Report Claims 4Cs “Disadvantaged Some Families and Misused State Funds”
San Jose, Calif. – California State Auditor Elaine M. Howle released a report on April 5, 2018, detailing questionable and unfair practices by the Community Child Care Council of Santa Clara County (4Cs).
4Cs is the largest non-profit agency that serves as a link between families and child care providers in the County of Santa Clara. For thousands of working families, all roads to affordable child care lead through 4Cs.
The results of the audit reinforce what 4Cs employees, Child Care Providers, and parents have been saying for years, including how 4Cs:
- Unfairly disrupted and terminated services to some families;
- Terminated a preschool program to seemingly avoid further scrutiny;
- Misused state funds;
- Paid providers late, creating unnecessary financial hardship for them;
- Engaged in questionable management of its employee retirement plans.
The state audit outlines 4Cs’ pattern of inaccurately backdating their Notice of Action forms to families, which allowed them to avoid paying potential penalties for giving parents inadequate time to respond. This practice of backdating Notice of Action forms also created deadlines that the State Auditor called “unreasonable,” and which led to “to certain families having their childcare services terminated unjustly.”
“The findings of the state audit are very troubling. I am highly concerned that the audit determined families had their child care services unjustly terminated by the 4Cs, an action that impedes the continuity of care and education of their children,” said Senator Jim Beall, who requested the audit at the Joint Legislative Audit Committee (JLAC) hearing on June 28, 2017.
In one example, the State Auditor explained how 4Cs created a notice of possible termination on March 7, 2017 that contained a deadline of February 20, 2017 for the family to respond by. This deadline, which occurred over two weeks before the notice was even created, resulted in two children having their child care services terminated.
“I feel betrayed that Santa Clara families are suffering because of 4C’s disgusting misconduct,” said Valentina Renales, a 4Cs parent from San Jose. “Why should 4Cs be allowed to deny crucial care to young children and take advantage of vulnerable, hard-working families? As one of the people who initially pushed for this audit, I am hopeful that these results are the first step in finding a solution to 4C’s bad behavior.”
Employees at 4Cs have also suffered from the organization’s mismanagement of state funds and suspect administration of their retirement plans. There is currently a lawsuit pending against 4Cs by a group of current and former employees which alleges that 4Cs failed in its responsibility to exercise prudent judgment of how assets would be invested.
“We’d like to thank Senator Jim Beall and Assemblymember Ash Kalra for bringing forward the request for this audit, as the audit report clearly shows that the families in Santa Clara are not being served and that our concerns are valid,” said Virgilio Gonzalez, a Family Fee Specialist at 4Cs and SEIU 521 member. “By working together as a union, 4Cs employees are the ones who first flagged these problems. Along with providers and parents, we must have a voice in finding solution to the problems unearthed by this audit.”
The state audit also identified a pattern of 4Cs not paying their Child Care Providers on time for the services they’ve provided. In some instances, delivery of late payments extended as far as 16 days. These late payments jeopardize the ability of providers to continue offering care to Santa Clara families.
“As a provider, being paid for all of the services I provide is crucial for me to continue working,” said Shazia Sarwat, a 4Cs Child Care Provider in San Jose. “Unfortunately, Santa Clara parents, children, and providers have suffered for years from 4C’s negligence and mismanagement. I am happy that I stood up and requested this audit, because 4C’s actions towards families and providers are shameful.”
The report concludes that the financial advisor responsible for making those questionable recommendations on employee retirement accounts received, “substantial financial commissions,” as a result. It also reveals that 4Cs improperly spent $6,859 in state grant funds to fight the efforts of their employees to form a union and speak out against the organization’s many improprieties.
The report can be seen at www.auditor.ca.gov/pdfs/reports/2017-116.pdf.
Service Employees International Union, Local 521 represents 40,000 public- and nonprofit, private-sector workers in the California’s central Bay Area region and in the Central Valley. Under a Community First vision, we are committed to making sure the needs of our community, and the vital services we provide our community, come first. We believe our communities thrive when residents, leaders and workers recognize that we are all in this together when it comes to our safety, health, and well-being.