Audit: NC child care center visits too predictable

A performance audit of the North Carolina Department of Health and Human Services’ (NCDHHS) Division of Child Development and Early Education (DCDEE) found concerns with the way compliance visits were conducted at 4,112 child care centers across the state.

In 2025, North Carolina had more than 5,100 licensed child care facilities serving more than 213,000 children at a direct cost of more than $2 billion.

Compliance visits include program operations, staff qualifications, children’s records, and facility conditions.

The North Carolina Office of the State Auditor (NCOSA) said in the audit released on Thursday that even though all child care centers had a compliance visit, many visits followed repeat scheduling patterns that were inconsistent with the intent of division policy.

State law requires the division to conduct at least one unannounced compliance visit at every licensed child care center each year. Division policy also requires scheduling practices intended to prevent visits from occurring at the same time each year. Specifically, the division’s consultant procedures manual states that “intentional planning is necessary to ensure visits are not made the same time each year.”

Auditors said the repeat scheduling patterns made annual compliance visits more predictable from year to year, which reduces the effectiveness of unannounced monitoring. Unannounced visits are intended to capture typical operating conditions.

When the timing of visits is predictable, auditors said it reduces the likelihood that those completing the visit will observe typical conditions and weakens the oversight value of the division’s monitoring activities, particularly for cited violations involving food storage and handling, storage of medications and hazardous products, sanitation, and smokefree facility requirements.

FINDINGS

Auditors reviewed annual compliance visit data for all 4,112 licensed child care centers for FY 24 and FY 25, noting that the visits were generally conducted within 364 days during FY 25. They also tested a sample of 68 of the 303 administrative actions issued during FY 25 and found that the division verified implementation of corrective actions for noncompliance identified during annual compliance visits. But, they also identified recurring scheduling patterns when comparing FY 25 to the previous year’s visit dates for the annual compliance visits.

Specifically, 197 visits (4.6%) occurred on the same weekday within the same calendar week as the prior year’s visit; 667 visits (16.2%) occurred within the same calendar week as the prior year’s visit; 68 of the state’s 100 counties showed some degree of repeat pattern. In 21 of those counties, 25% or more of visits followed repeat scheduling patterns and were concentrated in a small number of counties including: Union County – 80%; Montgomery County – 75%; Richmond County – 70%; Stanly County – 70%, and Anson County – 69%.

RECOMMENDATIONS

Auditors recommended clarifying the current policy to make annual compliance visits less predictable, including those occurring in the same week or on the same day of the week as the prior year.

They also suggested implementing monitoring of scheduling patterns by establishing a documented monitoring process to identify repeat timing patterns in annual compliance visits before consultant schedules are finalized to ensure scheduling practices align with the intent of division policy.

Third, monitor repeat scheduling patterns at the caseload and county level by tracking repeat-timing metrics across multiple years at the caseload and county levels and incorporate the metrics into routine management reporting.

Lastly, assign management accountability by designating explicit responsibility within division management for reviewing scheduling trends and ensuring alignment with the policy’s intent.

Auditors also identified two other issues while conducting the audit.

Star Rated License Assessments Have Not Been Routinely Conducted for Years

The division hasn’t consistently conducted full Star Rated License Reassessments. As a result, many child care centers continue to display star ratings that are based on assessments conducted several years ago and may not reflect current program quality or enhanced standards.

The ratings are intended to signal whether a child care center continues to meet enhanced quality standards beyond minimum health and safety requirements. Under state law, the division must reassess each child care center’s star rating at least once every three years to determine whether it continues to meet enhanced standards, such as lower staff-to-child ratios and higher staff qualifications.

Auditors say assessments were paused in March 2020 due to the COVID-19 State of Emergency declaration. In 2021, state law extended the pause for certain child care facilities suffering staff shortages that could affect their star rating through June 30, 2024. State law paused most reassessments again in 2024 for revisions to the rating system and remained in effect until July 1, 2025.

Between March 2020 and July 2025, Star Rated License Assessments were generally conducted only for new child care centers or upon request of an existing center. Because Star Rated License Assessments were only required every three years, there are centers that have not been re-assessed since at least 2017.

Parents can check the division’s most recent star rating visit by navigating to the division’s child care center search site, search for the child care center by entering the license number, name, city, or county, open the child care center profile, and scroll to the license information section

Parental Notification of Violations

Auditors also found circumstances in which delays in administrative actions following serious violations, as well as delays in notification when lead hazards were identified, may have limited parents’ ability to receive prompt information. Delayed notification reduces parents’ awareness of potential risks and limits their ability to take timely protective actions.

The division disagreed with the findings and recommendations of the audit.

Specifically, DCDEE does not agree with the finding that there were repeat scheduling patterns that reduced the unpredictability of annual compliance visits. They say its scheduling practices align with both the intent and practical application of the current policy and do not diminish the effectiveness of annual compliance monitoring. They do, however, agree that their policies can be clarified to make interpretation more straightforward, and will monitor scheduling practices to ensure the practical application of their policy matches its intent.

Furthermore, DCDEE has consistently interpreted “same day” to mean the same calendar date (example, May 13), not the same day of the week (example, Monday).

Auditors say the statements are misleading because the division’s interpretation of “same day” to mean the same calendar date is in contradiction with their own intent to encourage “visit times that vary from year to year,” as stated in its response, and the scheduling policy already precludes visits on the same calendar date, because a visit on the same calendar date would occur 366 days after the previous year’s visit.

On the subject of a pause of Star Rated License Assessments, DCDEE said the state legislature extended this pause while a new Quality Rating and Improvement System (QRIS) was developed. Hold Harmless provisions in Session Laws 2021-127, 2023-40, and 2024-34 allowed facilities to retain their existing ratings during this period. During the pause in star-rated assessments, DCDEE continued its core oversight work.

Auditors argued that even though required annual compliance visits were generally conducted within 364 days during FY 25, parents rely on the star rated system to choose the best care option for their family, and should be made aware that existing star ratings may not reflect current conditions of the child care center.

Finally, DCDEE said regarding delayed parental notifications of violations, under Child Care Rule 10A NCAC 09 .2201(i)(1-4) the responsibility for notifying parents lies with the child care facility operator and that current rules do not require DCDEE to provide direct notification to parents of violations or administrative actions. While the division’s reference to the child care rule is accurate, NCOSA included this matter in the report because parents may not be aware that responsibility for notification rests primarily with the child care facility operator.

“Audit: NC child care center visits too predictable” was originally published on www.carolinajournal.com.