1. THE 31 DAYS OF FEBRUARY February February February Su Mo Tu We Th Fr Sa 1 2 3 4 5 6 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 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. Identify improper/erroneous payments and/or potential fraud. Pursue criminal prosecution or administrative action, as appropriate, and to collect overpaid funds. 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 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. Identify training needs for child care providers and LDSS.

4. Process Referrals from LDSS Referrals from LDSS Investigation Investigation Written Findings Report Written Findings Report Corrective Action Plan Corrective Action Plan Prosecution Prosecution Restitution 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 Agreement for Purchase of Services Specific agreement for all LDSS Providers– not per child (Purchase of Service Order) 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. Outlines number of absences allowed, paid holidays, registration fees, summer activity fees, record retention policy, etc. Enrollment Enrollment Same conditions (absences, holidays, etc.) apply to General Public Same conditions (absences, holidays, etc.) apply to General Public

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

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

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

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

11. Invoices Bills for service when closed when Bills for service when closed when these days are disallowed by Agreement 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. Caring for children in a location not authorized by the Purchase of Services Order.

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

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

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

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