FILE - Toys in a preschool classroom in Portland, Ore., on Dec. 13, 2023. Audit finds almost $3 million in wasteful spending due to poor oversight in Oregon’s Preschool Promise program for low-income families.
Elizabeth Miller / OPB
Problems are continuing to plague Oregon’s government-funded preschool programs.
An audit from Oregon’s Secretary of State says a lack of oversight and accountability at two state agencies led to nearly $1.4 million of wasteful spending and $1.5 million in improper payments in the state’s Preschool Promise program.
Preschool Promise is one of several early childhood programs managed by the state. The program aims to fill gaps in Oregon’s child care crisis by making preschool more accessible and affordable for low-income families and by investing more in child care providers.
Preschool Promise is different from Preschool For All, which is funded and administered by Multnomah County. Gov. Tina Kotek and legislators jousted with county leaders during the most recent legislative session over that program’s high tax collections and large account balances.
Preschool For All and Preschool Promise are both attempts to confront the rising costs of child care and early learning in Oregon. The Secretary of State’s audit released Wednesday focused only on issues surrounding Preschool Promise.
“As a dad, I know quality child care is hard to find, much less afford, which is why it’s frustrating when programs like this aren’t delivering as much as they can,” said Secretary of State Tobias Read in a press statement. “Accountability for Preschool Promise and maximizing that program is about doing right by our kids.”
The report identified $1.4 million in wasteful payments made to providers between 2021 and 2023. Child care sites that received this money were found to have chronically low enrollment or were closed for months while still collecting state preschool funding.
State auditors said these mishandled payments represent about 1% of all Preschool Promise payments made during that time period.
“These funds could have provided child care for 100 additional children instead of the approximately 13 children actually served,” wrote Secretary of State audits director Steve Bergmann in the report.
The audit also found an additional $1.5 million in improper payments made to an early learning hub in the state that did not meet a grant agreement requirement to submit timely expense reports.
Red flags fly in Preschool Promise
The Secretary of State’s office was tipped off on possible waste in the Preschool Promise program after a complaint was filed in 2024 through the Government Accountability Hotline. The tipster alleged state agencies “fraudulently paid out tens of millions of dollars to grantees” in the program and failed to hold grantees accountable, according to documents obtained by OPB.
The report found no instances of fraud in the program. But it did warn that it is ripe for fraudulent behavior due to mismanagement, vague data reporting requirements, and a lack of guardrails to prevent duplicative payments.
A spokesperson with the Department of Early Learning and Care, which currently administers the program, said the agency is committed to transparency and accountability.
“DELC takes seriously our job to steward public funds responsibly, effectively, efficiently and equitably,” said DELC Director of Communications Kate Gonsalves in an emailed statement.
Preschool Promise has been managed by two state agencies since its beginning in 2016. The Oregon Department of Education launched a pilot program and then oversaw its expansion statewide in 2020. That ramp up was rocky, with long wait lists for families and funded child care slots going unfilled, according to reporting from InvestigateWest.
State auditors focused on the period when ODE-operated Preschool Promise, which ended in 2023, when the newly created Department of Early Learning and Care took over.
Related: Inequity, mismanagement beleaguer Oregon’s early learning agency, employees say
The audit found “inadequate oversight” from both agencies but it acknowledged that DELC has made efforts to mitigate some of the early issues with the program. Auditors said the agency can still do more to help the program run more smoothly and reduce waste of public dollars.
The report included 13 recommendations for DELC to strengthen and improve oversight of the program, such as stricter monitoring of preschool sites and early learning hubs, and enforcement of standardized expense reporting.
In a written response to the audit, DELC director Alyssa Chatterjee largely agreed to the recommendations. She also noted that many of the proposed solutions have been or are currently being implemented since her agency took over the program.
Read said his office will continue to closely monitor Preschool Promise to make sure families have access to affordable child care. But changes to state-funded child care programs could come at a slower pace after state lawmakers agreed to cut millions from the DELC’s budget last month.
Correction: The original story misidentified the type of organization that received $1.5 million in “improper payments.” OPB regrets the error.
