Analysis: Another troubled state program, bankrolled by Uncle Sam’s COVID-19 aid

Legislative auditors issued a scathing report this week, blasting a statewide child care grant program. Department of Health and Welfare Dave Jeppesen denies all wrongdoing. “The grants are helping children across Idaho learn and stay safe, and we’re proud to be a part of it.”

Maybe you’ve heard this one before.

A state agency moved quickly — too quickly — to push federal COVID-19 aid money out the door. Speed superseded safeguards. Taxpayer dollars were spent improperly, maybe illegally.

That’s what happened with Empowering Parents, Idaho’s popular but problematic education microgrant program. And according to legislative auditors, that’s also what happened with the Community Partners Grant program — an attempt to help children struggling through a global pandemic.

A pattern? Maybe not. The Department of Health and Welfare vehemently defends the Community Partners Grant rollout, denying all wrongdoing.

But the Legislative Services Office audit, released Monday, reads like a how-to guide for screwing up a startup. Among the auditors’ allegations:

  • Given $36 million to spend in 2021-22, Health and Welfare actually spent $36.4 million.
  • Health and Welfare didn’t make sure grant recipients spent the money properly. In 2021-22, before Health and Welfare awarded $36 million-ish in grants, recipients proposed using $3.1 million to cover rental assistance, building upgrades, cameras, drones and other equipment — all ineligible expenses. “Based on the documentation maintained by the department, grant funds were likely used for items outside the (grant) parameters,” auditors wrote.
  • Some grants served kids under the age of 5. Even though legislators wrote this restriction into the 2021 law: “Grants shall be used for serving school-aged participants ages 5 through 13.”
  • While Health and Welfare moved quickly to implement the 2021 law and get the grant program up and running, that didn’t translate into prompt payments. More than a third of the payments went out late — sometimes by more than a month.

Some of the auditors’ findings were academic. If this year’s first payments went out on Jan. 3, two days after a New Year’s Day deadline, that might not be a big deal.

But budget bills aren’t ballpark estimates, so overspending is a big deal. And the question of serving preschoolers is also a big deal — and central to this whole controversy.

Sen. C. Scott Grow, R-Eagle

On Feb. 10, Health and Welfare Director Dave Jeppesen met with Sen. C. Scott Grow and Rep. Wendy Horman, co-chairs of the Joint Finance-Appropriations Committee. He told the lawmakers that some grant-funded programs might be open to preschoolers. This included several school district programs — in Nampa, Basin, Kendrick, Marsing and Murtaugh.

Health and Welfare maintains that these programs followed federal guidelines, which directed spending to support kids up to age 13.

Statehouse politics is its own universe, however. As Horman said this week, lawmakers tightened up the age restriction because, earlier in the 2021 session, the House narrowly rejected a federal preschool grant. In order to pass a bill to help kids cope with learning loss and other pandemic aftereffects, lawmakers had to limit the program to school-age children.

Rep. Wendy Horman, R-Idaho Falls

After their meeting with Jeppesen, Grow and Horman sought to rein in the grant program. One bill sliced spending by $14.4 million — mirroring the amount of money that went to programs that may have served preschoolers. Another bill called for the LSO audit.

A flabbergasted Horman eagerly shared the 55-page report with journalists this week. “I was surprised at how widespread the lack of compliance with the law was,” said Horman, R-Idaho Falls.

And almost as quickly as Horman shared out the audit, Jeppesen was quick to issue a statement defending his agency. “I am so grateful to the staff at DHW for working incredibly hard to create a successful, appropriate, accountable program that has positively impacted thousands of Idahoans, especially children.”

Two programs — and striking parallels

Empowering Parents and the Community Partners Grant programs had the same laudable goal: helping children come out on the other side of a global pandemic.

Both fast-moving programs also have had a far reach. The state has issued $49.4 million in Empowering Parents grants to more than 49,400 students — helping parents pay, largely, for home computers, internet access and learning materials. Health and Welfare has pushed its grants to dozens of nonprofits and libraries statewide, and eight school districts, according to a spreadsheet the agency provided to Idaho Education News on Wednesday.

But in the quest to spend money far and wide, both programs have also run into trouble.

During a rocky first year, the State Board of Education flagged nearly 500 improper Empowering Parents purchases — covering $180,000 worth of TVs, smart watches and other off-limits items — and an additional 4,500 purchases may or may not be legitimate. State Board leaders downplay these problems and tout the program’s successes, but the fact remains that Gov. Brad Little has ordered an independent audit of one of his favorite education initiatives.

The LSO audit only raises accusations, disputed by Health and Welfare, but it paints a picture that could be uglier than the Empowering Parents mess. And it didn’t take long for this controversy to catch fire this week.

Attorney General Raúl Labrador — already embroiled in a lawsuit with Health and Welfare over his attempts to investigate the grant program — latched onto a damning piece of the audit. LSO said Labrador should investigate the program, for possible civil or criminal offenses. “This is a sad day for Idaho,” he said in a statement. “The LSO report confirms that there were violations of Idaho law. … We are now evaluating our next steps under both civil and criminal law.”

As if on cue, the Idaho Freedom Foundation pressed for legal action, and said the Legislature should pull the plug on funding “woke pre-K and child care providers.”

On the other side, Little says Idahoans “should let the process play out before casting judgment” on the legal issues, spokeswoman Madison Hardy said. But she pointed to a judge’s ruling and a pair of attorney general’s opinions, including one from Labrador’s shop, that said the program complied with state and federal law.

Former state Rep. Greg Chaney, R-Caldwell

While Little was measured, Caldwell attorney Greg Chaney came in hot. The former legislator — now representing two grant recipients, the United Way and the Idaho Association for the Education of Young Children — accused Labrador of pressing auditors to take his side, advancing a “flawed conclusion that would justify his abuse of power.”

This could be some great political theater.

But it shouldn’t overshadow an important public policy question.

Almost as soon as the state started counting COVID-19 cases, the federal aid dollars started to pour in. State government, K-12 and higher education were among the biggest beneficiaries. It isn’t just fair to ask where it all went. It’s essential.

Horman says it’s time for more scrutiny at the Statehouse, although she doesn’t draw the line at Uncle Sam’s COVID-19 money.

“We want to make sure the agencies are following the law, appropriation law included.”

Kevin Richert writes a weekly analysis on education policy and education politics. Look for his stories each Thursday.

Kevin Richert

Kevin Richert

Senior reporter and blogger Kevin Richert specializes in education politics and education policy. He has more than 30 years of experience in Idaho journalism. He is a frequent guest on "Idaho Reports" on Idaho Public Television and "Idaho Matters" on Boise State Public Radio. Follow Kevin on Twitter: @KevinRichert. He can be reached at [email protected]

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