LePage administration paid $315K for a consultant to rethink child care, then did nothing

By Matthew Stone

Maine’s Department of Health and Human Services has paid $315,000 over the past few years to an outside consulting firm to help the state overhaul and simplify the way it handles state-funded child care assistance for lower-income, working parents.

But the state agency isn’t acting on the consultant’s advice on simplifying how the assistance works for parents, child care providers and the multiple state offices that coordinate it all.

Maine isn’t making the consultant’s recommended changes despite telling federal regulators it planned to carry them out and despite re-upping with the consultant — Boston-based Public Consulting Group — after it made preliminary recommendations.

In a series of reports it produced for Maine DHHS in 2015 and 2016, Public Consulting Group identified a number of changes the state could make, both big and small, to eliminate major differences among a handful of state programs that provide child care subsidies to low-income, working parents. Those differences can determine how easy it is for parents to qualify for help, how much and how often child care providers are paid, and how easy it is for child care businesses to collect payment.

Public Consulting Group detailed multiple policies for the state to amend, assembled research findings on practices used by other states that Maine could consider emulating, and created a detailed implementation plan for crafting what the Maine Department of Health and Human Services began calling its “New Child Care System.”

In an email to the BDN last month, DHHS spokeswoman Samantha Edwards confirmed that the state agency hasn’t taken the steps to implement Public Consulting Group’s recommendations.

“It is not evident if this would be cost effective,” she wrote.

As it’s currently set up, state-funded child care assistance in Maine can be dispensed by two different state offices depending on how the parent initially connects with state help.

Short of streamlining their operations, Edwards wrote in her email to the BDN that the two offices within DHHS that administer child care assistance, even with many staff vacancies, “have stepped up processes and procedures in recognizing and acting on child care requests.”

‘A more uniform approach’

Child care is easily a top household expense for middle-class, working parents. For lower-income parents, the expense can easily bust the family budget.

That’s why there’s help available through the state, but Maine’s primary source of child care assistance is set up in a way that makes it complicated for parents to apply. Plus, when they enroll subsidy-funded children, child care providers are often taking on children at well below their standard rates.

A recent BDN Maine Focus story detailed the cumbersome application process for assistance from the state’s Child Care Subsidy Program, which involves filing applications with two different DHHS offices: the Office of Family Independence and the Office of Child and Family Services.

The story also detailed the subsidy program’s contraction over the past decade. In 2015, half as many children were attending child care with the help of a voucher as in 2007. And the number of child care providers accepting state-funded vouchers declined by 60 percent in that period.

But that’s just one state program that provides help paying for child care.

Parents with very low incomes who qualify for cash assistance under the state’s Temporary Assistance for Needy Families, or TANF, program can qualify for child care assistance as part of their benefits package.

When they later leave the TANF rolls, former TANF recipients can qualify for a third category of child care assistance called transitional child care, also funded through state TANF spending.

Depending on the category of child care assistance, different state rules apply, which can influence how smoothly the application goes for parents, when and how child care providers receive payment, and the amount they’re paid.

In its January 2015 report for Maine DHHS, Public Consulting Group wrote, “the current system prevents state staff managing the programs from taking a holistic approach to improving the quality and accessibility of care.”

The consultant identified the following differences depending on the source of child care assistance:

Applying for help and choosing child care. Selecting child care through the Child Care Subsidy Program involves five steps, two different applications and two different Maine DHHS offices that ask parents for much of the same information.

For child care through TANF and transitional child care, the process involves three steps, and the application remains entirely within the Office of Family Independence.

Payment rates. Child care providers who enroll children through the Child Care Subsidy Program and through TANF receive one rate. But they receive a higher rate if the child comes to them through transitional child care.

For a child care center in the Portland area, that can mean the difference between receiving $244 weekly to care for an infant full-time (through the Child Care Subsidy program and TANF) or $274 (through transitional child care).

Rewards for high quality. Under the Child Care Subsidy Program, a child care provider can collect a premium on top of the normal state subsidy for taking steps to improve in quality, such as hiring staff with college degrees and earning national accreditation. Under TANF-funded child care, the state pays no difference based on child care quality.

Payment timing and source. Under the Child Care Subsidy Program, child care providers bill Maine DHHS biweekly after they’ve provided services, and they must send in child attendance records. They receive payment from the state, and only for the time the child is in care.

Under TANF-funded child care, providers typically receive payment weekly in advance of providing care, and they receive a flat rate for children with subsidies irrespective of their attendance — similar to the way child care payment works for parents paying with their own money. Normally, child care providers collect their payment directly from parents with TANF-funded subsidies, after the state transfers the money to the parents’ benefit cards.

