Missouri paid more than $170,000 to several child-care providers that failed to follow through on plans to open or expand facilities, according to a state audit released Monday.
Auditor Tom Schweich also faulted state officials for allowing what he called “a pretty serious conflict of interest” in which a supervisor at the Department of Elementary and Secondary Education also directed a University of Missouri entity that received state contracts to assess preschool programs.
The audit focused on programs financed by Missouri's Early Childhood Development, Education, and Care Fund before June 30, 2012. The fund had received its revenues from casino fees but, under a change passed last year by lawmakers, now gets a share of Missouri's proceeds from a national settlement with tobacco companies.
Schweich gave state officials a “poor” rating for the management of the fund, the lowest grade possible on his rating scale.
Among its numerous findings, the audit cited three specific grants awarded by the Department of Social Services for child-care providers to open or expand their facilities:
• One grant provided $89,000 to a child-care facility to expand its capacity by 24 slots, but the audit said the center increased capacity by 14 spots and then was sold within less than a year to a buyer who did not wish to continue in the state grant program.
• Another grant provided $60,000 for a new facility capable of caring for 16 children, but the center never was built.
• A $22,500 grant was awarded to operate an in-home child care facility, but no children ever attended. The grant included $18,700 for the owner's salary, but the owner said she received no interest in any children attending her facility, the audit said.
“We don't have any evidence of fraud” in those three cases, Schweich said. “But there was no serious effort to get the money back, and that was our problem.”
The Department of Social Services said Monday that it is seeking to recoup $89,062.50 from two of the entitites, in Dexter and Higginsville, but had not received any money as of June 1.
In a written response included in the audit, the department said the third facility had complied with the legal obligations of its contract.
The Legislature stopped funding the department's start-up and expansion grants to child-care facilities in July 2012. But the department said it agrees with the auditor's recommendation to strengthen its policies and procedures for contracts.
Schweich also cited an alleged conflict of interest involving Kathy Thornburg, although she was not mentioned by name. Thornburg was the assistant commissioner in the Department of Elementary and Secondary Education for the Office of Early and Extended Learning from April 2010 through August 2012 while also serving as director of the Center for Family Policy and Research at the University of Missouri-Columbia.
In September 2010, the state education department awarded a no-bid contract to the university entity to perform assessments of preschool programs, the audit said. The state Department of Social Services awarded contracts to the university entity in October 2010 and September 2011 to conduct educational assessments of child-care facilities.
Thornburg was not directly involved in awarding the contract or approving payments, but she supervised state employees responsible for issuing early childhood contracts and continued to work on the contracted programs through the university initiative, Schweich said.
“It's clearly a conflict of interest, and it just undermines public confidence when things like that happen,” Schweich said.
The education department said in a written response attached to the audit that it “will continue to avoid apparent conflicts of interest.” The audit said the state agency and university determined when Thornburg was hired by the state that there was no conflict because she would not be approving state contracts between the entities.
Thornburg did not immediately return messages seeking comment Monday.