Auditor General Jack Wagner Says Dept. of Public Welfare Not Spending Stimulus Funds in Timely Manner

More than $60 million mishandled in Child Care and Development Fund

HARRISBURG, Pa., July 8 /PRNewswire-USNewswire/ -- Auditor General Jack Wagner said today that the Department of Public Welfare did not spend federal stimulus money to help low-income families needing child care assistance even though a large number of families were waiting for the services.

Wagner said that the Pennsylvania Child Care and Development Fund was awarded $60,146,767 in federal stimulus money on April 9, 2009, but DPW's Office of Child Development and Early Learning did not start using the funds until April 2010 even though there were 12,891 families on the statewide waiting list for child care services as of June 30, 2009.

"As a result of DPW not utilizing these funds in a timely manner, many eligible families awaiting child care assistance went needlessly without this assistance for an unreasonable amount of time," Wagner said. "This delay is unacceptable because the intent and objective of the stimulus funds was for recipients to utilize the money quickly in order to promote economic recovery."

Wagner's auditors discovered that DPW had not spent the stimulus funds during their work on the Single Audit, which is a statewide audit of the commonwealth's use of federal funds, required each fiscal year by the federal government.

The Child Care and Development Fund provides funding for child care services as well as childhood development services, like pre-kindergarten programs and Head Start. The maximum income eligibility limit for the CCDF is 85 percent of state median income, which was $33,200 per year for a family of three for the two-year plan period of Oct. 1, 2007 to Sept. 30, 2009.

DPW officials indicated they did not plan to spend the stimulus money when it became available in April 2009 because under the federal rules, the funds do not need to be obligated until Sept. 30, 2010 and spent until Sept. 30, 2011. However, Wagner said, just because the money does not have to be spent until next year is not justification for holding onto the funds while many people are waiting for these important services.

Wagner recommended that DPW put procedures in place to more timely utilize federal stimulus funds when they become available in order to reduce the waiting list for child care services.  

The federal stimulus, known officially as the American Recovery and Reinvestment Act, was signed into law in February 2009, with a goal of saving or creating 3.5 million jobs nationally. Gov. Rendell said at the time that he expected 120,000 jobs to be created in Pennsylvania.  

Pennsylvania will receive an estimated $26.8 billion in stimulus money, including $11.1 billion in tax benefits and $13.5 billion for the commonwealth to spend on stimulus-related programs and projects. Of the $13.5 billion the commonwealth will receive, as of June 15, 2010, $8.1 billion has been spent.

"The intent of the stimulus money was to create jobs and to help improve the economy, so the state must ensure the funds are spent promptly and effectively," Wagner said. "The taxpayers deserve and expect no less."

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly.  He is the Commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations.  The Department of the Auditor General conducts more than 5,000 audits per year.  To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's website at www.auditorgen.state.pa.us.

SOURCE Pennsylvania Department of the Auditor General

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