Audit Report On The Department Of Health And Mental Hygiene’s Permitting Of Child Care Centers

Executive Summary

The objective of this audit was to determine whether the New York City (the City) Department of Health and Mental Hygiene (DOHMH) maintained adequate controls to ensure that center-based Group Child/Day Care (GDC) providers that are granted permits to operate in the City have fulfilled applicable regulatory requirements. DOHMH’s Bureau of Child Care (BCC) is responsible for overseeing and monitoring approximately 2,300 GDCs that are subject to Article 47 of Title 24 of the New York City Rules of the City of New York (RCNY) (the City Health Code) and the focus of this audit. A GDC is a center-based program that provides childcare to three or more children under age 6 for five or more hours per week and more than 30 days in a 12-month period. GDCs are City-regulated, under the direct jurisdiction of DOHMH. BCC processes initial and renewal GDC permit applications, inspects GDC facilities, reviews program staffing and operations, investigates complaints, and monitors providers’ compliance.

To operate, a GDC must obtain a permit from DOHMH, which is renewed every two years. To obtain an initial or renewal permit a GDC must submit an application to DOHMH along with all required documentation (e.g., a valid certificate of occupancy, written safety plan, proof of workers’ compensation and disability benefits insurance). In addition, the GDC must submit information about supervision and staffing at the facility. According to Article 47 of the City Health Code, a GDC is also required to undergo a water lead test. However, the regulation does not include the test results as one of the required documents to be submitted to DOHMH in order to obtain a permit. The provider must retain certain information on site so that it is available to DOHMH inspectors at the time of an inspection, such as staff qualifications, training, and the results of criminal background checks, along with information about the children such as their immunization records and emergency contact information.

Each GDC location is required to undergo at least one inspection annually. However, BCC frequently conducts two inspections, one related to the GDC’s physical premises, including sanitary facilities, storage areas, lighting, fire and electrical safety, and one related to its program operations, including staffing levels and qualifications, educational programs, health screening of staff and children, and other topics, to assess compliance with Article 47 of the City Health Code.

BCC uses the Child Care Activity Tracking System (CCATS) to track and record all related events (e.g. documentation submissions, inspections, complaints) for GDCs throughout the permit process. CCATS serves as a data warehouse where all GDC program information, inspection results, and scanned document images are maintained. All DOHMH requirements for a GDC to obtain a permit are programmed into CCATS in an effort to ensure that permits are only issued where all the requirements for issuance have been met.

Audit Findings and Conclusion

During the period under review, DOHMH generally maintained adequate controls over its permit process to provide reasonable assurance that GDCs submitted all documents as required by law to DOHMH before being granted permits to operate. However, at the same time, we found weaknesses in DOHMH’s permitting process that raised health and safety concerns. Specifically, DOHMH did not ensure that all of the GDCs had tested the water at their facilities for lead as required by Article 47 of the City Health Code. To carry out Article 47’s requirement that every GDC test its water for lead, DOHMH designed its CCATS system to only issue permits to GDCs that had submitted proof that they tested the water in their facilities for lead. Yet, our audit found that BCC management overrode its own requirement and instructed staff to enter into the CCATS database a statement that a report of a water lead test with acceptable results had been received in cases where no such test had been performed, or where there was no evidence that an acceptable result had been reported.

We found that for more than half of the 119 GDCs in our sample, CCATS indicated that reports showing acceptable water tests for lead had been provided, but no evidence of these reports were found in the files. In addition, we found that although BCC had protocols for its CCATS permit process, BCC lacked a comprehensive set of policies and procedure covering all aspects of its oversight and monitoring of GDC providers and BCC lacked sufficient supervisory oversight of its field inspection staff.

Audit Recommendations

To address these issues, the audit makes eight recommendations, including the following:

• DOHMH BCC should ensure that no GDC is issued a permit, either new or renewal, without submitting a report evidencing the completion of a water lead test in compliance with Article 47 of the City Health Code.
• DOHMH BCC should follow up on the 70 GDCs cited in this report for not having conducted a water lead test and ensure that a test is performed as soon as is feasibly possible.
• DOHMH BCC should review its records and determine whether other GDCs in addition to the 70 identified through our sample have an entry in CCATS that reflects that a negative lead test was received when it had not been and ensure that a test is performed as soon as is feasibly possible.
• DOHMH BCC should develop a comprehensive policies and procedures manual that addresses all internal processes and functions carried out by BCC with regard to monitoring compliance of GDCs and distribute the manual to appropriate personnel.

Agency Response

DOHMH agreed with six of the audit’s recommendations and disagreed with two—one that recommends that DOHMH require the completion of a water lead test before a new or renewal permit is issued, and a second that recommends that DOHMH ensure that sufficient control activities are put in place to mitigate its risk exposure to fraudulent and/or corrupt activities.