Purpose

The Management Audit Committee requested an evaluation of the childcare licensing process within the Department of Family Services (DFS).  The Committee requested information about whether DFS has adequate resources to perform licensing, whether licensing duplicates other regulatory functions, and whether the agency has sufficient authority to enforce licensing rules. 

Additionally, the Committee asked about the impact of regulation on the supply of providers.  At the time of the review, DFS was in the process of promulgating new licensing rules.  We did not evaluate the appropriateness of current or proposed rules, but this report does consider larger childcare issues that impact the cost and availability of care. 

Background

In recent decades, as more mothers have entered the workforce, the demand for childcare has risen.  Because children in care are vulnerable, every state regulates childcare providers in some form.  Wyoming statute requires all childcare providers that care for more than two children, and are not specifically exempt, to be licensed. 

As of December 2000, Wyoming had 722 licensed providers who were caring for approximately 15,000 children.  About 53,000 children in Wyoming under the age of 12 are in need of childcare, but we estimate only 28 percent of them are receiving care from licensed providers.

DFS’ childcare licensing unit is primarily federally funded, along with a mandatory General Fund match.  The unit has 18 full-time-equivalent positions, including 15 licensers placed in eight regional offices.   

DFS rules for childcare licensing set the basic health and safety standards providers must meet in order to operate legally.  Potential childcare providers must submit an application and pass a facility inspection to obtain a license, and must renew the license annually.

Licensers may observe non-compliance with standards during on-site visits or when investigating complaints.      DFS uses a variety of approaches to ensure compliance, from offering technical assistance to revoking the license. 

Results in Brief

Currently, the licensing unit finds itself straining to fulfill its mission.  We identified several areas in which changes are needed to ensure the effective implementation of childcare standards to best serve children in care.

High turnover and inconsistent workloads have undermined the unit’s ability to perform its primary regulatory mission, and the unit has not established performance goals to measure the effectiveness of the licensing process.  DFS lacks explicit authority to investigate illegally operating providers, and prosecutions are rare.  Also, the licensing unit does not consistently enforce its rules among licensed providers.  Finally, local regulations can impact capacity, or the number of children for whom providers can care, but the different entities involved in childcare regulation do not duplicate one another.  

We identified other childcare issues needing attention that are outside the licensing unit’s statutory mandate.  Regulation by DFS is just one of many factors affect-ing the availability, affordability and quality of care. 

Principal Findings

We found that since 1999, the licensing unit has been experiencing high turnover and difficulty filling licenser positions.  As a result, DFS incurs financial and other costs.  The prime reason for high turnover is that licensers work in contract positions, without benefits.  We recommend the Legislature consider making licenser positions permanent, with benefits.

Additionally, licensers have inequitable, and often high, caseloads and workloads that impact the unit’s mission.  DFS has not established workload standards, and often focuses on ancillary activities that hinder licensers’ ability to perform essential  duties.  DFS should develop appropriate standards for caseload and workload, so licensers can focus on their  primary regulatory mission. 

The licensing unit has not developed performance measures to guide data collection.  In response to an evolving program, management has focused on day-to-day operational demands.  The unit needs to develop performance measures and ensure that it collects the data necessary to evaluate program effectiveness.

Statute requires all but exempt childcare facilities to  be licensed before providing care.  However, most Wyoming children in childcare are cared for not by licensed providers, but by unlicensed providers, who may not be legally exempt.  When DFS receives reports of illegally operating providers, it lacks explicit authority to investigate them in order to build a case for prosecution.  Prosecuting attorneys appear to be hesitant to prosecute illegal providers.  DFS needs to take the lead in developing a workable process to investigate and prosecute illegal providers.

We identified inconsistencies in how licensers implement and enforce current rules with providers.  As a result, children may not be uniformly protected and providers may not be treated equitably.  We found the primary reason for inconsistencies is the lack of written policies and procedures.  The unit should develop a policy manual to reduce reliance on licenser discretion in making decisions that affect individual providers. 

Policymakers have expressed concerns about whether sanitation, fire, and nutrition agencies that also inspect childcare facilities are performing duplicative inspections.  However, we determined that these inspections are not duplicative with each other or with DFS.  Further, consolidated inspections are impractical because specific expertise is needed to ensure compliance with certain requirements, and the inspections need to be conducted under different conditions. 

Some childcare providers in Wyoming must meet local requirements that are more stringent than DFS rules.  These requirements can limit the capacity of providers.  We recommend the Legislature consider either exempting childcare facilities from local regulations or working with local officials to expand childcare supply.

Finally, many of the issues at the heart of the debate over childcare are much broader than the regulation of providers.  Even if the licensing unit were working optimally, larger childcare issues are not appropriate for the licensing function to take on.  Further, DFS cannot address these matters alone.  We recommend the Legislature authorize a task force to develop options for increasing the affordability, availability, and quality of childcare in Wyoming.  

Agency Comments

The agency agrees with seven of the eight recommendations in the report and partially agrees with the recommendation about developing appropriate standards for caseload and workload. The agency believes it has taken other activities into account when distributing workloads to its licensers.