Andrew Henson of the Raleigh-based Civitas Institute has been doing great work exposing government waste in the field of childcare in North Carolina.  In his first piece on the subject published in January, Henson wrote about how Child Care Services Association (CCSA) abruptly dropped 250 children who had been supported by Smart Start Scholarship, a program for government subsidized childcare.  CCSA claimed that these actions were a result of state budget cuts.  However, Henson claims that the real culprit is massive mismanagement of taxpayer funds by CCSA:

CCSA’s budget numbers reveal an exorbitant amount of spending leading up to the mid-year budget cuts. While CCSA was budgeted $3.4 million for fiscal year 2010-11, which spans from July 1 to June 30, a report showed that 6 months into the fiscal year they had already spent over two thirds of their budget, spending at a pace that would have overspent their total budgeted amount by $1.2 million by the end of the year. Serious questions remain as to how such a gross structural deficit could have gone unnoticed or unreported.

Needless to say, CCSA was not happy with Henson's expose.  In response, the agency stated that “CCSA has consistently been awarded a clean bill of financial health," and claimed that Henson “used aggressive, inappropriate and threatening tactics to bully CCSA” to supply him with information.

Henson responded Feb. 17, using CCSA's own words against them:

“We could have terminated scholarships for half of the families in July [the beginning of the fiscal year when the budget was set], or we could try to cut costs, work to find families other sources of funding, see if new funds became available and wait until mid-year,” Sue Russell, President of CCSA, told the News & Observer.

In other words, when CCSA crafted their budget for fiscal year 2009-10, they knew precisely how much funding they had available to finance the Smart Start scholarships they administer. Instead of awarding a number of scholarships appropriate to their budgeted funds available, they decided to proceed in a risky hope that a number of children would drop out of the program or they would find some additional funds later in the year from some unanticipated revenue sources.  Their irresponsible decisions caused an unfortunate crisis that severely impacted many in the Durham County community. In doing so they gambled with the livelihood of children and daycare providers.

Read the rest of Henson's response to CCSA here.