EXCLUSIVE: Ohio daycare center owner says allegations of widespread fraud are ‘insulting’

A longtime Ohio daycare center owner says allegations of widespread fraud in the child care industry are “insulting,” arguing that constant state oversight and detailed recordkeeping make it extremely difficult for operators to falsify information without being quickly caught.

Andy Hoffman, owner of Academy of Young Minds in Wadsworth, Ohio, said the narrative that daycare providers can easily manipulate the system ignores the daily reality of running a licensed center in Ohio.

“To me, it’s insulting,” he said. “With the amount of oversight that I experience on a given day, it’s basically a slap in the face of the entire industry.”

Hoffman has operated child care centers in Wadsworth for more than two decades, with the first center opening in 2003.

“Shortly thereafter, we acquired a center from Wadsworth-Rittman Hospital, ran that for about 10 years, shut that down, and built another center in Wadsworth. So, currently, we’ve been operating two centers in Wadsworth for about 23 years,” he said, adding that, as of today, the two locations serve “probably about 200” children.

Hoffman said Ohio’s inspection process is far more rigorous than critics suggest.

“The most basic form of inspection is your annual or biannual inspection,” he said. “They come in, they go over all your files, they look at all your classrooms, they look at your incident reports — they basically go over your entire operation. It usually takes about an entire day.”

Those scheduled visits are only part of the oversight, Hoffman said, adding that the majority of daycare inspections are “impromptu” and that under Ohio policy, “the state is mandated to inspect and investigate every single claim,” regardless of who files it.

“You go into work that day, and you have no idea, and then boom, your agent’s at your front door, and it’s go time,” he said.
Hoffman said that inspectors do not rely only on management’s explanations.

“They’re throughout the building. They’re in every single classroom,” he said. “They’re talking directly with staff. They want to know from the staff’s mouth what’s going on.”

Hoffman said inspectors deliberately look for issues in a daycare center, even when everything appears fine, recalling a licensing agent telling his wife, “This is one of the best inspections I’ve ever done.” However, if I don’t catch anything, it looks like I’m not doing my job right.’ Nobody gets a perfect inspection.”

Recent developments have resulted in Hoffman’s centers being selected for a random audit and asked to submit months of attendance records.

“My director had to take several hours out of her day to gather all of her attendance for the previous four months,” he said. “For what I’m guessing is just to confirm that we have a legitimate business and legitimate clientele.”

He emphasized that attendance records are only one layer of documentation.

“You can’t have a kid in your computer system who’s being invoiced without a folder,” Hoffman said. “Every child needs to have a folder full of paperwork — parent information, signed contracts, everything.”

Hoffman also noted that the COVID-19 pandemic negatively affected the company’s finances.

“We had to take one of our centers and completely shut it down for six months,” he said. “We lost a lot of great staff that we had had for years.”

He added, “I’d be lying to you if I said we’re back where we were in 2019.”

“We’re not afraid of regulations,” he said. “Parents welcome the regulations. They want oversight. They don’t want people just inventing their own rules when it comes to taking care of kids.”

Hoffman said that it would be impossible to funnel money illegally through a daycare.

“My accountants would bust me before anybody,” he said. “I can’t serve a single meal or enroll a child for a single day without paperwork. With the amount of oversight that exists, I don’t see how it’s possible without a blind eye being turned somewhere.”

Hoffman said the real cost of fraud allegations would ultimately fall on families and providers who are already struggling.

“Look at parents,” he said. “Look at how hard it is just to afford child care in this economy. All this money that could be helping families — if it keeps leaking out, you could break the entire industry.”

The news came after $20 million in fraud was purportedly identified in Ohio. To combat fraud, Ohio officials sought to make it easier for state residents to report fraud and to launch “integrity reviews” of publicly funded daycare centers.

During a press conference this week, Republican Gov. Mike DeWine defended Ohio’s daycare centers, criticizing people who chose to conduct their own investigations into the alleged Somali daycare fraud in the Buckeye State.