Child care providers owed thousands in delayed subsidies

ST. LOUIS – Lisa Scheer at Baden Christian Child Care Center says most of the families they serve need help paying for child care. Their tuition is supposed to be paid for through state subsidies.

“We would close for sure if we did not have that. Literally, we have one parent that is currently paying. That’s usually the norm, sometimes none,” Scheer said.

But those subsidies have not been coming in. The problems started when the Department of Elementary and Secondary Education (DESE) switched to a new software at the beginning of the year. That software is not communicating with another program that helps process subsidy claims.

Even if a family is authorized for subsidies, that approval is not making its way through the system properly. So some subsidies have not been paid while others are being processed slowly. Scheer says the state owes her $17,000 but really her losses could be much worse.

That is because some families who do qualify for state subsidies are showing up as unauthorized in the computer system, so Scheer cannot enroll those students at this time.

“My center should be full, and we’re at half capacity because no one can get childcare,” she said. “It’s horrible what’s happening, and the children are the ones that are going to be impacted by this. Think about being 3 and 4 years old and being unhomed.”

As a result of the problems, DESE says it has withheld funding from the vendor of the software.

“The total cost of the project is $13.79 million, paid in installments as project milestones are completed. DESE has paid to date $10.7 million of the contracted amount. DESE has withheld four payments to the vendor since January 2024, as contract milestones are not met.”

A spokesperson for World Wide Technology, one of the vendors, told us, “As a Missouri-based company, WWT places a high priority on fulfilling our responsibility to the citizens of Missouri. WWT remains committed to its partnership with DESE on this modernization effort and will continue to invest all necessary time and resources to move this important project forward and ensure that payments are made to childcare providers in an accurate and timely fashion.”

State Rep. Chantelle Nickson-Clark, D-District 67, said, “This is a huge issue. Some would even call it a crisis.”

She says this problem is way worse than a software error.

“It’s not 30 days. It’s not 60 days. We’re talking about anywhere from 10 months to over a year of non-payment. So what DESE needs to do is make it right,” she added.

The state is giving additional American Rescue Plan funds to these child care centers. The new stipend can be up to $55,000 depending on the provider’s size. But Scheer says it will not be enough, as providers have had to take out loans and deplete their savings and retirement plans.

“It’s too little, too late. Providers need honestly that kind of stipend monthly for a while until they can play catch up,” Scheer said.

DESE says the vendor promised the program would be fully functional by the end of the month.

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