Technology for Human Services

The American Thinker article of Feb 2, 2012, by Charles N.W. Keckler and Ryan L. Cole presents an interesting treatise of Head Start, the federal program designed some 50 years ago to mainly supply part-time care and education to three- to four-year-old children of impoverished parents.

The article calls Head Start and experiment, conceived by “liberals” and suggests that these liberals finally understand that Head Start is a failure.

In the 1980ies, it appeared clear that the High Scope approach, featuring the “Cognitively Orientated Curriculum,” was the path that Head Start should have taken. Experts state that this should have been mandated as a “Best Practice” approach.

More than 25 years have passed, and it looks like the leaders in Head Start have squandered them on ventures like the National Reporting System, and others. This created a massive bureaucracy around the Head Start program.

Head Start should have known that they needed to get the education component in order for a long time now.

Articles like this get written because research speaks to the failed leadership coming from the Head Start National Office.

Head Start, to date, has cost $170 billion over the years. This is contrasted in the referenced article to the $145 billion of the entire Apollo Moon Program by NASA. We know the Apollo program was expensive and this puts it into good perspective.

Our company serves the subsidized childcare space with systems for administration, time and attendance and fiscal control for children in childcare. For more than a dozen years now we have tried to adapt our systems, specifically designed for administration of government programs to take care of children, to meet the needs of the Head Start programs. Every attempt has eventually resulted in our throwing up our hands and giving up. There are a number of companies around this space in the nation, and none of “us” serve Head Start very well. There are different systems and software vendors, very similar to us, that serve childcare programs in Head Start exclusively, and there is little overlap between the two flavors.

We all know each other, in some cases we serve the same clients, yet we can’t make one system to serve both requirements. This shows how drastically different the Head Start reporting and eligibility requirements are and how bureaucratic the process has become. It just seems to be easier to have one system for general childcare and another for Head Start, even to the degree where some agencies serving both programs have to accept duplicate data entry.

If this were a small program, I’d be less concerned, but after spending $170 billion, I sure would like to know what the money has done for us – and I don’t.

The childcare time and attendance system recently implemented in Ohio gets lots of news coverage. Here is an aricle in the Dayton Daily News. There are some comments included about the benefits of biometric authentication versus swipe cards:

Ohio JFS directors prefer a system that would read a child and parent’s fingerprint or palm print to prove a child is actually there, said Joel Potts with the Ohio Department of Job and Family Services Directors’ Association.

But the state nixed that idea because of cost concerns. There would also likely be concerns from parents over fingerprinting their children, Johnson said.

“The swipe card provides the same benefit at a much lower cost to taxpayers,” Johnson said.

I do not agree with Mr. Johnson that swipe cards provide the same benefit to taxpayers. A swipe card, if it is kept by the provider and not with the child, does not help prevent fraud in any way and produces no better results than the old paper attendance sheets.

Using the old process,  parents were supposed to sign their children in and out daily on attendance sheets, listing the exact time, and leaving a signature. If this was not done every day, there was nothing in place to prevent a parent from signing attendance sheets for an entire month at the end of the month all at once. This means that even if a child was not present, the parent could still indicate otherwise by putting an entry on the attendance sheet, even weeks later. We have found that some auditors actually look at pen and ink consistency for clues as to whether parents filled out attendance sheets in batch, presumably in cahouts with the provider.

The problem with swipe cards, however, goes beyond just leaving them with the provider. Children often are not dropped off and picked up by the same person. Mom may drop off children in the morning, and dad pick them up in the evening. Sometimes babysitters routinely pick up children.  Many parents carpool, which requires that they not only pick up each other’s children, but also the swipe cards. The handing of the swipe cards between various authorized adults causes them to get lost or forgotten. The “fix” for this is for the parent to perform “backswiping” the next day. Typically, the parent then selects a previous date and time that was skipped.

As soon as backswiping is allowed, the system no longer is really a time and attendance system, but just an electronic record keeper.

Biometric authentication of children or parents at least proves that the child or parent was present at a given location at a given time. If backdating is prevented, and if the system has provisions to deal with forgotten entries, a real record of who was present where and when is established.

While biometric scanning is more expensive than swipe cards, it is far lest costly than the fraud that occurs when providers can “make up” ficticious children and claim reimbursement for their care (that never happened).

The concern by parents that their children are “fingerprinted” is valid – but it becomes less and less severe. Fingerscanning is now routinely used in theme parks to get access to rides, health clubs use scanning for their patrons to check in and out, and school cafeterias use scanning as a way for children to pay for school lunches. As a matter of fact, in the case of payment for school lunches, the scanning actually serves as an equalizer, since children that receive free and reduced meals are no longer stigmatized by using a different method of payment than the children buying full-cost lunches.

In today’s world, biometrics are becoming pervasive and are no longer assoicated with criminality as is was in decades past.

Biometric scanning for childcare subsidy programs is far more effective at curbing fraud than swipe cards are.

Kansas and Utah handle subsidized childcare differently than all other states.

