THE 31 DAYS OF FEBRUARY

1. THE 31 DAYS OF FEBRUARY February Su Mo Tu We Th Fr Sa 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Virginia Department of Social Services Office of Audit Services/Fraud Management Unit

2. Child Care Provider Fraud Pilot VDSS Fraud Management approached Child Care and Development about creating a pilot to investigate Child Care Provider Fraud. LDSS primarily investigate Child Care recipients. Provider investigations too labor intensive. FM and CCD worked together to begin Pilot in November 2005 – 3 LDSS volunteered.

3. Purpose • Identify improper/erroneous payments and/or potential fraud. • Pursue criminal prosecution or administrative action, as appropriate, and to collect overpaid funds. • Identify Child Care policy and procedures that may contribute to erroneous payments to child care providers and assist in the development of revisions. • Identify training needs for child care providers and LDSS.

4. Process • Referrals from LDSS • Investigation • Written Findings Report • Corrective Action Plan • Prosecution • Restitution

5. Investigator Function • Obtain Attendance Records from Provider • Obtain Invoices/Purchase of Service Orders from LDSS. • Compare Attendance Records to Invoices. • Determine if payments were proper or improper. • If improper, determine if intent exists. Refer for prosecution, as appropriate. • Prepare Findings Report for Provider and LDSS. • Obtain Repayment Agreement from Provider. • Share findings with VDSS Child Care.

6. BILLING PROCESS • Agreement for Purchase of Services • Specific agreement for all LDSS Providers– not per child (Purchase of Service Order) • Outlines number of absences allowed, paid holidays, registration fees, summer activity fees, record retention policy, etc. • Enrollment • Same conditions (absences, holidays, etc.) apply to General Public

7. Attendance Records • Lack of standardization in recording attendance. • Providers use one or more methods to record attendance: • Parent sign in sheets • Class attendance sheets • Class meal sheets. • Van pick up

8. Attendance Records • Fails to provide attendance records upon request (lost, misplaced, thrown out). • Submits attendance records that are bogus or altered.

9. Invoices • Does not accurately record absences on invoices. • Double bills for service. • Bills at higher reimbursable rate. • Bills higher fees than charges the public. • Fails to give discount offered to public.

10. Invoices • Bills for service when child is absent a whole month. • Bills for service that would be disallowed by Agreement for Purchase of Services. • Fails to notify LDSS of child’s extended absences. • Bills for children no longer in attendance (“disenrolled” on attendance).

11. Invoices • Bills for service when closed when these days are disallowed by Agreement (snow days, day after Thanksgiving, etc.) “31 Days of February” • Caring for children in a location not authorized by the Purchase of Services Order.

12. Statistics • SF07 – Child Care Subsidy - $144.6 million • Reviewed 22 Providers • Identified $398,953.39 in overpayments • One conviction – 5 years with all but 3 months suspended, served by home monitoring - $228,144.17 • One pending trial • Court Order/Repayment Agreement - $322,569.68 • Restitution - $84,275.12 • 6 paid in full

13. Prevention/FraudAwareness • Clear program rules • Provider training • Automated systems • Monitoring and audits – both internal & external • Fraud investigations

14. Lessons Learned- • Failure to communicate among programs • Providers misunderstanding of payment requirements and procedures • Complicated payment process • Monitoring • Red Flag – no absences

15. Presenters • Sandy Smith – Fraud Program Manager (804) 726-7679 or sandy.smith@dss.virginia.gov • Rob Rizzitello – Investigator (804) 726-7672 or rob.rizzitello@dss.virginia.gov