Public Consulting Group, in its January 2015 report, recommended that Maine DHHS pursue a “more uniform approach” to managing all three sources of child care assistance.

There’s some level of division in most states when it comes to handling child care funded through the federal Child Care and Development Fund, as Maine’s Child Care Subsidy Program is, and TANF. But the number of differences between Maine’s child care programs is unusual, said Christine Johnson-Staub, a senior policy analyst for child care and early education at the Center for Law and Social Policy in Washington, D.C., which has worked with a number of states to rework how they provide child care assistance.

Adopting a more uniform approach between programs isn’t an automatic route to a child care program that is available to more kids and promotes high quality among child care providers, she said.

“We face this in a lot of states when we talk about aligning programs or streamlining programs,” she said. “Overall, that can make access worse, if they’re streamlining to worse policies or lower rates.”

Generally, Johnson-Staub said, Maine’s policies for paying child care centers through TANF better match practices in the private market, which has been a focus of child care reform at the federal level.

In developing a more uniform approach, said Johnson-Staub, “I wouldn’t want to jeopardize that.”

Efficiency, accountability, access

In October 2014, Maine DHHS signed an agreement with Public Consulting Group, worth $124,610, and made two requests of the consultant:

— Analyze how Maine spends three different federal grants it receives each year that pay for different social services and types of assistance for low-income residents, including child care.

— Drawing on that analysis, help DHHS figure out how to streamline child care sign-ups and payments in order to better serve families and create efficiencies for the state.

DHHS paid the $124,610 bill with money from TANF, according to a copy of the contract the BDN obtained through a public records request.

TANF is a $78.1 million grant the state receives every year to pay for welfare cash assistance for low-income families with kids, along with job training and other services people need so they can work — such as child care and transportation.

Later in the fall of 2014, as Maine DHHS assembled a new state plan for spending its annual allotment from the federal Child Care and Development Fund — which amounts to $16 million to $17 million each year — it informed child care providers and others during public presentations of its plans to rework child care assistance and design a “new child care system” with Public Consulting Group’s help.

Later, when Maine DHHS submitted its state plan to the federal government, it indicated its intentions to move all aspects of applying for and paying out child care subsidies to a single office within DHHS, the Office of Family Independence, which handles programs such as TANF and food stamps.

All signs pointed to the department following through and reworking how it provided child care assistance.

In July 2015, six months after Public Consulting Group released its first report on child care, Maine DHHS signed a new contract with the consulting firm to advance the work.

It paid the company $190,595 to help the agency “pursue a path towards a transformational redesign of three (3) federally supported child care programs…within the Department,” the contract read. “A key value that underlines the recommendations is that families seeking a child care subsidy experience a consistent process and that policies are applied equitably.”

Under its new contract — paid for half by TANF and half by the federal Child Care and Development Fund, most of which is used to pay for child care vouchers — Public Consulting Group met with department staff, researched practices in other states and designed the implementation plan for moving the department to a streamlined child care system.

Under the multi-step plan Public Consulting Group developed — which the firm released to DHHS in March 2016 and which the BDN recently obtained — DHHS was to spend most of 2017 closely analyzing its child care policies, planning the needed technological changes, and developing the plan to train and relocate staff. The guiding principles for the new child care system were to be: timeliness and efficiency, accountability and transparency, and access.

The plan, to improve coordination among different benefits regardless of funding source, had much in common with changes a number of other states have made to simplify their benefit programs.

2016 review by the Urban Institute of benefit program changes made in six states found that practices such as eliminating duplicative applications, sharing recipient information across programs, and changing technology so the programs shared computer systems often helped states process applications more quickly and more accurately — and even save money on administration. For those in need of help such as child care assistance, the result was that the states could start providing benefits sooner.

The changes “demonstrate that large-scale change is possible in these critical work support systems,” the Urban Institute researchers wrote.

In Maine, such an overhaul for the state’s child care programs wouldn’t be a simple undertaking — and likely not a cheap one. It also would involve centralizing child care assistance in the DHHS office that dispenses welfare benefits — unlike the setup Maine had for child care subsidies until 2008.

Requiring people to go to a DHHS office to sign up for benefits can deter them from signing up at all. “In many places, that still has a stigma attached to it,” said Johnson-Staub, the child care policy analyst.

Still, Public Consulting Group’s plan “looks perfectly fine and could yield productive things,” said Judy Reidt-Parker, an early childhood education policy consultant based in Portland who has worked with policymakers across the country and in the federal government on child care policy.

“It would take a long time and a lot of staff resource, so I can understand why they’re not certain if it would be cost-effective,” she said. “People would have to care enough about the child care system.”

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