Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, November 26, 1995 TAG: 9511270055
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
DATELINE: LENGTH: Long
On Nov. 2, a group of Roanoke Valley parents - whose child care at an all-day Head Start program had been provided through federal block grant funds - publicly blasted a state change that requires them to pay 10 percent of the cost.
They criticized Gov. George Allen for tinkering with how the subsidy funding was handled and shifting its management from the Virginia Council on Child Day Care and Early Childhood Programs to the state Department of Social Services. In doing so, the funding fell under new guidelines requiring the 10 percent payment.
The parents were angry, and money was not the only reason. They also were angry because shifting their subsidies to the Department of Social Services in effect made them welfare clients.
It is a system and stigma they want to avoid.
The parents are feeling the impact of a movement to streamline state government that targeted the tiny council, one of the smallest agencies in the state - but one with heavy policy-setting power.
The council was established in 1989 to plan, coordinate and evaluate all state day-care and early development programs for children. Its primary function was to administer federal child-care development block grant money, used primarily to provide child-care subsidies to low-income working families. This fiscal year, the council - which has 15 members and a four-person administrative staff - received $17.7 million in block grant funds.
A year ago, a movement was under way to dismantle the council and reduce its role. Allen's strike force on governmental reform recommended last November that the council be eliminated and its functions placed in the Department of Social Services. Doing so was seen as improving efficiency and reducing costs.
Legislation patterned after that recommendation was introduced in the General Assembly this year. The bill passed the House of Delegates but was killed in the Senate Finance Committee. The legislature, however, provided no general fund money for the council - what had been $625,000 to cover much of the council's administrative costs.
Without state funding, the council was forced to cut its administrative staff of 14 to four positions, all federally funded. The council could not manage the block grant funding, particularly money used for Head Start programs, with such a small staff, said Elizabeth Ruppert, the council's executive director.
The council submits a plan to the U.S. Department of Health and Human Services about how it will use block grant funding. Its current two-year plan is good through September 1996. Any changes to that plan must be approved by HHS.
In July, Ruppert, with Allen's blessing, asked HHS for permission to contract the management of block grant funds with the Department of Social Services. Within a week, the request was approved. HHS, in fact, endorsed the state's efforts to streamline systems and ease relationships among programs serving children and families.
But Sen. Stanley Walker, D-Norfolk, chairman of the state Commission on Early Childhood and Child Day Care Development, said he was concerned about what will happen to the council now that block grant funds are out of its hands.
Walker, who fought to defeat the bill that would have abolished the council, said he was led to believe during the General Assembly session that the loss of state funding for the council would be made up with federal dollars, enough to allow the council to continue its administrative functions.
Walker met with Allen, state Secretary of Health and Human Resources Kay Coles James, Ruppert and others this summer to discuss the proposal to shift block grant funding to the Department of Social Services. Walker said he didn't flat-out endorse the proposal but emphasized his view that the council have its own identity and operate as freely and independently as possible.
"They said they thought it was possible" under the Department of Social Services, Walker said. "I said I had my doubts about that."
Walker said he was baffled about what has happened, primarily because of complaints to him about the 10 percent that some Head Start families now are required to pay. He said it did not come up at the meeting this summer. Ruppert said the administration was aware then that shifting the block grant to Social Services would require families to pay 10 percent of the cost.
"I think that the commission I chair should be given full explanation of how that's operating and what's taken place," Walker said. "In my mind, we haven't received that yet."
Some see the shift in block grant management as fitting into the state's plan to move welfare recipients into self-sufficiency.
Requiring families who receive subsidies for all-day Head Start programs to pick up 10 percent of the cost frees subsidy funding for other families, said Paula Mercer, a day-care specialist with the Department of Social Services. About 10,000 families statewide are on a waiting list, she said.
"We have a limited pot here," Mercer said. "If you're paying 10 percent, we only have to pay 90 percent of the cost. We can pay less and help more people."
Self-sufficiency is the goal of the state's welfare plan: When a recipient "pays a portion, they're helping to get ready" to move off the rolls, Mercer said. "Eventually, they're going to have to pay 100 percent. It has to do with personal responsibility."
The Allen administration has increased funding for all-day Head Start programs by $1 million statewide - from $3.3 million to $4.3 million.
"One of the keys to the success of welfare reform is going to be available child care," Mercer said. "And this program provides one more community resource to help families find good child care."
But what might be absent is a full-fledged state agency with an interest in enhancing the quality of Virginia's lagging child-care efforts. With its primary function now in the hands of Social Services and its offices physically in the department's quarters, what's left for the council to do?
Ruppert said the council still has oversight of activities funded by block grants and continues to have "strong policy power."
The council's primary activity now, however, is righting itself after an internal shake-up this summer.
After an audit showed problems in the council's accounting records, Allen asked 14 of the council's 15 members to resign and named new appointees. One council member, appointed several months before the shake-up, kept his position.
The audit, conducted by the state auditor of public accounts, found inadequate documentation, coding errors in recording transactions, violations of state procurement regulations and other problems that made deciphering the records difficult, said Walter Kucharski, the auditor.
"It was not a complimentary audit by any stretch of the imagination," he said. "It does say there were fairly significant problems."
Procurement violations included involving people who could benefit from contracts funded by block grants in the writing of requests for proposals, Kucharski said.
"The attorney general says it's a technical violation of the state's procurement regulations," he said. "It represents some conflict of interest. You could potentially exclude people who could have gotten those contracts."
An independent accounting firm was brought in to reconstruct the council's books. Kucharski recommended that the council use proper financial management procedures, correctly classify transactions and obey laws and regulations.
The audit report was enough to prompt a Washington Times editorial calling for the council's abolishment and urging the General Assembly to "move expeditiously to comply" with the strike force's recommendation last year to dismantle the council.
"When the feds began handing out the block grants, the council got the job of administering them," the newspaper wrote. "What came next is an unhappy reminder of what can happen to good intentions in the hands of self-serving 'experts' and social engineers."
And the audit was enough for Allen to ask the council members to step down. Most of the 14 had unexpired terms, some not due to expire until next year.
"We were summarily dismissed," said Harriet Lewis, executive director of the Roanoke Valley YWCA, who was appointed to the council by former Gov. Douglas Wilder.
Marian Houk, director of the Annandale Christian Community for Action's child-care program and one of the dismissed council members, said the members found inaccuracies in the audit report and appealed the findings, without success.
"We felt that the accusations made [in the audit] were inaccurate," Houk said. "But the atmosphere was so unaccepting that we chose to step aside."
Walker maintains that the audit was not sufficient reason to dismiss the former council members this summer. The errors were honest errors, not "terrible sins," as some have portrayed them, he said.
"I don't think it was mismanagement in a dishonest sort of way," he said.
Walker fears the council's mission will be relegated to the back burner.
"I just don't want [the council] to get lost," he said. "Now that we're going into welfare reform, it's more important than ever. If we put people to work, it's only natural we'll have a larger demand on child day-care services.
"I don't want to see it slip back. I want to see it move ahead."
by CNB