During the 2002 fiscal year, the U.S. Department of Health and Human Services (HHS), Office of the Inspector General, Administration for Children and Families (ACF), as well as the Office of Management and Budget (OMB), agreed to develop an Erroneous Payment Assessment Plan. The purpose of the plan was to identify and reduce improper payments in relevant HHS programs in response to the Improper Payment Information Act of 2002. In 2003, the Child Care Bureau (CCB) began a pilot project to determine whether there is a cost-effective approach or methodology for estimating improper payment amounts or rates in the Child Care Program.
Phase I of the pilot project involved an initial State Partners Meeting with 11 volunteer states. This meeting allowed state partners to describe and define the problem of improper payments and to exchange ideas about how to proceed with the pilot project. In defining the problem, many aspects of existing state business practices and workflows—across program areas such as eligibility, application processing, benefit calculation, time and attendance reporting, and payment processing—were cited as reasons for existing improper payments. Based on the issues raised at the State Partners Meeting, the CCB then conducted six site visits and shared information collected during the site visits at a second State Partners Meeting held during September 2004.
In October 2004, the CCB contracted with Walter R. McDonald & Associates, Inc. (WRMA) to develop and pilot a common methodology that states could use to compute a child care error rate (Phase II). WRMA and CCB conducted the error rate pilot study in four states: Ohio, Arkansas, Colorado, and Illinois and conducted telephone interviews with five additional states to gather information on improper payments activities. The pilot study visits in each of the states included a review of child care program and administrative processing to determine the extent to which existing child care business practices were contributing to improper payments. The error rate pilot study demonstrated that improvements to business processes, workflows, and administrative practice to reduce administrative error could result in preventing and deterring improper payments caused by clients, as well as providers.
In October 2005, the CCB asked WRMA to expand upon the findings from the pilot study and analyze the costs incurred by the states, counties, and federal participants to conduct the error rate pilot project. In addition to the data from the pilot study, the cost analysis drew upon data from California to allow for a comparative analysis regarding the projected costs to adhere to the OMB statistical standards. WRMA worked with the CCB to host a Technology Review Conference and Ideas Fair, which provided an opportunity to share information and to encourage the use of child care information systems technology in preventing erroneous payments. WRMA and the CCB collaborated on designing the event’s agenda and lining up speakers, as well as providing all of the logistical support for the day and a half meeting for state representatives and information systems provider representatives.
In March 2006, the CCB asked WRMA to assist in the development and pilot of a State Control Self-Assessment Instrument. Initially developed with Federal Region VII staff and the State of Kansas, WRMA assisted in extending the pilot project to an additional nine states in the remaining ACF regions. Concurrently, the CCB and WRMA conducted a second error rate pilot project in five states: Oregon, New Jersey, Florida, Kansas and West Virginia. WRMA also analyzed and reported on the results of a CCB administered state voluntary survey collecting information about states' policies and practices related to improper payments.
The CCB also asked WRMA to further assist states in using information technology to reduce improper payments by developing an Information Technology Guide to describe major child care software tool to prevent and identify improper payments. The guide presents the value and disadvantages associated with each; describes the advantages and disadvantages of various approaches to information systems; and provides guidance to states for contracting with software companies. To view the First and Second Error Rate Pilot Studies, the State Internal Control Self Assessment Instrument, and Information Technology guide click here.
In September, 2007, the CCB contracted with WRMA to provide training and technical assistance to all states to comply with a new ACF Child Care Development Fund (CCDF) regulation to compute a national error rate for improper payments in the administration of the CCDF. Under a previous task order, WRMA developed and tested a methodology to compute an error rate to measure improper payments in the Child Care Program. WRMA assisted the Child Care Bureau (CCB) in the development of the Data Collection Instructions and required forms that received OMB approval with the publication of the final rule. WRMA developed all error rate methodology training materials which are delivered via distance learning Webinars, and provided training, technical assistance, and site visits to one third of the 52 states, (including D.C. and Puerto Rico) which conduct the error rate methodology every three years on a rotational cycle. WRMA provided TA and training to the 18 First Year Reporting States, which reported in June 2008. WRMA analyzed the findings and wrote a final report summarizing the First Year Reporting State results and the national error rate measures. WRMA developed a national error rate tool to compute the national error rate measures. Currently, WRMA is providing technical assistance and training to the 34 Second and Third Year Reporting States, the 17 Second Year Reporting States reported in June 2009.
