Maryland errors cost taxpayers $10.7M in childcare overpayments, state won’t recoup funds

COLUMBIA, Md. (WBFF) — Maryland officials have confirmed to FOX45 News childcare providers statewide received millions of your taxpayer dollars due to an error. But the State Department of Education decided not to recoup the money.

Now, one state senator is questioning whether that decision was legal – while state education leaders defend the decision.

Dr. Joshua Michael and Dr. Carey Wright interviewed with Project Baltimore to send a clear message regarding Maryland’s Child Care Scholarship Program (WBFF)

“You’ve raised important questions and the public deserves to hear answers,” Dr. Joshua Micheal, President of the Maryland State Board of Education told Project Baltimore.

“Absolutely,” agreed Dr. Carey Wright, the Maryland State Superintendent of Schools.

Michael and Wright interviewed with Project Baltimore to send a clear message regarding Maryland’s Child Care Scholarship Program.

“You can’t solve the problem by ignoring it,” said Wright.

“It sounded like a big problem,” Project Baltimore’s Chris Papst replied.

“Yeah. This is a big problem. It is. And taxpayers should be concerned,” Michael said.

ALSO READ | ‘Free money”, audits show Maryland overpaid childcare providers $66.5M, money not recouped

Maryland’s Child Care Scholarship Program offers cash assistance to families of income-eligible children younger than 13, or children under 19 with a qualifying disability. Over the past five years, the program’s funding has soared: growing from $132M in 2022 to $560M in 2026.

Project Baltimore, last week, first reported on an internal email from the Mayland State Department of Education, where internal audits, that were not made public until FOX45 News obtained them, found $66.5 million in suspected overpayments were sent to childcare providers from 2023 to 2025.

Now, Project Baltimore is learning more about what happened to the money.

Project Baltimore first reported on an internal email from the Maryland State Department of Education, where internal audits, that were not made public until Fox45 obtained them, found $66.5 million in suspected overpayments were sent to childcare providers from 2023 to 202 (WBFF)

The state explained to FOX45 News in an email that $10.7 million was paid out to childcare providers as a result of “implementation errors made by former MSDE leadership and staff.” In other words, according to MSDE, the state had an error under former Superintendent of Schools Muhammad Choudhury and paid out tax dollars it should not have.

According to internal MSDE emails obtained by Project Baltimore, 2,227 childcare providers statewide received an average overpayment of $4,479. One childcare provider received $132,661 in overpayments. MSDE decided not to recoup the $10.7 million. The childcare providers kept the money.

“This was completely the fault of the agency under previous leadership,” Michael stated. “We refused to correct this two years later on the backs of small business childcare providers. We didn’t think that was the right or the fair thing to do.”

“But was it the legal thing to do? Can you just walk away from $10.7 million in taxpayer money and give it to companies?” Papst questioned.

“Like Josh said to you, when the program was first established, it did not have the proper function,” Wright said.

The state explained to Fox45 in an email that $10.7 million was paid out to childcare providers as a result of “implementation errors made by former MSDE leadership and staff.” (WBFF)

Following Project Baltimore’s reporting on this topic, State Senator J.B. Jennings, who represents Harford and Baltimore Counties, sent a letter to the Maryland Attorney General’s Office questioning the legality of forgiving overpayments. Jennings wrote if childcare payments “exceeded the amounts providers were legally entitled to receive,” can MSDE “waive recovery?” And, “What legal authority permits the State to forgive them rather than pursue repayment?”

ALSO READ | Student violence and ‘negative perception’ shape Baltimore County School Board races

Jennings added, “These decisions raise significant questions about fiscal accountability, consistent treatment of providers, and the State’s responsibility to safeguard taxpayer dollars.”

The Attorney General’s office has yet to issue a response.

“The root cause here is an agency error stemming two years before we applied common sense,” stated Michael. “We were not going to stand for destabilizing the childcare industry by clawing back $11 million.”

“But those are taxpayer dollars,” replied Papst. “They’re the taxpayers’ money, not the childcare providers’ money.”

“Let’s be clear. We’re talking about small businesses that pay taxes. We’re talking about tax paying citizens that are working who are participating in Child Care Scholarship,” retorted Michael. “We were not going to sit idly and be in a position where collecting money back two years later would disrupt the childcare industry.”

When the Attorney General’s office responds to Senator Jennings’ letter, FOX45 News will provide an update.

Follow Project Baltimore’s Chris Papst on X and Facebook. Send news tips to cjpapst@sbgtv.com