Child-feeding program reimbursements delayed due to NC accounting software switch
For at least the second time in three months, state software changes have delayed payments in a program that reimburses child care businesses for the food they feed young children, pushing some providers to the brink in an already struggling industry.
One business owner told WRAL News she had to get a bank loan to stay open. Another said loans are hard to come by because of her uncertain cash flow. A third said she started working as an Uber driver to make ends meet while she awaits reimbursement.
“My daycare opens at 6:30 a.m., and it closes at 5:30 p.m,” said Patricia King, 66, who runs a child care service out of her home in Mecklenburg County. “I go Uber anywhere from 6 p.m. to, maybe 8, and on the weekends.”
The Child and Adult Care Food Program reimburses daycares that serve low-income families for food they provide, as long as the meals are nutritious and the daycare meets requirements. The program is federally funded, but the money flows through the state Department of Health and Human Services.
In recent months, DHHS has moved the program to a new data system and transitioned it to a new accounting system now used by all state agencies. The changes delayed millions of dollars in payments in October. Millions more are delayed now, though the department said Thursday that it expects the $6.8 million outstanding reimbursements — to cover food daycares purchased in October and November — will be paid by the end of this week.
That’s within the 45 day reimbursement window allowed by federal regulations, but providers told WRAL News they’ve never seen delays like this over decades in the program. Many have come to rely on the predictable cash flow in an industry struggling to find a sweet spot between paying wages competitive enough to keep staff on board and pricing parents out of the system.
“I’ve been in business for 30 years, I’ve never seen anything like this,” said Susie Carpenter, of J&S Blessed Day Care in Albemarle.
“They told me it’s a computer glitch,” Carpenter said. “And I don’t believe in computer glitches lasting that long.”
Current delays are tied to implementation of the new North Carolina Financial System, an accounting system that went live across state agencies in October. A DHHS spokesperson said the department is working with the Office of the State Controller to address the issue.
Controller’s office spokesman Michael Euliss said the financial system is working fine, but there are growing pains. “It’s not a system issue, it’s more of a ‘let-me-get-used-to-using the system’ issue,” he said.
The Child and Adult Care Food Program has lots of regulations, and many child care services work with nonprofit organizations that file claims and make sure those regulations are met. Vicki Lipscomb is on the board of a group that oversees the program for businesses serving 14,000 children.
“People are calling and saying, ‘We don’t have food money,” Lipscomb said. “Child care is a vulnerable industry.”
A spokesman for Gov. Roy Cooper said the governor is aware of the issue.
“Any new system has challenges, but the governor shares the frustration of agency employees and vendors who have gone unpaid,” Jordan Monaghan, a spokesman for the governor’s office, said in an email “He expects agencies and the controller’s office to act with urgency to address these issues and mitigate impacts."
