❓WHAT HAPPENED: Washington State auditors revealed that over $1.3 billion in childcare subsidies from 2021 to 2024 are unauditable due to missing records and poor tracking systems.
👤WHO WAS INVOLVED: The Washington State Auditor’s Office, the Department of Children, Youth and Families (DCYF), and state officials.
📍WHEN & WHERE: The audit covered spending from 2021 through 2024 in Washington State.
💬KEY QUOTE: “Determining fraud requires criminal evidence and can only be done by enforcement agencies in conjunction with the judicial system.” — Washington State Auditor’s Office
🎯IMPACT: Washington taxpayers are left with unanswered questions about the allocation of over $1.3 billion, with concerns about fraud and oversight failures mounting.
Government auditors in Democrat-dominated Washington State say that more than $1.3 billion in spending through the state’s childcare subsidy system cannot be verified. The audit, covering 2021 through 2024, revealed that the Department of Children, Youth and Families (DCYF) failed to maintain the necessary records to track federal childcare funds at the provider level, leaving a slew of expenditures and other payments unaccounted for.
Concerningly, the financial review found in 2024 that $416 million was unauditable, with $356 million in 2023, $268.5 million in 2022, and $293 million in 2021. The State Auditor’s Office (SAO) described the situation as “serious and troubling,” noting that it had to “disclaim” the entire program due to the lack of documentation.
Notably, another audit in 2025 uncovered $37 million in questionable payments within a single year, linked to missing attendance records, overbilling, and insufficient documentation. DCYF admitted to $2 million in overpayments, while auditors noted it was “impossible” to trace payments for four consecutive years. Internal reviews revealed that 67 percent of audits identified overpayments, raising concerns about the system’s ability to prevent errors before funds are distributed.
Critics argue that the program operates on a “pay first, verify later” model, with no reliable way to confirm whether services were actually provided. However, the state auditor notes that the agency is unable to investigate and determine whether fraud occurred or what portion of the $1.3 billion in unverified spending is the result of criminal activity.
“Determining fraud requires criminal evidence and can only be done by enforcement agencies in conjunction with the judicial system,” the state auditor contends, adding, “We are a reporting agency, not an enforcement agency. The responsibility for correcting problems uncovered by audits lies with the leaders and managers of the agency, as well as with federal entities who distribute the funds.”
Image via Seattle City Council.
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