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NYC owes child care providers millions in reimbursements

New York City owes early childhood education programs millions of dollars in reimbursements from last school year — a delay putting thousands of families “at grave risk” of losing services, advocates warn.

More than 126,000 kids under 5 rely on city-contracted early childhood programs or use vouchers for subsidized care.

But directors who contract with the Department of Education charge they’ve repeatedly missed payroll — or had to take out personal loans or credit lines — while waiting for payments.

Others report they’ve been pushed to the brink of shuttering their centers, the directors told The Post in interviews over the last two months.

“Without immediate action, the city’s child care plan will not only be left unrealized,” read a joint statement Thursday from a coalition of seven nonprofits and membership organizations.

“More importantly, the early care and education sector — its workforce and the children and families that depend upon it — will be irreparably harmed,” the advocates said.

A survey by the Day Care Council of New York — one of the providers who signed the statement — showed 41.5% of respondents have delayed paying their employees or vendors because of late DOE reimbursements. The organization represents a few hundred of the approximately 1,400 early childhood programs that contract with the city.

Kids in a classroom
More than 126,000 kids under 5 rely on city-contracted early childhood programs or use vouchers for subsidized care.
Getty Images

A rep for the Day Care Council, Gregory Brender, said providers he represents have taken out personal loans up to $200,000 — and have been owed as much as $4 million from the city for multiple sites.

The call-to-action was also signed by the Citizens’ Committee for Children of New York, The Committee for Hispanic Children and Families, FPWA, Human Services Council, United Neighborhood Houses and UJA Federation of New York.

“The point we’re at, the discussion is are we going to close some of these sites,” said Elizabeth McCarthy, the CEO of Sheltering Arms, a social services organization that operates six early childhood education programs in the Bronx, Manhattan and Queens.

Kids in a classroom
The DOE placed some blame on the administration of former Mayor Bill de Blasio — but things aren’t any better after roughly nine months under a new mayor and schools chancellor.
Getty Images/Tetra images RF

Sheltering Arms is owed close to $2 million in reimbursements from last year. Each location has its own contract with the DOE, and one site has not been paid since October, according to McCarthy.

“We just don’t think we can continue,” she said.

The money crunch comes as child care programs are “closing their doors in record numbers,” according to the latest Mayor’s Management Report — including 400 providers that shut down for good during the first year of the pandemic.

“They [the DOE] just don’t give us the money they’re supposed to give us on time,” said Rosa Gillette, a director at Lexington Children’s Center in East Harlem, which missed payroll twice. “And who’s suffering? The children, the staff.” 

Gillette, who trimmed back her own hours to make ends meet, told The Post she plans to retire.

“As the director — to run a school in that way — I got tired of it. I got tired of the struggle of never having enough money,” she said.

The DOE placed some blame on the administration of former Mayor Bill de Blasio — but things aren’t any better after roughly nine months under a new mayor and schools chancellor.

DOE spokesperson Suzan Sumer said last month the agency “inherited flawed systems that were implemented with Universal Pre-K that require updating — an ongoing focus of this administration.”

The DOE also attributed payment backlogs to enrollment declines, adding some providers were facing challenges with the contract process itself.

Child care advocates also are warning of more financial pain ahead.

An anonymous complaint Wednesday to state Education Commissioner Betty Rosa from inside the DOE alleged the city is violating state regulations for early childhood programs — and is in danger of losing hundreds of millions of dollars. 

The whistleblowers warn if the DOE fails to comply with the regulations — from supports for kids learning English or with disabilities to professional development — it could jeopardize more than $253 million in state funding for pre-K.

Multiple teams within the agency’s Division of Early Childhood Education have been dismantled in recent months, the employees alleged — including those focused on meeting kids’ needs.

Roughly 400 early childhood instructional coordinators and social workers have also been slashed from their positions, the complaint read — a move the DOE argued will bring those supports closer to schools, but which staffers say will cut services to teachers and kids. The move has also sown confusion since the “excessed” workers have to reapply for jobs.

“It’s a free-for-all,” one of those staffers told The Post. “I’ve worked under three different mayors, three different administrations. I have never seen anything done this unprofessionally.”

“We are also an extra pair to make sure that things are running smoothly,” the staffer added. “So to remove us from that strikes me as very scary, and I would be very afraid that my child was in a program with no other oversight.”

Nathaniel Styer, another DOE spokesperson, said the state’s most recent audit found the agency in compliance.

“The work in all of the areas mentioned in this letter continues, and our reorganization is focused on enhancing and improving each of these services,” Styer added.

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