Carolina Journal’s Barry Smith reports on a new state audit that uncovered reprehensible, unethical actions from a child care facility operating in Transylvania and Henderson counties.

A new state audit slams a former child care provider for setting up a front company to avoid sanctions.

The report (PDF) by State Auditor Beth Wood says Where Dreams Come True, which at one time operated three day care facilities in Transylvania and Henderson counties, received $68,239 from a subsidized child care program for new enrollments after the front company was set up. The original owner would not have been entitled to the subsidies.

The provider was cited for 85 violations between June 2007 and April 2011, the report says. The violations were related to various matters, ranging from recordkeeping and direct child care issues.

Where Dreams Come True was cited in November 2010 for fraudulently misrepresenting attendance reports, resulting in a $5,280 overpayment of subsidy funds. The provider received a one-year sanction for violation. 

Any subsequent sanction would have disqualified the facility permanently from participating in the subsidy program, the report says.

The former owner closed one of the facilities and attempted to transfer ownership of them to her husband. When she learned that the transaction would not exempt the business from further sanctions, in May 2011 she transferred ownership to an employee who had been teaching at one of the centers for 10 years. The original owner planned to continue operating the centers and she raised the teacher’s hourly pay from $10.66 to $13.50 for agreeing to the arrangement, the audit says.

When audit investigators talked to the teacher who became the operator of the front company, she told them, “I don’t know what to do. I really have been used.”

After speaking with subsidy program officials about the situation, the teacher turned in her child care license and closed the two facilities.