Audit reveals $12.8 million in improper child care billings to Nebraska DHHS

LINCOLN, Neb. — A state audit released Tuesday alleges that the Nebraska Department of Health and Human Services paid millions of dollars in improper billings.

State Auditor Mike Foley investigated the spending records of the department’s child care subsidy program.

Over nine months from late 2023 to early 2024, the program paid out $93 million to child care providers.

The discrepancies and potential fraud add up to $12.8 million of those costs.

SEE ALSO: Nebraska auditor finds up to $1.5 million in ‘flagrant abuses’ in DHHS program

Foley said taxpayers are being billed for services that were never provided.

For example, the audit says child care centers billed for 210 children on Thanksgiving Day in 2023, when they weren’t open.

“When you claim that you cared for a child, and the child is in school on a federal holiday, and the taxpayers is going to have to pay for this, that’s not fair for the taxpayers,” he said.

Foley said the heart of the problem is that day care providers can submit their billing electronically, and the system issues a payment with little to no human oversight.  

“It’s just very easy for the provider to get payment for the services. They know that there’s not a lot of oversight, not a lot of watchdogging, this kind of stuff,” Foley said, “They get away with it a little bit sometimes, and then they say, ‘That was pretty easy; let’s try a bit more.’ And the problem gets larger and larger.” 

Foley is encouraging DHHS to review these payments before they process them.  

DHHS said it agrees with the audit and will make improvements.