COLUMBIA, Md. (WBFF) — Maryland’s Child Care Scholarship Program costs taxpayers more than half a billion dollars a year. But internal emails obtained by FOX45 News reveal, nearly two years ago, state employees knew the program had serious problems tracking payments.
How much taxpayer money was paid out as a result of errors? According to industry leaders, the state may never know.
Inside the Nancy S. Grasmick State Education Building in downtown Baltimore, Maryland State Department of Education employees oversee a $15 billion public education system. FOX45 News has obtained internal MSDE emails from April 2025, that show a year-and-a-half ago, employees in this building had discovered a major problem with Maryland’s Child Care Scholarship Program and how tax dollars were being spent.
Over the past five years, the program’s funding has surged more than 300%. Growing from $132 million in 2022 to $560 million in 2026 (WBFF)
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“What is happening now is exactly what was anticipated,” one employee emailed to a supervisor regarding the program. “We cannot continue to pay millions and we have no invoices.”
“What are taxpayers supposed to think of this?” Project Baltimore’s Chris Papst asked Dr. Joshua Michael, President of the Maryland State Board of Education and State Superintendent of Schools Dr. Carey Wright. “This sounds like an absolute mess. This is a half a billion-dollar program.”
“We have been doing the best we can with the system that we have,” Michael answered. “Under the previous administration at MSDE, it was a rushed implementation. We didn’t have the infrastructure in place.”
Dr. Joshua Michael, President of the Maryland State Board of Education and State Superintendent of Schools Dr. Carey Wright sat down with Project Baltimore to discuss the scholarship program (WBFF)
Maryland’s Child Care Scholarship Program offers cash assistance to families of income-eligible children under 13, or children under 19 with a qualifying disability.
Over the past five years, the program’s funding has surged more than 300%. Growing from $132 million in 2022 to $560 million in 2026.
FOX45 News obtained an email from September 2025 which shows internal MSDE audits found $66.5 million in potential overpayments were sent to childcare providers from 2023 to 2025. That same month, MSDE told childcare providers it would not seek to recoup that money.
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“MSDE has decided not to move forward with the broad recoupments of past payments,” said Assistant State Superintendent Sarah Neville-Morgan during a virtual childcare provider town hall meeting in September 2025.
MSDE later determined, of the $66.5 million, $10.7 million was paid out in error, which the state let providers keep. Another $5 million is still being evaluated. The remaining $50.7 million was not deemed to be overpayment errors – but rather the result of audits that were auditing a faulty program.
The remaining $50.7 million was not deemed to be overpayment errors – but rather the result of audits that were auditing a faulty program (WBFF)
Wright and Michael told FOX45 News the state did receive invoices from childcare providers for the remaining $50.7 million. However, those invoices were submitted after MSDE told providers in September 2025 it would not move forward with recouping overpayments – and corresponding attendance sheets were not submitted.
Also, many of those invoices were handed in three years after the care was provided. According to state law, childcare providers have 60 days, not three years, to submit invoices to verify that Child Care Scholarship Program payments are accurate.
“These invoices came in three years after the payments went out. Is that a violation of state law?” Papst asked.
“No, I think it’s a violation of how the program was set up,” Wright responded.
Dr. Wright has overseen MSDE since October 2023 when she took over the department as Interim State Superintendent of Schools. For at least the past year-and-a-half, the state knew the childcare program had problems. The public was not informed about the problems until Project Baltimore began reporting on the audits, but MSDE’s partners were aware.
One employee emailed to a supervisor regarding the program, “We cannot continue to pay millions and we have no invoices.” (WBFF)
Chris Peusch with the Maryland State Child Care Association is working with MSDE to resolve issues in the program. In an email last week to FOX45 News, Peusch wrote, “Given the lack of accurate tracking tools and a Child Care Scholarship Program experiencing skyrocketing usage, determining true errors has been extraordinarily difficult.”
“Your own partner is saying MSDE really can’t figure out when there’s errors in these payments,” Papst stated.
“I can tell you that we take our job very seriously, Chris,” Wright replied. “We track down as much as we possibly can. We review all of the paperwork. We will go after fraud, waste and abuse, period.”
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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