House committee demands answers as Missouri childcare centers struggle to stay open amid state reimbursement backlog

JEFFERSON CITY, Mo. (KMIZ)

Cheryl Howard, the executive director of the Nora Stewart Early Learning Center, is one of thousands of childcare providers across the state relying on state reimbursements to keep their daycare alive.

However, due to a backlog in the state, Howard says the NSELC, which has been operating in Columbia for 91 years is in jeopardy. 

“In the last two to three years our enrollment has dropped half. We have not received the grants we applied for so that is hurting us real bad,” Howard said. 

Howard was one of dozens of daycare providers to testify in front of the Missouri House Elementary and Secondary Education Committee on Tuesday after technological issues delayed state reimbursement payments for months, putting daycare centers at risk or out of business entirely across the state. The Department of Secondary Education was grilled by committee members after more than 3,000 childcare providers were left waiting for subsidy payments from the department. 

Three members of the Harris family, who have worked in childcare for more than 40 years, said they had to sell their car, shut off their utilities at home and dig deep into their Social Security to keep their daycare center alive. Even with all of that, they say they are $60,000 in debt. They were not alone. 

Latonya Williams, the executive director of the Bartlett Center, which specializes in children with trauma, told the committee that if her business closes most of the children they provide service for will have nowhere to go. 

“I have over 100 kids in my program and I’m about 98 percent childcare subsidy. Up until a week ago, I had not received any payments,” Williams said during the hearing. “I had eleven thousand dollars in the bank. I have been using my own money to buy cleaning supplies for our program.” 

The state has pointed the finger at a new data system launched last December, which has led to a backlog of payments. Many daycares rely on those payments to fund staff and stay in business. The new data system has also caused issues with attendance, with many who testified at the hearing saying they were unable to get any support when they called and asked for help. 

“There won't be a modicum of satisfaction until these providers are paid and paid with some manner of interest. I'm listening to people take out hundreds of thousands of dollars in loans that they're going to have to pay interest on people who you're talking about how their lights are off just so they can continue to provide services for this state's children in alignment with this current gubernatorial administration,” Rep. Raychel Proudie (D-Ferguson) told ABC 17 News after the hearing. “What they were saying is that they were going to provide for these people. Somebody has to make good on what we said that we were going to do for these people. And frankly, we just simply weren't doing that.” 

Minority Floor leader Crystal Quade (D-Springfield), who took part in the hearing, says that she would like to see the state issue payments now.

“What we've been told over the past few weeks is that this is an IT problem. And it goes down to the fact that they have to recertify not only these parents with these providers in check attendance and all of these things. That is all fine and well, I understand that there is a system that has to be done to verify that the kiddos know where they are and that the payments need to be made,” Quade said. “That said, we have so many providers who are already contract providers with the state of Missouri. We have parents who are already certified to be receiving these subsidies and we could right now issue checks in this moment to those providers to cover these costs for the folks that we know are already qualified.” 

Once the new data system was launched in December, the state began to encounter backlogs in payments. The problem snowballed into issues for families trying to apply for subsidy assistance and provider contracts.

Part of the issue is attendance. Under the system, parents are forced to take attendance for their own children, which has been a nightmare for daycares and affected payments. The system only operates for Android users and is outdated. DESE says that the attendance system was put into place in 2018 before the new data system was launched. The vendor contracted to operate the new system and subsidy program is World Wide Technology, which operates out of St. Louis.  

Quade said its a multi-layered issue that starts at the top. 

“I think that we need to be having conversations about should the Department of Elementary and Secondary Education, be the ones overseeing our early childhood subsidy program. The point that was made today, we have a lot of these families who qualify for multiple services,” Quade said. ”It goes back to the fact that we don't have direct care caseworkers, that our call centers are outsourced and that we have had folks in charge in our state continue to lay off state employees and outsource this stuff to private entities, to their buddies or whoever, instead of actual employees of the state who are doing the job well.“

DESE said during the hearing that it will begin issuing stipends “sometime this week” but for many it’s too little too late. 

“It is already too late. There are, especially in the Saint Louis area where I can speak to because that's where I live, they've already closed. There are people who already have creditors closing,” Proudie said. “The apologies that these folks were offered here today can't pay their electric bill. Their gas bill  is not going to pay their rent if they're renting a space.”

On Wednesday, there will be a budget committee hearing to address concerns about how much these issues cost and what potential solutions could look like. Quade advises parents impacted to contact her office or their local elected official to share their story.

Proudie still has questions.

“I want to know what happened with the differential for people who are opening up their hearts, opening up their centers to take children who are, you know, suffering through poverty there that are lower-income kids, and that's the majority of their center. They were assured and promised that they would get a 30 percent differential. And if they spent the money on becoming accredited, would get an additional 20 percent all of a sudden, out of the blue, there was a decision made not by the legislature, but by someone in staff to stop doing that, which will certainly hurt centers," Proudie said. "They weren't prepared for it. No one told them it was coming. I want to know who made the decision and I want to know why. I also want to know what they intend to do with their money. They're not going to pay it to providers like they told them that they were going to.”