‘It’s immaterial’: Washington Families Dept. head unmoved state couldn’t audit $271M

(The Center Square) – Washington State Department of Children, Youth & Families Secretary Ross Hunter on Thursday morning addressed a report from the state Auditor’s Office that found DCYF could not provide sufficient records on $271 million in childcare payments made to low-income families.

“In 2021, the Department of Children, Youth, and Families made significant changes to its accounting practices, which made it impossible for us to trace the federal money spent to a level of detail necessary to determine whether the agency spent program funds appropriately,” the state auditor’s blog stated in August regarding the 1,083-page audit covering state agency compliance with federal rules.

The auditor’s office continued, “Our most significant finding – one we’ve issued annually since 2005 – questions more than $271 million because the agency did not ensure payments to child care providers were allowable and properly supported.”

Speaking from Las Vegas right before he was to go to the airport to catch a flight home, Hunter told the DCYF Oversight Board during its virtual meeting that financially tracking individual children was not a priority for the department.

A response to the audit was listed on the agenda during a September meeting of the oversight board, but no mention of the audit was made at the meeting.

“When we set this system up, we chose not to do that level of financial accounting detail because we believe that it’s immaterial,” Hunter said. “All of these children are eligible and so for complying with the federal audit rules, it does not matter whether it’s Billy or Sue in a particular box. To do so would cost us a lot of money.”

It wouldn’t be cheap, he pointed out.

“And the cost is about $2 million a year,” Hunter said. “I would prefer to spend that $2 million a year on childcare and not on accounting.”

He explained what improving the department’s financial tracking system would entail.

“We’ll have to hire a bunch of people,” Hunter said. “We’ll have to spend some money on technology, because now I’ve got to go in and really track every single kid getting the service and be able to decompose it into that. We don’t think this is worth doing.”

He said he doesn’t think such detailed financial tracking is required by either the U.S. or Washington state governments.

Federal officials have not raised concerns with him about this issue, Hunter said.

“We don’t think we will have a significant challenge from the federal government,” he noted, adding he is not worried about the feds wanting the $271 million back.

Hunter doesn’t think a more detailed financial tracking system is required by the state either.

“And we believe that asking for this level of detail is discretionary for the auditor,” he said.

Hunter went on to reiterate his position that directing resources to upgrading DCYF’s financial tracking system would take away from the department’s primary focus.

“I don’t think I get value if I spend $2 million a year doing this instead of $2 million a year providing more child care to children,” he said.

Ultimately, it will be up to the state Legislature to decide.

The upcoming 105-day legislative session starts on Jan. 9, 2023 and concludes on April 24, 2023.

“If we with you collectively decide that you want us to do this level of accounting, we’ll be smart about how to do it,” Hunter said.