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INDEPENDENT AUDIT FINDS STATE AGENCY DEFIED IDAHO LAW TO DISTRIBUTE PUBLIC FUNDS

From Anna Miller of the Idaho Freedom Foundation


An independent audit found that the Idaho Department of Health and Welfare defied Idaho law in the grant-making process. Public records further demonstrate that high-ranking administrators deliberately designed the grant process to serve children ages birth to five. Thanks to the efforts of Sen. Glenneda Zuiderveld, the Idaho Freedom Foundation's Center for American Education broke the storysparking this investigation earlier this year.


The Idaho Legislature banned the distribution of grants under the Community Partner Grant Program to entities serving children younger than five. According to a new 55-page report, the Department of Health and Welfare (DHW) disliked this prohibition and subverted the law through their grant process. The DHW funneled money to pre-K and childcare providers, such as the Idaho Association for the Education of Young Children (IAEYC) and its partners, against the law and gave out more money than appropriated.


Childcare and pre-K grants have been hotly contested in the Idaho Legislature for years. In 2021, the Legislature narrowly rejected a $6 million federal grant to the IAEYC because the group promotes the sexualization of children and critical race theory. The investigation of the Community Partner Grant Program is the latest subject in the debate.


The report by the Legislative Services Office (LSO) found extensive evidence that the DHW violated state law by distributing public funds to pre-K and childcare providers. The fraudulent payments exceeded appropriations by about half a million dollars.


The LSO reviewed the Community Partner Grant Program as part of an accountability report for the Department of Health and Welfare for the period between May 10, 2021, and March 31, 2023. LSO found evidence that the DHW allowed grant recipients to use public funds for ineligible purposes and for ineligible age groups that did not meet the purpose specifically defined in Idaho law.


LSO concluded, "These findings are serious enough to report to the Idaho Attorney General pursuant to Idaho Code."

The eight findings, reproduced below, include unlawfully distributing multiple grants to the same entity, not complying with the age requirements for the program, failure to review applications properly to prevent expending funds on ineligible expenses, and payments that exceeded the amount appropriated to the program by $427,350.

“Finding 1 – Department did not maintain sufficient documentation to support award decisions for the Community Partners Grants. Finding 2 – Some Community Partners Grant recipients received more than the maximum amount allowed by statute through the submission and approval of multiple applications using variations of the entity name while relying on the same tax identification number, address, and phone number. Finding 3 – The Department did not provide evidence that they ensured compliance with age requirements for the Community Partners Grants awarded, as required by the legislative appropriation bills. Finding 4 – The Department did not properly review applications for the Community Partners Grants to ensure that ineligible expenses were not included in the applicants’ budget plan, nor did they document an identification or correction of these ineligible expenses prior to approval and distribution of funds. Finding 5 – Status reports required to be submitted by the Community Partners Grant recipients were inadequate to ensure funds were spent in accordance with the requirements of the program. Finding 6 – The Department did not properly document award decisions related to coverage areas identified by the applicant for the Community Partners Grant recipients to ensure the areas identified, and thus the funding provided, were appropriate. Finding 7 – The payments distributed by the Department for phase 1 of the Community Partners Grant exceeded the $36,000,000 appropriation for fiscal year 2022 by $427,350. Finding 8 – Payments to Community Partners Grant recipients were not made on time, in accordance with statutory requirements, for a total of four out of seven required payment periods in fiscal year 2022 and fiscal year 2023.”

The Idaho Freedom Foundation’s Center for American Education obtained public records from the DHW demonstrating that a high-ranking official in the DHW, Erika Rupp, is to blame for subverting the grant process through its design, weak controls, and a deceptive internal audit of the program.


In an email on December 19, 2022, Ericka Rupp, former DHW administrator of the Community Partner Grant Program and close personal friends with Beth Oppenheimer, executive director of the Idaho Association for the Education of Young Children (IAEYC), told Deputy Director Jennifer Palagi that she personally read all the applications, “including IAEYC’s applications again and have confirmed that each application identified had checked the box and signed that they serve children age 5.”


Each grant application asks, “Does your program serve children from 5 to 13 years old?” Potential grantees checked this box because state law requires it. But a careful reading of the grant applications shows many examples of grantees referencing care for children ages birth to five. For example, the IAEYC received at least $10.5 million in grants. In one application to establish an “early learning collaborative,” a statewide pre-K project of the IAEYC, the organization states that it intends to serve children ages “birth to eight,” but in all of its other public documentation at the state and local level, the program is described as serving “ages birth to five.”


Public records show administrators deliberately took guidance from the Office of Child Care for the grant program. Rupp and other administrators of the Community Partner Grant program were in communication with the Administration for Children and Families (ACF) Office of Child Care, who provided “sub-grant” resources, including “sample grant applications” and COVID-19 resources for childcare providers.


In an email on June 17, 2021, Rupp told the Office of Child Care, “[T]hese can be helpful for our learning and designing.” Program Specialist Kori Barbee asked if Rupp could give her a “list of what items we need to design or re-design for these community partner grants."


Rupp is responsible for changing grant applications to require recipients to “Describe how are you [sic] aligned with the E.C.C.E. (Early Childhood Care & Education) Strategic Plan.” In an email on June 30, 2021, Rupp stated, "I'm going to add a question in the Community Grant which references how the organization is aligning with or addressing goals/objectives within the Strategic Plan for Early Childhood." She added, "For those programs we fund in July, I will have them go back and update their narrative to provide insight.” The grants were intended to serve children between the ages of five and 13, yet Rupp wanted to ask potential grantees about “early childhood,” defined as ages birth to five.


Dave Jeppesen, Director of the DHW, said in a statement that the department “welcomes” the audit review but “disagrees with the findings.” Jeppesen said the DHW is proud of the outcomes achieved as a result of the Community program grants. “Idaho’s implementation of this federal grant was recognized by our federal partners as being innovative and aligning with federal goals for the grant. Most importantly, grant recipients brought significant benefit to the children in their communities.” Jeppesen forgot to mention that the grants served children below the age of five, just as Rupp intended, violating the law.

Former Rep. Priscilla Giddings, who helped expose and defeat a previous federal grant intended to go to the IAEYC, commended LSO for their work and said, "Agencies need to be held accountable for violating the law, yet the question remains in our current political landscape if accountability will ever be achieved."


Sen. Glenneda Zuiderveld said, “When this was brought to my desk I was hoping it would get attention. We need to expose the corruption that’s going on in our government. They need to uphold our laws — if they can’t be trusted with little, they can’t be trusted with much. What other laws are they breaking? Is Idaho becoming a state of lawlessness? I’m pleased that the truth is being exposed on this.”


The Legislature and Attorney General should hold the DHW accountable for this illegal use of public funds. According to Idaho Code, “any public officer or public employee who misuses public moneys in violation of section 18-5701, Idaho Code, is guilty of a felony punishable by a fine not exceeding ten thousand dollars ($10,000), or by imprisonment in the state prison for not less than one (1) year nor more than fourteen (14) years, or by both.” Spending authority for the grant program should immediately be rescinded, and leadership in the DHW must be held accountable to the fullest extent of the law.







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