Washington State Auditor finds MILLIONS in overpayments by agency responsible for daycare oversight: report

As independent journalists and citizen watchdogs continue raising alarms about possible “Minnesota-style” daycare fraud in Washington, the State Auditor’s Office is now finalizing an audit of a $770 million child care subsidy program run by the Department of Children, Youth and Families (DCYF), an audit that began before the recent fraud allegations went viral, that reportedly shows millions of dollars in overpayments.

According to KOMO News, the audit includes payments to more than 7,400 child care providers statewide, offering the most comprehensive look yet at how subsidy funds have been distributed and tracked.

DCYF provided the outlet a link to records showing 1,372 overpayments totaling $2,092,513 between July 1, 2024, and June 30, 2025. The report attributes many of those overpayments to missing attendance records and overbilled hours or days. 265 overpayments were tied to a lack of attendance records, and roughly 21 percent were linked to overbilled hours or days, highlighting recurring weaknesses in documentation and verification.

The Office of Fraud and Accountability (OFA) reported that in fiscal year 2025, its efforts resulted in one criminal conviction of consumers and zero providers for child care fraud, with restitution set at $20,474. In cases that don’t meet the threshold for prosecution, OFA said it writes overpayments on DCYF’s behalf and submits them for recovery.

Former State Auditor Brian Sonntag told KOMO News that growing public concern demands transparency and accountability, especially in fast-moving social programs where agencies may be under pressure to “get money out the door.” He emphasized that agencies must be able to demonstrate controls that protect taxpayer funds.

The audit news arrives as independent journalists have identified multiple alleged “ghost daycares,” licensed providers listed on state records that appeared inactive or nonexistent when visited. They also claimed certain daycare listing data on DCYF’s website changed during their investigation, with fields like capacity and available slots disappearing or showing zero.

DCYF has publicly stated it conducts fraud prevention measures, including annual unannounced visits and random audits, noting its Quality Assurance unit completed about 1,440 audits of provider payments in 2024.

While the audit raises clear questions about controls and documentation, Washington Attorney General Nick Brown told KOMO News this week he was not aware of any documented fraud yet, dismissed the allegations, and called independent journalists investigating the claims “vigilantes” and racist,” accusing them of “harassment.” He also falsely claimed allegations of fraud had been "debunked," blaming President Donald Trump and Elon Musk for the claims.

In an interview with KOMO News, Seattle Socialist Mayor Katie Wilson refused to investigate or even acknowledge the possibility of fraud and also demonized the journalists. She previously called them "extremist influencers."

During Congressional hearings on the Minnesota fraud, Rep Emily Randall (D-WA) said taxpayers should ignore the data alleging fraud and instead focus on investigating US citizens, especially “white men.”