MiLEAP’s child care program failed thousands of day care providers

Poor communication from the Michigan Department of Lifelong Education, Advancement, and Potential to child care providers in the Child Development and Care Program could be opening the door to fraud, according to a recent joint legislative hearing on a September audit.

MiLEAP’s call center had only four employees to respond to 124,000 phone calls from child care providers who served low-income families, according to testimony from Leah Decker, auditor at the Michigan Office of the Auditor General, who spoke at the Feb. 3 hearing.

Roughly 60% of those calls went unanswered, Decker said in testimony to the Joint Oversight Committee on State and Local Public Assistance Programs and Child Welfare System.

Decker blamed limited staffing levels. The call center was open to the public for approximately five hours per day each weekday. It was staffed by just two employees at a time.

Michigan Capitol Confidential reported on the audit findings in December.

The department was budgeted $682 million in 2024 for its programs, which serve state residents from birth through post-secondary education. In fiscal year 2025, its budget was $662 million. The department paid 6,264 child care providers in December on behalf of 47,421 children from 28,672 families, it said in a Feb. 3 press release.

Callers who reach the department’s automated system are often told to call back later, the audit found. They have no option to leave a voicemail, and there has been no system to track or return missed calls.

The auditor's office also noted an absence of internal policies to evaluate call center performance or correct deficiencies.

For nearly two years, Decker said, the department knew of the problem but had no documented process to address it. Call center hours were extended from 4:00 p.m. to 4:30 p.m. in July 2024. MiLEAP assumed responsibility for the Child Development and Care program Dec. 1, 2023.

Auditors could not determine whether callers eventually got through on subsequent attempts or gave up, Decker said in response to a question.

One committee member said the communications failure leaves the program open to fraud.

“This program paid out over $700 million while relying on the Department of Health and Human Services to authenticate and approve eligibility through a system that was known to be broken for years,” said Rep. Jason Woolford, R-Howell, a member of the committee.

The department's failure left families without payments and exposed taxpayers to potentially massive fraud, Woolford said, adding that it represents systemic mismanagement, not a technical mistake.

“From the State House to the White House, we will determine how much was lost, who was harmed, and who is accountable,” Woolford said.

One of the most serious findings involved DHS-198 notification letters, critical documents that inform child care providers about a child’s eligibility, possible benefit amounts, and reimbursement details.

MiLEAP is supposed to send out those letters if a household’s eligibility changes. They are essential for providers to understand whether they can continue to provide care and expect payment.

In 24% of the cases the Office of the Auditor General looked at, letters informing providers of the date a child’s benefit would end were missing.

The report warned that missing or delayed notifications could disrupt child care services and delay or interrupt financial reimbursements to providers, Decker told lawmakers.

MiLEAP failed to tell many providers when it was about to review if children in their care were still eligible for benefits, auditors found. Without advance warning, providers and families may suddenly lose coverage, creating instability for children and financial uncertainty for providers who depend on predictable reimbursements.

MiLEAP implemented changes to its I-Billing system in February 2024. This is the system providers use to view a child’s benefits.

The system often displayed multiple active benefits for a single child. Conflicting billing records existed for 53 of 59 providers reviewed, the audit found.

This can cause confusion for the provider over what benefits, if any, a child is eligible to receive and for how long.

If an issue with a child care benefit needs to be appealed, the only recourse is to contact the call center, Brittney Simon, who works at the Office of the Auditor, told lawmakers at the hearing.

Auditors will conduct a follow-up audit to determine if the department has fixed its problems, Decker said.

MiLEAP did not respond to a request for comment.