Missouri education officials face second day of tough questions over child care subsidy

State Rep. Raychel Proudie, a Democrat from Ferguson, questions officials from the state education department about emails that show early knowledge of widespread problems with the child care subsidy program (Annelise Hanshaw/Missouri Independent).

The Missouri House Budget Committee grilled state education officials  for over two hours Wednesday morning over the backlog of payments in the child care subsidy program.

House Budget Chair Cody Smith, a Republican from Carthage, pressed subsidy administrators about how the backlog may affect the state budget.

Officials were not able during the meeting to say how much money they owed providers for subsidized child care for the previous fiscal year, which ended June 30. The department had $84.3 million left in appropriations for fiscal year 2024 it can no longer spend.

This money must come out of appropriations for the current fiscal year, which may lead to a supplemental request, Smith noted with concern. Kari Monsees, commissioner of financial and administrative services for the Department of Elementary and Secondary Education, said any additional appropriations could be pulled from remaining federal funding for the program that the legislature has not yet authorized the department to use.

And now, with discretionary funds expiring at the end of the month, DESE is writing checks to child-care providers as a one-time grant to use up the funds and try to keep struggling preschools open. The grants will vary from $5,000 to $55,000 based on the size of the facility.

“We wanted the stipend to be substantial. We thought it needed to be substantial, given the nature of the situation we are in,” Monsees told the committee.

It was the second day in a row that department leaders faced tough questions from lawmakers. On Tuesday, a parade of child-care providers testified to the House Education Committee about the massive backlog and how it is impacting their ability to keep their doors open.

DESE took over the administration of the child care subsidy program from the Department of Social Services in December and hired a new service provider to cover the technology.

Since then, providers have been missing payments for many months, and families are waiting for long periods to get into the system. Some day care centers have closed their doors, and many have taken out loans to survive.

“I have people who are at the brink of going out of business. I have individuals who told families, ‘Unless you can come up with the full amount even though you’ve been approved for the subsidy, you cannot have your child here at our center,’” State Rep. Darin Chappell, a Rogersville Republican, said. “These people are trying to be cared for.

“They are working poor, working middle class. We are not talking about people with our greatest amount of money. They wouldn’t have qualified if they were. These are the people in our communities that are the most at risk,” he continued

He wished the department would have paid, at the minimum, part of their obligation to providers by the end of June. Then, they wouldn’t have as much owed now.

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Rep. Raychel Proudie, a Democrat from Ferguson, held printed copies of emails between DESE officials and contractors. Concerns about the system were known months before addressing it publicly.

“The assistant commissioner let them know that there was an issue over and over and over and over again before we ran out of the trial period,” Proudie said. “It was well known that this was a disaster, that she felt that the contractors weren’t taking it seriously.”

Pam Thomas, assistant commissioner for Missouri’s Office of Childhood, said she knew it was a “system wide” problem by the end of January.

“There were some hot fixes put in place immediately,” she said. “At that point in time, there were over 2,000 provider accounts and over 22,000 children. We had duplicates in the system because of missing data, and the volume by the end of January was very large.”

The department has a goal to fix the backlog by the end of October, but lawmakers expressed skepticism.

Rep. Kathy Steinhoff, a Democrat from Columbia, asked for weekly updates, preferably on a public platform.

Monsees said the department would “address that.”

This article has been updated at 2:43 p.m. to correct the status of fiscal year 2024 appropriations and officials’ knowledge of the amount owed to borrowers.