Frederica Freyberg:
But first, the Wisconsin Shares program and some people getting more than their fair share from it. According to a state audit, mostly Milwaukee child care businesses received as much as $20 million in fraudulent subsidies last year alone. The nearly $400 million government program pays child care costs for low-income and W-2 participants. One audit showed that in 2008, 47 Milwaukee providers were paid more than $2.5 million despite the fact that when investigators showed up on several occasions, no one was at the centers. No kids, no workers, no owners. Secretary Reggie Bicha took some tough questions from joint finance committee members at the Capitol Tuesday, including this from Republican Sen. Alberta Darling.

Alberta Darling:
Why did it take so long to uncover all of this fraud?

Reggie Bicha:
It was built on the assumption that people would do good things for kids and would be good business stewards and we have all learned that indeed is not the case.

Frederica Freyberg:
Certainly not. Secretary Bicha says in recent days his agency suspended payments to one Milwaukee provider getting money for 223 children, supposedly running two full shifts of childcare and 94 percent of the children were those of employees. But during a visit by agency staff last week, only 16 children were at the center. We sat down with Reggie Bicha and asked him about his concerns over the fraud.

Reggie Bicha:
Well, the extent of the fraud is significant, especially in Milwaukee County, our largest county. The Legislative Audit Bureau did an audit earlier this year, and they identified estimates of well over $20 million a year being spent fraudulently. We're working very aggressively to address fraud in this program. We've been a department for just a year and we inherited a situation where the Shares program has been overrunning budgets by tens of millions of dollars for six or more consecutive years. The Journal Sentinel and the Legislative Audit Bureau suggested that fraud has been going on for an extensive period of time. We've been hitting the ground running to address this problem.

Frederica Freyberg:
You were on the hot seat before the legislature. Republicans in particular are demanding your accountability suggesting your agency was asleep at the switch. How do you respond to that?

Reggie Bicha:
Well, the Department of Children and Families did not create the problems in child care and specifically Wisconsin Shares. Gov. Doyle created the department to fix the problems in Wisconsin Shares. They started 14 months ago and we knew that there were these overruns in Wisconsin Shares and the governor sat me down early on and said, ‘Look, this program seems to be financially out of control. I need you to look into it and find out what's going on and then fix it.’ In the past year, we've diagnosed the problem, we've come up with strategies to address the problem and fix it. We worked with the Legislature to change the laws to give us the tools necessary to stop the problem and now we're using those tools in a very aggressive manner to hold child care providers and parents who are defrauding the system accountable.

Frederica Freyberg:
What are some extreme examples of this?

Reggie Bicha:
Well, we have a private investigation firm we're working with now who are going to child care centers where we suspect that fraud may be occurring. Let me give you an example of a child care center they went to a week or so ago. A child care provider was telling us they were serving 43 children every day without error. We send an investigator over to the agency to pull their attendance records to verify their attendance and the day that the investigator shows up, no one is there. No children, no child care providers, no one answers the door when we knock on the door. Those are the types of egregious situations we're seeing.

Frederica Freyberg:
In other words, they are saying they are caring for children and getting state subsidies to do so but are not?                        

Reggie Bicha:
That's true. Or are not caring for the number of children they report to be caring for. We go to other child care centers where there may be two or three children but they reported for months they're caring for 30, 40, 50 children.    

Frederica Freyberg:
How much do they get per child from the state?

Reggie Bicha:
The rates were set — they're set annually by the Legislature. We’re currently on 2006 rates. I would have to get back to you on the specific rates.
                           
Frederica Freyberg:
I heard during testimony yesterday that they can put in for or the annual rate is somewhere between $8,000 and $10,000 per child?

Reggie Bicha:
So the way that — when a child care provider, they are certified or licensed for a certain number of children that they can care for. The average reimbursement using the Shares funding, the rate the states pays, an avid child care provider earns about $8,000. Somebody effective and had good attendance, kids really come, may be able to average on the good end, about $10,000. We use that measure to compare that to what child care providers across the state were reporting. And we saw some child care providers, one in particular in Milwaukee reporting that they were earning $30,000 per slot. That clearly was a red flag and we sent investigators to that facility and have suspended payments and are pursuing investigation.

Frederica Freyberg:
How many child care providers have you suspended payments for to date?

Reggie Bicha:
Over 69. My hesitancy is it's changing every day but well over 69.

Frederica Freyberg:
What else are you doing specifically?

Reggie Bicha:
We created a fraud hotline and we'll give you the number so you can share it with your viewers where we're asking folks in the community, parents in particular that suspect fraud in the child care center that they should call and notify us so we can send investigators out to look into it. We've also announced an anti-fraud task force. The district attorney and Milwaukee County are pooling together folks from the Department of Children and Families, the Milwaukee Police Department, sharing resources, information so that we can investigate, shut down child care providers and hold them accountable in the court of law.

Frederica Freyberg:
What is your message to providers or parents that are inclined to rip off this program?

Reggie Bicha:
The jig is up. If you've been ripping off the program for years, you need to stop. We will find you. We know how the game is played. We are working aggressively, sharing information and we will hold you accountable.

Frederica Freyberg:
Children and Families Sec. Reggie Bicha says the state is moving aggressively against rip-offs by running so-called red flag reports to identify suspected fraud, tracking attendance and payment records. The department has a new fraud unit, private investigators, a fraud hotline and Web site and now suspends payments to providers when fraud is even suspected. Bicha says the fraud is so heavily concentrated in Milwaukee, 95 percent of it, that his agency, the state, is assuming responsibility for Wisconsin Shares there as of January 1. According to the agency, since 2004, Milwaukee County has returned $4.3 million to the state gave it to run Wisconsin Shares. Money, state officials say, that could have been used to police fraud in the program.