Missing subsidy payments from Missouri education department could shutter local day care

Stacy Taylor, director of Tiny Hearts Creative Enrichment Center, helped start the day care provider at 316 S. Plaza Way in Cape Girardeau in November 2023. Less than a year after opening, she now says the center is in danger of closing because of a lack of subsidy payments coming in from the State of Missouri.

“The state started a new system back in December, and that was still when we were really new. I don’t know if things just got lost in the transition or what exactly has happened, because I feel like we’ve been on this the entire time with issues getting paid, and other day care centers, it seems like their subsidy is coming through more like its supposed to,” Taylor said.

She said she is aware of at least two other area day cares, one in Jackson and another in Cape Girardeau, which stopped working with families needing subsidies because of recent difficulties in receiving payments.

At Tiny Hearts, the parents of all but a handful of the 55 children there pay using the state’s Child Care Subsidy Program. This program, operated by the Missouri Department of Elementary and Secondary Education (DESE), pays for all but a small portion of the cost of child care for eligible parents while they work and, ideally, lift their families out of poverty.

“So in theory, it’s good and helpful. It just isn’t working for us,” Taylor said.

In order to qualify for child care assistance in Missouri, families must have a child age 12 or younger, or one with special needs or receiving protective services; need child care to go to or search for work or attend job training or school; and be at or below 150% of the federal poverty level. Effective January 17, the federal poverty level is $15,060 for one individual and an additional $5,380 per person in the household.

However, while families are paying what they owe, most of the state’s payments are not reaching the day care.

“We can’t run this thing on $1,000 a week that the parents are paying us,” billing director Nancy Jessup said. “Our payroll is a little over $5,000 a week. Then you have utilities, insurance, rent, you have all of those bills. And when the state is not paying you, it has to come from somewhere.”

Between around the start of May and Thursday, June 6, the state owed Tiny Hearts more than $46,000. The day care had received less than $10,000 from parents at that same time.

An unintended cause

Taylor and Jessup point to the state’s Child Care Data System, or CCDS, as the problem. It is Missouri’s new online platform for child care payments, implemented late last year, and the transition has been a rough one for them. They have received only a fraction of the subsidy payments the state should have given them since CCDS went live, even though payments should be received after just one to two months.

“DESE’s Office of Childhood (OOC) launched the CCDS in December 2023, and there have been a number of unforeseen challenges during the transition, which involves loading family and provider data from the existing, outdated state systems into the new CCDS,” DESE’s chief communications officer Mallory McGowin said in a June 3 email to the Southeast Missourian. “The OOC is working hard to mitigate these issues and sincerely apologizes to the child care providers and families affected.”

McGowin said most of the processing payment corrections require manual fixes by OOC and vendor staff, which take longer to complete.

“Payments are now being processed daily for attendance claims and corrections submitted by providers,” she said.

The operators of Tiny Hearts said, despite repeated attempts to receive payments dating back to January, they are still waiting for DESE to send them the majority of what they are owed.

“We have 41 (payment resolution requests) that we haven’t been paid for. Forty-one of them that are just sitting there ready to be invoiced and be paid, but then nobody has picked them up to work them,” Jessup said May 31. “… We have several times been told that they were going to escalate our case because it had been so long and they hadn’t resolved our situation yet. They said they’d escalate it to a supervisor and then we don’t hear anything back.”

McGowin said the reason child care providers often don’t receive payment corrections on time is because either they are not yet authorized to take care of certain children or the parents’ accounts are missing information or have not yet switched to CCDS.

Taylor showed a Southeast Missourian reporter a list of all the authorized children and said she informs parents about the importance of correctly inputting their information.

“If you don’t do it now, they’re not going to back pay beyond when you applied. So, if you don’t apply now, you’re responsible for the money the state would pay until the day you apply. So that’s a motivator,” she said.

A potential solution

Taylor and her 15 staff members oversee children from around 30 families from infancy to age 12.

“It’s hard to find a spot and a lot of our families have multiple children in different rooms, and it makes it really difficult if one of your children is an infant and you’re having to go to different places to get care for your kids because there’s not availability,” Taylor said.

She made it a point to watch over infants, since day cares providing care for them are often harder to find, despite the State of Missouri requiring more staff to oversee them.

“We want to give people a chance to be successful and support their families but, at the same time, we’re trying to support our families,” she said.

In the past few days, Tiny hearts has been receiving some more of its subsidy payments. On Thursday, after calling Gov. Mike Parson’s office, Jessup heard back from a staffer and was connected with a DESE representative who said the department aims to complete every payment resolution request by the end of the summer.

“I explained we’re going to have to close by the end of the month if we don’t do something,” Jessup said.

The representative said she would call Jessup on Monday, June 10.

“Now, they say this, but how many times have they told us they’re going to do something and don’t do it? Every time they call,” Jessup said.

She had called various government representatives looking for solutions almost daily since the payment issues began.

“We’re not asking for a handout. We’re not asking for anything free,” Jessup said. “We’re just asking for what’s been owed us.”