Child Care Administrator’s Improper Payments Information Technology Guide

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B. Profile of System Solutions

This section presents the profiles of system solutions used to address improper payments. Each profile contains:

• A general description of the solution;
• How the solution addresses improper payments;
• An example system name and State using the solution;
• An implementation overview from the example State(s);
• Cost information (when available);
• Challenges; and
• Benefits.

Electronic Benefits Transfer (EBT) systems track and report participant time and attendance at a physical location and facilitate payment to either a vendor or a participant. To track time and attendance, subsidy recipients swipe their cards at a point of sale (POS) device located at the site of service delivery. The system tracks time and attendance data to make payments to vendors and to produce reports useful for identifying improper payments. Oklahoma uses EBT technology to track time and attendance and to make vendor payments in the child care program. Kansas uses EBT technology to enable child care recipients to make payments to vendors, but they do not track time and attendance with their EBT system.

a. How the Solution Addresses Improper Payments

The solution addresses the challenges of preventing and identifying improper payments by:

• Providing an accurate and real-time record of the time and physical location of the child care services;
• Eliminating errors related to manual paperwork, including vouchers, invoices and attendance sheets; and
• Reducing errors related to issuing checks by using automated payments.

b. Example System Name and State

e-Childcare, Oklahoma

c. Implementation Overview

In 2003, Oklahoma developed and implemented e-Childcare, an EBT system for child care attendance tracking and provider payment. The e-Childcare solution addresses deficiencies in time and attendance documentation and timeliness and accuracy of provider payments. Building on the success of its Food Stamp EBT system, Oklahoma used the same EBT vendor for e-Childcare. Child care and Food Stamp recipients can use the same card for both programs.

Child care subsidy recipients use EBT cards that contain a magnetic stripe on the back. Each swipe of the card at a POS device verifies the cardholder’s identity, dates, time-stamps and records a transaction of a child coming into or exiting care. Only recipients use EBT cards to check children in and out of child care provider facilities. Oklahoma has stringent State policies prohibiting vendors from keeping subsidy recipients’ EBT cards or from swiping the cards when the recipient does not receive care on a given day.

The State issued the POS devices to all child care providers, limiting device use only to the child care program. For added security, recipients have a personal identification number (PIN) that they must use to complete a transaction. After swiping the card at the POS device, the device screen prompts the user to enter the assigned, discrete PIN number to record the transaction.

When the client swipes a card, the POS device transmits the data immediately to the EBT vendor system, which creates an electronic invoice based on the actual hours of care. Payment rates vary according to program eligibility and each EBT account associates the card information and PIN number with a recipient’s confidential account holding the necessary program, rate, and demographic information.

All Oklahoma Department of Human Services (OKDHS) staff members can use the system to review attendance to ensure parental compliance with child care plans. In addition to online reporting for staff, Oklahoma developed a web site (https://apps1.okdhs.org/vendorlogin/) accessible for clients and providers to review their account status and transaction history.

e-Childcare increases payment accuracy and eliminates the previous manual voucher process, which was error prone and cumbersome for both providers and the State. The State reduced time between service delivery and payment from several weeks to two weeks, and providers receive payment on a weekly basis.

d. Costs

Appendix 1 summarizes the system implementation and maintenance cost information.

e. Challenges

Although Oklahoma did not report specific challenges for the purposes of this guide, most major systems initiatives face common challenges including:

• Identifying sufficient resources for up-front system investment and for ongoing system maintenance;
• Providing adequate training for system users;
• Testing to ensure that system defects are eliminated before system implementation; and
• Providing help desk support for users.

f. Benefits

Solution benefits include:

• POS device immediately updates the case record.
• Immediate notification of co-pay obligations to child care providers. Each swipe on the POS terminal records the co-pay collected, payment rate and amount paid for the child care service.
• Provider payments are more accurate and timely.
• e-Childcare calculates provider payments based on attendance and eliminates manual vouchers, invoices, and attendance sheets.
• e-Childcare creates real-time, on-line electronic attendance records for monitoring and audit activities.
• Savings achieved by e-Childcare implementation have resulted in child care staff reductions of 14 full-time equivalents (FTEs).
• Since statewide implementation in November 2003, OKDHS reports a savings of more than $10 million.