MARYLAND (WBFF) — Project Baltimore has obtained documents showing the Maryland State Department of Education received $44 million to develop an updated computer system to better monitor tax dollars. But the system was never implemented.
This development comes after FOX45 News confirmed that MSDE paid out millions of tax dollars to childcare providers as a result of errors.
“I feel like it’s very important to shed light on this topic,” said Chris Peusch, with the Maryland State Child Care Association, a nonprofit organization that supports childcare providers.
Peusch has been following a FOX45 News investigation into Maryland’s half-billion-dollar Child Care Scholarship Program.
Chris Peusch is with the Maryland State Child Care Association, a nonprofit organization that supports childcare providers (WBFF)
“This is not a good system,” explained Peusch. “It wasn’t prepared well. It wasn’t executed well.”
Peusch believes the program’s failures should not tarnish the reputation of the childcare industry.
“It just hurts the rest of the industry that is doing the best they can and trying to do what’s right,” she stated.
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Maryland’s Child Care Scholarship Program offers cash assistance to families of income eligible children under 13, or under 19 with a qualifying disability. In 2026, the program received $560 million in taxpayer funding – a more than 300% increase from 2022.
But Project Baltimore has learned as funding surged, the Maryland State Department of Education did not have adequate information systems to track the money resulting in at least $10.7 million being paid out in error – which Dr. Joshua Michael, the President of the State Board of Education admitted to FOX45 News last month.
“We have been doing the best we can with the system that we have,” stated Michael.
“We need to take our broken systems and make them more efficient, effective with taxpaying dollars,” Peusch told Project Baltimore.
If state leaders and childcare advocates agree MSDE’s online systems are outdated and flawed, and taxpayer money cannot be properly tracked, why haven’t the computer systems been updated?
Project Baltimore has now obtained documents which show the state received $44 million to develop an updated system to better monitor your money, but it was never implemented.
The Fiscal Year 2027 Maryland Executive Budget analysis explains how Maryland “received approximately $44.1 million in federal funding” through last fiscal year to update the information system for the Child Care Scholarship Program (WBFF)
The Fiscal Year 2027 Maryland Executive Budget analysis explains how Maryland “received approximately $44.1 million in federal funding” through last fiscal year to update the information system for the Child Care Scholarship Program. The project started in 2022 with completion set for “January 2026.” But in November 2025, MSDE “paused the project to reassess scope, business rules, and system requirements.”
FOX45 News also obtained a vendor contract that shows The Canton Group out of Baltimore received tens of millions to update the online system, which MSDE described as “antiquated” and “has presented extreme challenges related to payments for child care staff and child care programs.”
When FOX45 News interviewed Dr. Michael and State Superintendent of Schools Dr. Carey Wright last month about the childcare program, they never mentioned the state received $44 million to develop an updated computer system that was never implemented.
In an email to FOX45 News on Wednesday, MSDE blamed “previous leadership” saying the program was halted because “It was built on the same shaky foundation that caused the original problems.”
But much of the $44 million to develop the updated computer program was spent under the current leadership of Dr. Wright. Wright became State Superintendent of Schools in 2023. Development of the updated online system was halted in 2025.
ALSO READ | Maryland errors cost taxpayers $10.7M in childcare overpayments, state won’t recoup funds
In its email, MSDE further wrote, “Our focus now is on correcting the underlying problems.”
“It’s very difficult when you have antiquated systems,” remarked Peusch.
In an email to Fox45, MSDE blamed “previous leadership” saying the program was halted because “It was built on the same shaky foundation that caused the original problems.” (WBFF)
From 2023 to 2025, internal state audits identified $66.5 million in overpayments to childcare providers statewide. Peusch says MSDE’s online systems are so flawed, determining true errors, and what payments needs to be recouped, is difficult.
Which raises the question was this all done backwards? Should the state have made sure it had a good system in place before throwing hundreds of millions of taxpayer dollars into it?
“Sure. That would seem logical,” Peusch said.
As FOX45 News reported, the state spent at least $10.7 million in error to childcare providers statewide that was not recouped. Now, Project Baltimore has learned another $44 million was given to the state for a new online computer system that was never implemented. That’s nearly $55 million in total taxpayer money that appears to have been misspent.
Follow Project Baltimore’s Chris Papst on X and Facebook. Send news tips to cjpapst@sbgtv.com
This post was originally published on Fox 45 by Sinclair Media Group.
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