UPDATE: CA Department of Education Issues Notice of Non-Renewal After State Audit Reveals Alarming Practices at Community Child Care Council of Santa Clara County
Audit validates concerns of parents, providers, and employees
San Jose, Calif. – On April 5, 2018, California State Auditor Elaine M. Howle released a 63-page report detailing questionable and unfair practices by the Community Child Care Council of Santa Clara County (4Cs). In the wake of the audit, the California Department of Education (CDE) issued 4Cs a Notice of Proposed Action that same day informing them they would not be offered continued funding for child care for Fiscal Year 2018-2019.
4Cs is the largest non-profit agency that serves as a link between families and child care providers in the County of Santa Clara. For thousands of working families, all paths to affordable child care lead through 4Cs.
“It is heartbreaking how 4Cs has abused the trust of our community and deprived our families and children of the quality child care they need and deserve,” said Riko Mendez, Chief Elected Officer of SEIU 521.“We believe the County should play a leadership role in ensuring that Santa Clara families get the child care services they deserve and look forward to working with whichever agency takes over these critical services to ensure this type of tragedy never occurs in our community again.”
The results of the audit reinforce what 4Cs employees, Child Care Providers, and parents have been saying for years, including how 4Cs:
- Unfairly disrupted and terminated services to some families;
- Terminated a preschool program seemingly to avoid further scrutiny;
- Misused state funds;
- Paid providers late, creating unnecessary financial hardship for them;
- Engaged in questionable management of its employee retirement plans.
The state audit outlines 4Cs’ pattern of improperly backdating their Notice of Action forms to families, which allowed them to avoid paying potential penalties for giving parents inadequate time to respond. This practice of backdating Notice of Action forms also created deadlines that the State Auditor called “unreasonable,” and which led to “families having their childcare services terminated unjustly.”
According to the state’s audit, backdating occurred in, “more than 15 percent of [4Cs’] Notices of Action (notices) that it sent between July 2015 and June 2017 regarding proposed changes in services.”
“The findings of the state audit are very troubling. I am highly concerned that the audit determined families had their child care services unjustly terminated by the 4Cs, an action that impedes the continuity of care and education of their children,” said Senator Jim Beall, who requested the audit at the Joint Legislative Audit Committee (JLAC) hearing on June 28, 2017.
In one example, the State Auditor explained how 4Cs created a notice of possible termination on March 7, 2017 that contained a deadline of February 20, 2017 for the family to respond by. This deadline, which occurred over two weeks before the notice was even created, resulted in two children having their child care services terminated.
“I feel betrayed that Santa Clara families are suffering because of 4Cs’ disgusting misconduct,” said Valentina Renales, a 4Cs parent from San Jose. “Why should 4Cs be allowed to deny crucial care to young children and take advantage of vulnerable, hard-working families? As one of the people who initially pushed for this audit, I am hopeful that these results are the first step in finding a solution to 4Cs’ bad behavior.”
Employees at 4Cs have also suffered from the organization’s mismanagement of state funds and suspect administration of their retirement plans. There is currently a lawsuit pending against 4Cs by a group of current and former employees which alleges that 4Cs failed in its responsibility to exercise prudent judgment of how assets would be invested.
“We’d like to thank Senator Jim Beall and Assemblymember Ash Kalrafor bringing forward the request for this audit, as the audit report clearly shows that the families in Santa Clara are not being served and that our concerns are valid,” said Virgilio Gonzalez, a Family Fee Specialist at 4Cs and SEIU 521 member.“By working together as a union, 4Cs employees are the ones who first flagged these problems. Along with providers and parents, we must have a voice in finding solution to the problems discovered by this audit.”
The state audit also identified a pattern of 4Cs not paying their Child Care Providers on time for the services they’ve provided. These late payments jeopardize the ability of providers to continue offering care to Santa Clara families and can place providers in precarious financial situations.
“As a provider, being paid for all of the services I provide is crucial for me to continue working,” said Shazia Sarwat, a 4Cs Child Care Provider in San Jose.“Unfortunately, Santa Clara parents, children, and providers have suffered for years from 4Cs’ negligence and mismanagement. I am happy that I stood up and requested this audit, because 4Cs’ actions towards families and providers are shameful.”
The report concludes that the financial advisor responsible for making those questionable recommendations on employee retirement accounts received, “substantial financial commissions,” as a result. It also reveals that 4Cs improperly spent $6,859 in state grant funds to fight the efforts of their employees to form a union and speak out against the organization’s many improprieties.
4Cs has 10 days from the date they received the Notice of Proposed Action to appeal this decision with the Early Education and Support Division of the California Department of Education. According to the CDE’s Notice of Proposed Action, the state funding of 4Cs would end effective July 1, 2018.
You can read CDE’s letter and the state audit documents at: http://www.seiu521.org/4cs-state-audit/
Service Employees International Union, Local 521 represents 40,000 public- and nonprofit, private-sector workers in the California’s central Bay Area region and in the Central Valley. Under a Community First vision, we are committed to making sure the needs of our community, and the vital services we provide our community, come first. We believe our communities thrive when residents, leaders and workers recognize that we are all in this together when it comes to our safety, health, and well-being.