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OWINGS MILLS, Md. — They got into this field because they wanted to educate and care for kids. They signed up to participate in the state’s Child Care Scholarship program so they could reach families who might not otherwise be able to afford their services. And yet – many child care providers throughout Maryland say, they’re spending much of their time navigating a bureaucracy riddled with technical obstacles.
“I do handle all the scholarships for the program right now, and it’s a full time job in itself to do that,” Ashley Trego, founder and owner of Little Scholars Child Development Center in Glen Burnie, said.
The scholarship program is run by the Maryland Department of Education (MSDE). This week, an unknown number of providers were notified via email by the department that they’d failed what’s called an “integrity audit” because they didn’t submit the required invoices from certain pay periods in 2023.
The email instructs the providers to supply MSDE with the missing invoices by May 2 “so that your program can avoid repaying funds received for the service period.” Problem is – many of those providers say they did in fact submit those invoices two years ago, and they have the receipts to prove it.
“We do have a paper trail. We do everything via email or via fax,” Trego said. “They’re recouping – I guess trying to recoup – funds from us for services that have been rendered.”
“We took care of the kids, we fed the kids, and now we owe them money. I don’t get it,” Ruby Daniels, a child care provider in Howard County, and the president of the Maryland State Family Child Care Association.
For bigger providers, those invoices represent thousands of dollars for each pay period. And some were told they’re missing dozens.
“One of them was asked for 68 invoices. Another program was asked for 63,” Lisa Dickinson, education director at the Goddard School of Owings Mills, and president of the Maryland Child Care Association, said.
They have less than 10 business days to comb through their files. In its notification email, MSDE says providers are required to retain all documents related to scholarship payments for five years in case of an audit.
“The time frame for us to go back and do the records on top of that is a little bit unreasonable,” Trego said. “And on mine at least, and a lot of other people’s, it said, ‘last and final.’ I never received any other email, I went back and checked our records.”
In a statement to WMAR-2 News, MSDE said:
“The Maryland State Department of Education (MSDE) sent a message notifying providers participating in the Child Care Scholarship Program about their audit status. That message indicated that providers must submit untimely or missing invoices by Friday, May 2.
We understand the administrative demands placed on child care providers and will support them in resolving this matter. Child care providers can expect a follow-up notice that will offer clarity on the process and next steps. While the audit may identify discrepancies, no immediate repayment will be pursued solely due to missing invoices.
This outreach is part of a broader effort by the Division of Early Childhood to account for all invoices related to advance payments.
MSDE remains committed to collaborating with our child care partners in providing families with high-quality, dependable and affordable services.”
But even if they succeed in submitting everything properly and on time, providers we talked to have trust issues with a system that’s failed them in the past. In addition to this audit, Lisa Dickinson at the Goddard School of Owings Mills was audited this past fall, informed that the business owed the state $3,000 because of missing invoices. She and her team submitted them right away.
“We then received communication from them saying that those invoices were not accepted, so our next recourse would be to request a hearing,” Dickinson recalled.
The legal fees were going to cost more than what the state was asking for, so they just paid it. Only for MSDE to come back a few months later and say the daycare still had an outstanding balance of $3,000. The issue ended with the business only paying the state $400 the second time.
Ruby Daniels recalled a time she was informed she owed MSDE money: “If you get charged with overpayment, you can do an appeal process, you know, that’s also an added stress for us. So I was given an overpayment and I paid it only because I want the problem to go away.”
Between the administrative burden and threats of owing the state money, some providers are having second thoughts about even offering child care scholarships. And for a lot of places in areas of higher poverty, 100% of their clients are on scholarships.
“There are many people that are saying that they are going to sell their business. I’ve heard some of the smaller providers saying that, because they can’t keep this model – it’s not sustainable for them,” Gordon-Miller said.
“The added stress of – I have the money now, but is this money mine forever?” Daniels told WMAR-2 News. “Because they said they could go up to 5 years [with an audit]. So what if next year now they want to audit me for ’21, you know, for the following year, they want to audit me for ’24. Is it worth that added stress?
This also comes as MSDE is set to temporarily freeze enrollment for the Child Care Scholarship Program on May 1.
“The program is helping more children than ever before—growing from about 21,000 children in January 2023 to over 45,000 in 2025. Because of this big increase, the program has reached its maximum budget capacity,” MSDE said in its announcement.
New families can still apply, but they’ll be placed on a waiting list until the freeze is lifted. But even existing families who are already in the program could be in jeopardy.
“If their provider all of a sudden decides that they no longer want to take them, they’re gonna be scrambling to find a program to accept their scholarship,” Dickinson explains.
Last year, in June and October, we reported on issues providers were having with the new advance payment system. The federal government is requiring all states to switch to advance payments; Maryland was just the first to do so.
Providers who offer scholarships now get paid by MSDE in advance, based on their attendance at the beginning of each month. But if anything changes, like a new child enrolls or a child leaves, the state wouldn’t reconcile those payments until three months later. Hearing their concerns about the lengthy waiting period, MSDE shortened it to one month. Now, providers are asking the state to listen to them again.
Another source of frustration for the providers comes from a new attendance verification process, also required by the federal government, which funds about 90% of the state’s scholarship program.
To prevent against fraud and abuse, which MSDE officials say there have been cases of in the past, both providers and parents now have to verify a child’s daily attendance. If the parent disputes what the provider reported, that prompts an audit, and the provider has to submit their sign in and sign out sheets for that time period to MSDE. If they don’t match up, you have to give the money for that date or service period back.
“So we literally have to chase them before they leave the door and say, verify the attendance or, you know, or you’re you’re gonna lose the voucher or I won’t get paid, right?” Daniels said.
“If the parents fail their portion of it, then we also owe the money back, even though the services have been rendered as well,” Trego said. “It’s a lot of work on both sides to make it feasible for both parties.”
Child care providers frustrated with bureaucracy of state’s scholarship program