Most states in the U.S. support families in need with childcare subsidy funds by determining the eligibility of the family based on family size, income and special needs, help parents find childcare providers, set up childcare schedules and pay for the services by making payments to childcare providers. Parents do their share by paying a family fee, sometimes called a co-payment, to the childcare provider.

This process works well, but it has some shortfalls. By nature of the provider getting paid by the state or county, there is an implied business relationship between the government and the provider. In actuality, this is not the case. The families and children are the real clients of the government. The provider is simply a contractor or vendor that invoices the government for services being rendered. By having parents disconnected from this relationship between the government and the provider, parents can take on an attitude of entitlement and disconnection. Most of  the responsibility of getting paid falls on providers who have to complete timesheets or submit attendance information online and then wait for state staff to process the payment either by cutting hard checks or making electronic payments to the provider.

The goal of the welfare-to-work programs, which are the umbrellas of the childcare programs, is to get parents back to work, and while parents work, their children are taken care of by high quality childcare providers. The parent participation in form of the parent fee is meant to engage the parent and establish some accountability.  If parents do not pay this fee, or if providers “discount” the fee, just to get the subsidy business, the parent is generally out of compliance of the program rules. However, it happens routinely and often goes unnoticed.

The result is a disengaged parent.

The states of Utah and Kansas are addressing this problem by an entirely different approach to reimbursement for childcare. They believe that by requiring more personal responsibility and accountability of the parent they are benefitting the families for the long term. Parents receive their childcare benefits in the form of cash deposits into their Electronic Benefits Transfer (EBT) accounts. Parents have EBT cards, which are magnetic stripe cards which allow the parents to pay approved childcare providers directly by making electronic transfers.

There are benefits to all parties. The state improves the timing of payments to childcare providers and eliminates the administrative cost of paper checks. Funds for childcare are allocated according to need and provider tier, and are separated from other cash benefits. The parent is empowered and has to take an active role in paying the provider for childcare. This means that the parent is aware of the cost and the process of the childcare services, and has a better understanding of its value. In essence, the parent pays for a childcare slot at a provider just like private pay parents do. The provider receives payment quicker through nightly transactions.

Of course, there are also problems with this approach. The system does not track time of children spent at a provider. There is no timesheet filled out by the parent or the provider. In essence, the system is open-loop, where the government pays for services as they are projected and authorized, not as they really occur. In today’s environment, many states are finding that a large portion of childcare subsidy fraud occurs when providers and parents are colluding, and providers are paid for care that never takes place, for children that may not even exist. Some states are going through a process of collecting positive attendance record using swipe cards or biometric scanning to verify not only the attendance but the actual existence of a child. In a system where the parent pays the provider from a benefits account directly, fraud can be created simply by establishing an account and a relationship of care between a provider and a child. It is not difficult to create fictitious providers and children in a computer database, and without positive confirmation that either or both actually exist, fraud could be perpetrated for a long time without being noticed.

I think that the accountability and empowerment of the parent is critical for the parent and the child. In an ideal world, the system used in Utah and Kansas would be an excellent solution to a complex problem. But our world is not ideal. There are always people that are looking for ways to break the system and skim the cream off the top. The model where the parent pays the provider from an electronic account directly makes fraud easier to commit than any other method I can think of, easier even than the paper attendance sheets still so prevalent in childcare subsidy programs throughout the U.S.

A recent study by Arizona State University’s Chris Herbst along with Erdal Tekin of Georgia State University, published in the Journal of Urban Economics, examines the link between childcare subsidies and childhood obesity. The study focuses on analyzing the impact of subsidized childcare on disadvantaged children’s weight outcomes.

The authors claim they found the odds for a child being overweight or obese are 40% higher for children in childcare programs that are subsidized versus those in non-subsidy programs.

Herbst and Tekin speculate that the higher rates of overweight and obesity are driven by the program’s employment mandate and the low-quality childcare that the subsidy purchases.

I do not understand the conclusion that the program’s employment mandate would have an effect of the child being overweight. Children are in childcare for reasons they do not understand or control. In most cases it’s because their parents work and can’t stay at home to watch them, and there are no relatives available to take care of them. Whether that parent is mandated to work to get welfare benefits, including childcare, or if that parent is a doctor or lawyer and leaves the child at childcare to be able to go to work, the respective children are in the same situation. Their parents are working, mandated or voluntarily.

What concerns me more, however, is the statement by the authors that subsidy purchases low-quality childcare. This may or may not be correct, but is is alarming, since the state agencies that provide childcare subsidies are assigned the mission to enable the same quality services that the market provides. Parental choice is a key factor in all state subsidy programs, and parents choose their childcare locations and as a result they make a choice about the quality of the program.

If the conclusions of the study are correct, one of two things must be going on: Either the parents receiving subsidy choose inferior programs or centers for their children, due to lack of information or insight, or states are not allowing parents to choose and are therefore out of compliance.

I can affirm with certainty that in general those state government officials in charge of the subsidy programs are dedicated to the mission of providing the highest quality care to children, while enabling parental choice regarding the programs, locations and general capabilities of  the childcare providers.