Issues with Maryland child care scholarship payments

This group of women have a lot in common, even though this was the first time some of them had met in person. They all run daycares. They all love their jobs. And they're all having problems with scholarship payments from the state.

That's why they gathered at Martina Johnson's home, which also doubles as her business, Tina's Tots Daycare in Park Heights. She's been doing this for 14 years. All of her clients are on scholarships funded by the Maryland State Department of Education (MSDE). She says she's never had issues until the payment system changed in 2023.

"With the scholarships, we got to the point now where we don't even want to take them. I talk to so many providers, they're just fed up, they don't want to take them,” Johnson told WMAR-2 News’ Elizabeth Worthington, adding that all of her clients rely on the scholarship money.

Under the new system, MSDE issues "advance payments" based on the number of kids enrolled at the beginning of each month.If anything changes, like a new child enrolls, or a child leaves, the state will reconcile the payments. But not until months later.

"We can't survive off three months of back payments. Our bills are now,” Johnson said.

And the providers we spoke to say on some occasions payments have been skipped entirely.

One woman said she was informed in June that she was overpaid in November, and owed the state hundreds of dollars. But she says she never even got paid in June, so she was struggling to pay back what she owed. Other women said they had to take out loans, overdraw their accounts, and dip into their savings either because they owed the state money, or they were waiting months for their correct payments.

"We just want things to go back to the way it was. We want to get paid on time. We don't want to guess what we're getting paid. We want to plan stuff. This is the first year where I can't do anything with my family because I don't know when I'm gonna get paid. And I've exhausted my savings; I've exhausted my retirement because every time I turn around, there's issues with the payment,” Johnson said.

The providers feel like their voices are being ignored. They’ve tried contacting MSDE and the Governor’s office, to no avail.

Here’s what Martina asked one MSDE official recently: "How come when decisions like this are being made, how come the provider that owns the business or the parents, why aren't we notified? Why aren't we in the conversation? You know what he told me? Oh no, we can't do that because if we have y'all here we know y'all ain't gonna go for it.”

We reached out to MSDE too. A spokesperson tells us:

"Based on current data, the Child Care Scholarship (CCS) program exhibits no systemic issues concerning timely payment processing for providers. Child care provider vendors have received a payment schedule [chrome-extension] outlining when payments will be processed for disbursement.

With the statewide implementation of Advance Payment, provider payment processing has become more timely. Advance payment is mandated by the U.S. Department of Health and Human Services, Administration for Children and Families, as an equitable payment practice for the early care and education field. Previously, Maryland child care providers had to submit a properly completed invoice before payment was initiated. Now, provider payments are based on enrollment at the time the advance payment is calculated.

However, MSDE recognizes the need to reduce the True-Up reconciliation [earlychildhood.marylandpublicschools.org] period from 90 days to 30 days for providers receiving payments from the Child Care Scholarship program. This reduced turnaround time requires technological changes in backend systems, and MSDE is currently working on those changes.

Although child care providers have advocated for a shorter True-Up reconciliation process, some have acknowledged the economic benefits of advance payments over the previous payment method."