DAY-CARES MAY LOSE REIMBURSEMENTS

More than 40 day-care agencies in Missouri soon could have higher grocery bills because state and local agencies misinterpreted food reimbursement regulations from the U.S. Department of Agriculture.

Missouri Department of Health officials recently discovered the discrepancy during an internal review of the Child and Adult Day Care Food Program, which began in the 1970s to ensure children received proper nutrition. The program provides day-cares with about $30 million in reimbursements

About 40 day-cares were not eligible for the program and have until Feb. 29 to either comply with the existing USDA requirements or forfeit their food reimbursements.

In Southeast Missouri, at least six day-cares were not eligible for food reimbursements, which total about $500 a month. No one is certain if the money must be repaid.

Sue Bippen, a Fruitland child-care director who might suffer a financial loss under the changes, talked to U.S. Rep. Bill Emerson last week about the problem. At first she was told that her day care was ineligible because the building didn't look like a house.

"First, I would like to know when the eligibility requirements for this program were established and if they were statutory or regulatory," Emerson said in a letter to the USDA. "Also, it has come to my attention that several states, Missouri included, were found to have recipients of the CACFP who were not in compliance with these eligibility requirements."

The problem with the food program isn't just that day-cares are losing funding; the problem is that they should never have been enrolled in the program, officials say. There has been a three-year lag since the USDA program requirements changed and Missouri officials notified day-cares of the changes.

USDA officials first sent a memo to state agencies in October 1993 asking for compliance. Another memo was sent out in May 1994 asking for compliance by Sept. 30, 1994. But Missouri officials didn't notify day-cares until December 1995.

Under the requirements for participating in the program, only day-cares that operate in a private residence or are not-for-profit centers are now eligible. For-profit centers where at least one-fourth of the enrollment qualifies as low-income families are also eligible.

The program was "set up on the assumption that some mom would be keeping three or four neighbor kids in her home," said Phil Shanholtzer with the food and consumer service, an agency that oversees USDA assistance programs. "But people have expanded beyond the home and claim that status."

When the policies were reviewed at the federal level, "it was at the same time as the child-care statutes changed in 1993, and it was a sensitive time," said Deborah Markenson, chief of the food program and nutrition education with the Missouri Department of Health.

The discrepancies in the program weren't found at the state level until last year when the health department began preparing for an upcoming USDA program evaluation. Officials found 40 day-care centers were receiving money but shouldn't have been.

"Knowing they are in that situation, the state agency can't continue to pay," Markenson said. "We don't like to have to do that but unfortunately we discovered they were not eligible."

Since she's no longer eligible, Bippen might have to raise tuition at her day-care, which could also mean a loss in enrollment. About 20 children are enrolled at the center now.

Parents don't want to work just to pay for day care, Bippen said.

The change in eligibility is only hurting the middle-size day=cares, said Regina Coffey, director of the Delta Area Economic Opportunity Corp. in Portageville, an agency that works as a liaison between the state departments and the local day-cares.