Alberta auditor general questions if parents received proper daycare subsidies
Assessment found more than half of daycares records didn't match grant claims
Parents and guardians may not always be receiving the daycare subsidies they are entitled to, according to a review by Alberta's auditor general.
Likewise, child-care workers who are entitled to wage top-ups through the Canada-Alberta child-care agreement may not be receiving the full amount they are due, Auditor General Doug Wylie has found.
Wylie said the Alberta government did not consistently ensure child-care operators that collected provincial subsidies and federal grants to reduce the cost of child care passed that fund on to parents and employees.
"The goals of this program are affordable, quality child care in the province, and we believe that Albertans should have confidence that these funds are achieving the program's purpose," Wylie said in a Thursday interview, after releasing a series of reports.
The province spent $1.1 billion of provincial and federal funding in 2023-24 on programs designed to make child care more affordable for families and retain child-care workers.
Alberta is in its final year of a five-year agreement with the federal government, which is supposed to expand the number of child-care spaces and reduce the average cost of pre-school age child care to $10 a day.
The province cancelled the provincial child-care subsidy program on April 1 of this year.
Wylie's team studied claims made by 25 Alberta child-care operators during a two-year period.
In one month, at least 14 of the operators had discrepancies between the grant funding they claimed and the accounting of hours of child care provided or workers' hours, the report said. One operator overstated a claim that netted them $26,000 more than they should have been paid, the auditor found.
The team found the provincial government wasn't routinely checking whether children's attendance matched the grant claims, whether children were recorded in the right age category, whether worker hours were accurate or whether the money was passed on to parents or workers. In some cases, they said, a child was counted twice.
Wylie's team recommended the responsible ministry verify the claims are accurate and check that operators are using the money how they're supposed to.
Assistant auditor general Patty Hayes said in an interview that a few daycares presented families with detailed descriptions of how the grants were applied to reduce their fees, but many did not.
Parents are within their rights to ask the government or their daycare provider for an explanation of how the grants reduced their fees.
The auditor said his team's work was delayed by the responsibility for child care being moved between three different ministers and departments in the last two years.
In a Thursday statement, Education and Childcare Minister Demetrios Nicolaides, who assumed responsibility for the file in May, said he's working with department officials to make grant claims more streamlined and accountable.
The ministry will also introduce child care participant numbers for each child to improve accountability, he said.
"We have made extensive changes to manage the unprecedented influx of public funding into our child-care system since the audit review period, but we know there is more work to do," Nicolaides' statement said.
The minister has also hired an audit firm to investigate irregularities, Nicolaides's press secretary said in an email.
The NDP's child care, child and family services critic Diana Batten said the province's difficulty ensuring daycare centres and day homes were accountable for the funding shows the Alberta government did not take the program seriously.
"It's just incredibly frustrating," Batten said. "I hear from parents. I hear from operators. This program is incredibly important and to see this complete disrespect of the program … it's just par for the course."
Batten said she worries the government will try to blame child-care operators for any missing money rather than making the system more user-friendly. The auditor's findings could also put the funding agreement with the federal government at risk, she said.
Government paid millions in aid to ineligible businesses
Wylie's team also revisited previous recommendations made to the Ministry of Jobs, Economy, Trade and Innovation about a COVID-19 pandemic era emergency grant.
The small and medium enterprise relaunch grant (SMERG) provided more than $670 million to more than 48,000 small and medium businesses subject to pandemic health restrictions that lost more than 30 per cent of their revenue.
The auditor says the government wanted to act quickly, and allocated the grants before verifying the business was eligible for funding. It classified recipients as low or high risk for being ineligible.
When the auditor checked more than 1,000 business' records in 2022, staff found more than half of SMERG recipients shouldn't have qualified for the funding.
The government estimates it gave out between $52.5 million and $105 million in grants to businesses that should not have been eligible. However, Wylie's team said that number could be as high as $158 million.
The government has tried to recoup some of the money, and claimed back $1.4 million so far, the auditor general says. However, Wylie said the government stopped those efforts when it could spend more money trying to get the money back than it was likely to recoup.
"Benefit programs should verify applicant eligibility before making payments," Wylie said. "Not doing so can waste a significant amount of Albertans' money."
The auditor general found the province made a similar mistake when granting emergency isolation payments to people who couldn't work because they were ill with COVID-19 or caring for someone who was.
Further, Wylie said the government has reported little information to Albertans about whether SMERG was a successful program.
"The effectiveness of programs shouldn't be measured only by how quickly money gets held the door, but by whether the program delivers the results it was designed to achieve," Wylie said.
In a statement, Jobs Minister Joseph Schow said the government created SMERG in 2020 to urgently help businesses to stay afloat.
Schow said the department has since done three rounds of eligibility checks, and found the "vast majority" of applicants rightfully received funding. Employees continue to collect repayments from ineligible businesses, he said.
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