Independent Article

Child Care Benefit: The importance of a strong system to ensure you are claiming the money owed to you

Erin Allen, Succeed Consultancy

Childcare Sales Australia is proud to publish yet another pearl of wisdom from our ever growing Childcare Affiliates Program. This article, supplied by Erin Allen of Succeed Consultancy, is sound and practical information for both owner operators, investors and new buyers alike. You can contact Erin on the numbers provided below or visit the Succeed Consultancy website for more information at

www.succeedconsultancy.com.au

Child Care Benefit: The importance of a strong system to ensure you are claiming the money owed to you

As many of you know, the Australian Government funds long day care services to provide care mostly for children not yet attending school, whose parents are working, undertaking vocational study, training or looking for work. Indirectly of course, the Government inevitably funds child care centres through the Child Care Benefit Scheme. On a quarterly basis child care centres lodge a Child Care Benefit claim to their appointed Family Assistance Office (FAO). This is achieved through either manual means or copying onto recordable mediums such as floppy, CD or data keys, or lodging electronically.

The next part of the claim process involves FAO completing the claim and cross matching their data. From this process your child care quarterly periods are reconciled. This then confirms whether or not further CCB payments are due to your service or resulting in your Service owing FAO for overpayment of your CCB. The information derived from this process is also used to factor future payments to your service.

As an operator, it is imperative to your back pocket to ensure you are claiming what you are entitled to, and claiming within relevant child care legislation. As a Consultant, I have seen too many child care centres under-claiming payments which they are entitled to, due to lax or non existent systems being in place.

It should be noted that "extra day bookings" are the most noticeable area where payments have been unclaimed.

Example: A child has two permanent days booked on a Monday and Tuesday each week. Each week the family is charged for these days as that is how it is set up in the child care program.

The mother has picked up some casual work and for the last eight weeks the family has been picking up extra days on a Wednesday, Thursday and Friday, some weeks the child has attended five days. There is no routine and mum often rings at 7.00am on the mornings she needs the extra care. A room staff member takes the information, they may or may not write the information down, but for the past eight weeks the extra days have not been entered into the computer, the mother however has signed in and out of the Child Care Centre each and every day.

The mother has been consistently upholding her legal requirements both for Facsia and Licensing, as has the Centre under Licensing. The quarter ends, there is no cross checking systems in place. At the completion of each and every quarter, the “End of Quarter” process is completed, the claim gets sent off to FAO and processed, there are no cross matching systems in place from the sign in or out sheets to the child care program.

The Centre hasn’t charged the family for all of these extra days, the family receives free care. The Centre not only misses out on the portion of Child Care Benefit for the family, but they also miss out on the “gap fee” portion from the family.

The Centre’s not full and a high portion of families participate in this great service the Centre offers, just imagine how many thousands of dollars are lost in revenue. Or the Centre does usually put in the extra days, but again the cross matching does not occur, the human error and inconsistency still misses one extra day each week and you’ve had your Centre now for five years. What does this mean for your back pocket?

The key to success is all about clear, concise and consistent systems to ensure both all of your responsibilities are upheld, and you are claiming what you are entitled to, not to mention keeping your parents happy with few to no financial errors. A system of accountability and cross referencing should occur. Check yourself and get a third party to check again. I guarantee if you do this, every checker will discover errors and every checker will discover items that would have resulted in lost revenue. Is that enough of a reason?

How bad can it get? One of my first clients as a consultant, a centre who at the time I had been externally auditing for about four weeks and was just at the fourth End of Quarter, had been open for around ten months. The owner had never been a Director before and had no assistance or training in either Child Care Benefit or the Centre Child Care Program.

At commencement of the audit the parent’s accounts were $9000.00. It was an absolute mess which meant I could not go on with the quarter I set out to start. Rather I had to spend two weeks with the owner going back to the very first day of operations, starting the booking systems from scratch and amongst the mess, sort out each and every sign in and sign out sheet from boxes, to the cupboard, to the rooms. From the beginning to end, every End of Quarter claims needed to be resubmitted as “supplementary claims”.

The parent accounts rose to a staggering $29 000.00. This was a direct result of no training, no accountability and no cross checking. Did you think we recovered all the money? Not even close. You can image how happy the parents were having paid miniscule amounts for their childcare instead of the thousands of dollars owing. All this while the centres reputation takes a bashing.

Simple strategies to keep your strong system strong

• Train your administrators to handle child care bookings and claims. A new centre is entitled to an FAO assistance staff member who will come to your centre to assist with training on legislative requirements
   
• Send your administrator to your Child Care Program provider for training. Most providers offer training in some form. Request your Child Care Program provider to come to you - you may think it too costly, but can you really afford not to have this type of knowledge at your disposal?
   
• Use diary or communication books - both in the office and in rooms, for office messages such as extra day bookings
   
• Make the FAO’s “Child Care Service Handbook” 2006-2007 your best friend. It’s your bible for optimal revenue return and to ensuring you meet your legal obligations
   
• Have the FAO telephone number for Child Care Services support at hand in the office. Facsia staff are very knowledgeable and are always happy to assist in answering queries of every shape and size
   
• Have your Child Care Program provider support number at hand in the office. You will find the staff very knowledgeable and always happy to assist in answering any queries
   
• Make sure your data entry is completed on a daily basis, e.g. entering absences daily, your child care benefit statements as you receive them.
  
  Another issue I often encounter is that absences are completed ad hoc. Some days their done and at other times weeks pass, or they simply not done until the end of quarter. The question is do you feel confident you could remember if a child attended on any given day in that quarter, or did the family forget to sign in or out that day.
  
  I frequently hear the excuse “I don’t have time”. Well, get into a good routine and implement a system.
  
  The same applies the Child Care Benefit statements - three quarters are already piled up and the fourth one arrives. How impressed are your families going to be when they find they have a huge debt owing?
   
• Every quarter cross reference the paper copies of sign-in and sign-out sheets and child care benefit statements to your Child Care Program, signing off that it’s been completed prior to lodging your claim. Yes it can take some time but is well worth it to ensure minimal errors, not to mention time taken in the future to fix any problems
   
• Have a third party complete the same procedures as above. A new set of eyes will ensure errors are picked up and or reinforce the good practice of your child care benefit administrator
   
• Keep your records in quarters and archive them chronologically and in alphabetical order on a quarterly basis. If you receive a spot audit from Facsia all the information will be clear and easily assessable

For Spot Checks with Facsia you will need to produce:

• Statement of Child Care Usage Forms
• Child Care Benefit Statement for Payment Summaries
• Attendance Records
• Documentary evidence to support Special Child Care Benefit
• Copies of Receipts for fees paid by parents
• Supporting documentation for approved absences
• Waiting Lists
• Enrolment Forms
• Service Insurance Records
• NCAC receipt of registrationState or Territory License

This list is not exhaustive, Facsia may request further information at the time of their visit.

Source: Succeed Consultancy and FACSCIA www.facsia.gov.au

www.succeedconsultancy.com.au