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Many underprivileged kids in Durham County got a very cold Christmas present last year, as around 250 children on a Smart Start scholarship for government subsidized childcare were abruptly and unexpectedly dropped from their scholarship, leaving them with few other alternatives for affordable childcare. Furthermore – the agency responsible, Child Care Services Association (CCSA), has refused to come forward and explain how it mismanaged millions of dollars of taxpayer money.
In mid-November of last year, parents and childcare providers received notice that hundreds of children would be terminated from their Smart Start scholarships effective December 17th, forcing many childcare centers to close and leaving many parents scrambling to find another childcare provider. Children enrolled in the program were promised a 12 month contract for subsidized childcare, but the majority of these contracts were cut short, with only a little over 100 children receiving the full term of the scholarship. One day care provider, who previously tended to 18 children, reported losing over half of them due to the shortfall, forcing her to lay off an employee and cutting her remaining employees’ hours in half.
This story, which originally aired on WRAL- TV in December, attributed the crisis to being a result of budget cuts. Internal documents, however, tell a different story.
CCSA’s budget numbers reveal an exorbitant amount of spending leading up to the mid-year budget cuts. While CCSA was budgeted $3.4 million for fiscal year 2010-11, which spans from July 1 to June 30, a report showed that 6 months into the fiscal year they had already spent over two thirds of their budget, spending at a pace that would have overspent their total budgeted amount by $1.2 million by the end of the year. Serious questions remain as to how such a gross structural deficit could have gone unnoticed or unreported.
In response to a number of specific inquiries attempting to determine the cause of the crisis, CCSA Senior Vice President Linda Chappel refused to reveal any specific information in the following reply: “State budget cuts to Smart Start funds and our state subsidized child care fund, growing populations of vulnerable children, the unavailability of expected federal funds and lower attrition rates lead [sic] to this unfortunate situation.”
A review of CCSA’s budget for the Smart Start scholarship program reveals a 5 percent budget reduction for the program compared to the prior fiscal year. While the refusal of CCSA to produce necessary documents makes it impossible to determine whether the budget cut came in the middle or the beginning of the fiscal year, a relatively minor could not have produced such a shortfall.
More importantly, it was the responsibility of CCSA at the writing of the budget last summer to adjust participants in the program according to funding available. And in contrast to Chappel’s claims about growing populations, CCSA actually reduced the number of participants in the scholarship by 11 percent in their budget for the current fiscal year. And yet CCSA managed to burn through two-thirds of its yearly budget in just six months.
The remaining questions about the attrition rate (the rate at which children left the Smart Start program) and to what extent stimulus funding contributed to the shortfall remain unanswered, due to CCSA’s refusal to divulge that information.
CCSA did not respond to repeated attempts to contact their office via email and voicemail. Upon an in-person visit to CCSA headquarters, CCSA staff denied all access to requested records relevant to the Durham County childcare crisis. Although CCSA runs the Smart Start scholarship program with taxpayer money, Chappel claims to be outside of Public Records Law and therefore unwilling to oblige the public with critical information pertaining to why so many children were dropped from this program.
CCSA has administered the Smart Start Scholarship Program in Durham County for a little over a year, winning the contract with the Durham County Smart Start for FY09-10 over the local Department of Social Services (DSS), who administered the program for years prior to CCSA. Durham County Director of Social Services, Gerri Robinson, spoke briefly about how the program was administered previously under DSS. “It is almost impossible for us to have had a similar situation happen to us,” she said, citing rigorous monthly monitoring requirements as a safeguard against excessive spending. Reports suggest that ironically one of the reasons DSS lost the contract for FY09-10 was due to not spending all of the funding in their budget.