Anatomy of a Subsidized Child Care Fraud

Congratulations are due Raquel Rutledge of the Milwaukee Journal-Sentinel who took home a Pulitzer Prize for her series “Cashing in on Kids” that exposed deception and fraud in the $350 million Wisconsin Shares program. Besides being compelling reading, Rutledge’s series is a cautionary tale for policymakers and administrators of child care programs. That’s because, in addition to outright fraud, Rutledge documents ways in which the program’s system of rules and regulations, along with lax enforcement, enabled some parents and providers to abuse the system in ways that were perfectly legal. One such example is an arrangement by which sisters or other relatives were able to stay home, swap kids, and receive taxpayer dollars.

Most of the tens of millions that Wisconsin overpaid for child care services, however, were due to criminal activity — sometimes committed by those with ties to a prominent crime boss. On the administrative oversight side, Rutledge did her homework, looking at state-level administration but also digging down to the local level where she found that politics ruled the day, those who signed off on bogus child care applications wound up being promoted, and caseworkers were protected from public scrutiny. Another problem: David Edie, an early education policy analyst for the Wisconsin Council of Children and Families told Rutledge that when counties manage child care money and don’t spend it wisely, it “doesn’t really affect county government very much.”

The series led to criminal indictments and legislation aimed at eliminating fraud and keeping criminals out of the child care business. Of course, it will always take diligent enforcement and a watchful press to see that what lawmakers intend really happens. As concerns the latter, we can’t help voicing concern as we see the ranks of reporters covering education shrink alongside the dwindling fortunes of our newspapers. Still, a great many excellent reporters remain who are covering the positives as well as the occasional negative story on the early care and education beat. The entire series and a compelling video from Rutledge on how she went about her investigation are available on the Journal-Sentinel web site.