AB 862

The Wisconsin Works (W-2) program under current law provides work

experience and benefits for low-income custodial parents who are at least 18 years

old. Also, an individual who is the parent of a child under the age of 13 or, if the child

is disabled, under the age of 19, who needs child care services to participate in

various education or work activities, and who satisfies other eligibility criteria may

receive a child care subsidy for child care services under W-2. This child care subsidy

program is called Wisconsin Shares.

Under current law, the Department of Children and Families (DCF) sets the

maximum payment rates for child care providers who provide services under

Wisconsin Shares and may modify an individual child care provider's payment rate

in the following manner on the basis of the child care provider's quality rating under

the quality rating system known as Young Star: a provider who receives a one-star

rating may be denied payment; a provider who receives a two-star rating may have

the maximum payment rate reduced by up to 5 percent; a provider who receives a

three-star rating may receive up to the maximum payment rate; a provider who

receives a four-star rating may have the maximum payment rate increased by up to

10 percent; and a provider who receives a five-star rating may have the maximum

payment rate increased by up to 25 percent. Under the bill, DCF is required to pay

an individual child care provider on the basis of the child care provider's quality

rating under Young Star, as follows: a provider who receives a one-star rating is

denied payment; a provider who receives a two-star rating is paid the maximum

payment rate; a provider who receives a three-star rating is paid the maximum

payment rate plus 5 percent; a provider who receives a four-star rating is paid the

maximum payment rate plus 10 percent, and a provider who receives a five-star

rating is paid the maximum payment rate plus 25 percent.

For purposes of reducing the cost of Wisconsin Shares, current law allows DCF

to adjust the amount paid to child care providers under the program. Currently, DCF

pays or reimburses licensed family child care providers based on a child's actual

attendance, while DCF pays licensed group child care providers based on a child's

enrollment with the provider. Under the bill, DCF must base the payment for a child

receiving care from a licensed family child care provider on the child's enrollment and

may not base the payment to a licensed family child care provider on a child's actual

attendance. Additionally, the bill eliminates DCF's authority to adjust the amount

paid to child care providers for purposes of reducing costs in Wisconsin Shares.

Under current law, DCF must establish a program to investigate fraudulent

activity by participants in W-2, which includes Wisconsin Shares, and establish an

incentive program to provide rewards to local agencies administering Wisconsin

Shares for identifying fraud in the program. The bill requires DCF to establish

policies and procedures to prevent fraud in Wisconsin Shares and requires the

Legislative Audit Bureau to annually audit such policies and procedures. Finally,