By Kendall Black, The Portland Medium
Auditors with the Oregon Secretary of State have identified $1.4 million in potentially wasteful payments in the state’s Preschool Promise program, prompting calls for stronger oversight and tighter financial controls. Secretary of State Tobias Read announced the findings Tuesday, saying the audit followed a complaint to the Government Accountability Hotline alleging waste and fraud within the program.
“As a dad, I know quality child care is hard to find, much less afford, which is why it’s frustrating when programs like this aren’t delivering as much as they can,” Read said. “Accountability for Preschool Promise and maximizing that program is about doing right by our kids. Oregonians are depending on us to step up and take action.”
The findings come after years of rapid growth for Preschool Promise. Launched as a pilot in 2016, it became a statewide program in 2020 and expanded further under the 2019 Student Success Act. The Department of Early Learning and Care (DELC) now administers 234 grants reserving preschool slots for up to 5,344 children, primarily from families earning at or below 200% of the federal poverty level.
Auditors did not confirm fraud but substantiated allegations of waste and identified areas where DELC lacked sufficient oversight to prevent improper payments. Preschool Promise, created to expand access to high-quality preschool statewide, provides funding to child care providers who reserve slots for eligible children.
The review examined fiscal years 2021 through 2024, covering the program’s administration first under the Oregon Department of Education’s Early Learning Division and then DELC, which assumed oversight in 2023. Auditors found $1.4 million in payments they deemed wasteful—about 1% of total program funds—citing mismanagement and inadequate monitoring.
Among the findings, nearly $700,000 was paid to providers with chronically low enrollment despite requirements to maintain minimum levels. In one case, a provider awarded funding for 36 preschool slots enrolled just one child, then received additional funds the following year while serving only two children. Auditors also reported $154,700 awarded to sites for months when they were not operating and more than $500,000 granted for program expansions despite low existing enrollment.
The audit concluded those funds could have supported child care for 100 additional children rather than the 13 served in those cases. It also found $1.5 million in improper payments tied to a provider hub that repeatedly submitted late expense reports, limiting the state’s ability to provide timely oversight.
Auditors said DELC’s reliance on self-reported data from providers and lack of child-level data created risks of inaccurate reporting and duplicative payments across overlapping programs such as Preschool Promise, Employment Related Daycare, and Multnomah County’s Preschool for All.
“Our findings underscore that while DELC has made progress since taking over the program, further steps are needed to prevent waste and strengthen accountability,” the report said.
The audit issued 13 recommendations, including developing policies to monitor under-enrolled sites, enforcing standardized financial reporting, implementing data analytics to flag risk, and collecting child-level data to verify enrollment. Auditors also urged DELC to strengthen oversight of Early Learning Hubs and formalize guidelines for decisions that override committee recommendations.
Read said his office will monitor DELC’s progress on the recommendations. “My team and I will closely follow progress on these recommendations because Preschool Promise can and must do more for Oregon families,” he said.
In a written response, DELC Executive Director Alyssa Chatterjee said the agency agreed with most recommendations and has already implemented some changes.
“Since becoming an independent agency, DELC has implemented stronger controls, built dedicated procurement capacity, and launched improvements that directly address the issues raised,” Chatterjee wrote.
She said staffing shortages have limited oversight but outlined plans to expand monitoring under DELC’s strategic plan, Growing Oregon Together. The agency is developing enhanced monitoring protocols slated for adoption by December 2025 and full implementation by June 2026.
Chatterjee also said braiding multiple funding sources is a “nationally recognized best practice” that helps expand preschool access but acknowledged that stronger data systems are needed to track how funds are used.
While auditors described the $1.4 million in waste as a small portion of total program spending, they stressed that it represented meaningful resources. “These funds could have provided child care for 100 additional children,” the report said.
The audit concluded that DELC has made progress since assuming oversight in 2023 but must continue reforms to strengthen accountability and protect public funds.
“The success of Preschool Promise is critical,” the report said. “Oregon families are depending on this program to deliver high-quality preschool options, and it must be administered with the highest standards of accountability.”
