance records, SAO found 11 of them had operated in a state of overcapacity at some point during that month.
According to the 2020 audit, SAO had previously audited DCYF in 2017 and also found “the Department did not establish adequate internal controls to ensure licensed in-home providers complied with child care capacity requirements.”
At the time of the DCYF audits, Ross Hunter was DCYF secretary, a role he served from 2017 to 2025 when he resigned and replaced by former state legislator Tana Senn.
“By not having adequate internal controls in place, the Department increases its risk that it would not detect, in a timely manner, whether providers are complying with the license-capacity rules that help the Department ensure the health and safety of children in licensed in-home care,” the 2020 audit states.
The audit recommended the following actions
Implement internal controls designed to detect overcapacity violations throughout the licensure period.Follow-up with the providers who did submit records requested during the audit.
In its response, DCYF said it “appreciates, acknowledges, and supports the State Auditor’s Office’s (SAO) mission to provide citizens with independent and transparent examinations of how state and local governments use public funds, and develops strategies to make government more efficient and effective.”
However, it argued that the 2020 audit “took place during the beginning of the Covid-19 pandemic and the Governor’s mandatory stay home stay, safe healthy executive order. Due to the timing of the audit, the Department did not have the opportunity to review the exceptions noted in the finding prior to publication.”
DCYF also disagreed with “the cause of the condition. The Department has been working to improve internal controls to identify when providers are over capacity,” noting that halfway through the audit period, it had implemented an electronic time and attendance reporting system that maintains electronic copies of attendance records.
DCYF further stated in its response that it had certain monitoring procedures in place, including:
Random audits conducted by the subsidy team with referrals to licensing for providers that appear to be over capacity.Investigations initiated by public health and safety complaints.Investigation initiated by other departments including Child Protective Service
“The Department will work with providers to gather missing records and further investigate each finding and provide technical assistance to providers regarding their licensing capacity on each of the cases,” the response states.
Sonntag said: “These social service programs, a lot of time they get in a rush and the way they look at it is they need to get money out the door to help the people they’re supposed to help, and sometimes accountability gets overlooked. It was our job at the Auditor’s office to make sure those things got reigned in and accounted for.”
“I would just go in and start asking those questions of the folks in charge and make sure the internal controls are in place and go from there,” he added.
The Center Square has also requested an interview with DCYF Secretary Senn, but has not heard back.
