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Maryland child care providers sound off on issues with scholarship payment system

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BALTIMORE — Martina Johnson says she goes above and beyond to make her Park Heights day care, Tina's Tots, feel like a second home for the kids. She goes all out decorating for Halloween, and throws a big party every year for families past and present.

"I love doing this because I love what I do. I just want to be treated fairly and I want to be a part of the conversation because this is my business after all,” Johnson told WMAR-2 News.

That's why she and several other Maryland child care providers - from Baltimore to Prince George's County - gathered at Johnson's home, armed with signs and a message for the Maryland State Department of Education (MSDE) and Governor Moore.

"We feel abandoned by you," Johnson said, speaking to the camera.

In 2023, the federal government required MSDE to change the system of how it pays child care providers for students who are on scholarships. The federal government is requiring all states to switch to advance payments; Maryland is just the first to do so.

For many of these providers, most if not all of the children in their care are on scholarships. So these state payments are the only way their daycare makes money.

"It's a surprise! You don't know if it's right, you don't know if it's gonna be more, or if it's gonna be less,” Madie Green, a provider in Prince George’s County, said.

Under the new system, MSDE issues "advance payments" based on the number of children enrolled at the beginning of each month. If anything changes, like a new child enrolls, or a child leaves, the state will reconcile the payments. But not until three months later.

Johnson brought the issue to our attentionback in July.

"We can't survive off three months of back payments. Our bills are now,” Johnson stated at the time.

MSDE acknowledges the need to shorten that window, and Early Childhood Executive Director Tara Phillips says they're working to make technical changes to the system so that reconciliation payments are received within 30 days rather than 90 days.

"We are looking forward to that happening very soon, very soon,” Phillips told WMAR-2 News in a recent interview.

Still, providers are scheduled to receive their regular payments at the middle and end of the month. We met with them on October 15, one of their scheduled payment dates. When we asked whether any of them had been paid that day, we were met with a resounding chorus of “Nos.” They were paid by the end of last week. Phillips told us a payment delay might happen if a provider gets their checks mailed rather than through direct deposit. All of the providers we talked to at Johnson’s home say they use direct deposit.

Another big source of frustration for the providers comes from a new verification process, also required by the federal government, which funds about 90% of the state's scholarship program.

To prevent against fraud and abuse, which MSDE officials say there have been cases of in the past, both providers and parents now have to verify a child’s daily attendance.

If the parent disputes what the provider reported, that prompts an audit, and the provider has to submit their sign in and sign out sheets for that time period to MSDE.

If they don't match up, you have to give the money for that date or service period back.

"The money will run out if we aren't sure that it's going to the appropriate places,” Phillips told WMAR-2 News.

But some providers say sometimes the discrepancies are due to a parent's mistake.

"If the parents do not verify, then that also triggers an overpayment for us for a job that we already completed,” Ruby Daniels, president of the Maryland State Family Child Care Association, and fellow provider in Howard County, explained. "One provider, she got an overpayment for $3,900 and then she has proof that the parents verify and she has proof that the child was there the whole time. But since it’s an overpayment already, it’s a done deal, it goes through. Apparently, after all the appeal and stuff, it was reversed, and she got her money back. But the hardship initially that it caused, I don’t know that you can get that back. The sleepless nights, and the worrying that now I owe this $3,900. That’s a lot of money for us."

They feel like they're getting punished for something they can't always control.

Johnson has been waiting almost a whole year for an issue with one of her clients to be resolved.

She was told she owed the state for three pay periods between November and December 2023 because she marked a child as present, but the parent didn't.

"She was having trouble managing the portal. It was new, it was new to all of us,” Johnson said.

After months of waiting, she finally had a hearing this august. She's still waiting to learn the decision on whether or not she owes the state thousands of dollars.

"You can't take back money someone labored for,” provider Green said.

Director Phillips says if a parent makes a mistake, but the provider can prove the child's attendance, the issue should be resolved. But if a provider makes a mistake, nothing can be done; they'll have to pay for it.

"If the provider makes a mistake, and it says that a child was in place and they don't have evidence that the child was in place, our system at this point cannot make that correction, and the provider is not able to make that correction,” Phillips explained.

"If I put your child instead of his child absent, I can’t go back and correct it once I hit submit. But if I go in the portal to say, hey I made a mistake, they look at it as fraud on my part," Green said. "Sometimes we get busy, we forget. Sometimes we can't even get in the portal to do what we need to do."

"We’re working to improve the program. We know it’s not perfect," Phillips said. "We are actually in discussion right now with providers who have reached out and asked for assistance with understanding the program better. [...] "We just want to make sure that they understand we are all in this together. And as a former child care provider, I really understand how important it is to receive your payments. I understand how important it is to make sure that your business runs, that those things are in place as expected, and we’re working hard to make sure that happens."

Johnson confirmed she and other providers are working to set up a meeting with Phillips.