When the warnings sounded, Erie County waited &#8212 and waited some more, according to a

new state report.

For more than a year, the report said, Erie County&#8217s Social Services Department

ignored state signals that it would cut contributions to each county&#8217s child care

subsidies, a support that keeps struggling families off the welfare rolls.

Documents: Final report from audit of Erie County's child care subsidy program Response to audit from Erie County Department of Social Services

Then, well after other counties had compensated by cutting their costs, Erie at the last

minute threw some 1,100 children from almost 700 working poor families off the program,

initially telling them they had just 10 days to make other day care arrangements. The deadline

was later extended to 30 days.

Social Services Commissioner Carol Dankert announced the action in December, 18 months

after the first state warnings in June 2008, according to the state Office of Children and

Family Services, whose Bureau of Upstate Audit reviewed Erie County&#8217s handling of its

child care block grant.

The Erie County Department of Social Services &#8220should have taken action much sooner

than it did,&#8221 the Office of Children and Family Services reported, adding that county

officials might have chosen a less drastic course had they &#8220taken effective action in a

timely manner.&#8221

&#8220Hindsight is always 20/20,&#8221 Dankert wrote in response, &#8220and what might be

considered &#8216timely&#8217 in May 2010 would have been viewed as premature in June

2008.&#8221 Had she acted in October rather than December, she said, she still would have had

to make it just as difficult to qualify for the program.

Erie County had been providing child care subsidies to families at 200 percent of the

poverty level. To close the deficit in state support for 2010, Dankert allowed subsidies for

families earning no more than 125 percent of the poverty level, or $27,562 a year for a family

of four, starting this year.

She sent close-out letters to 674 families, affecting 1,091 children. Many families&#8217

monthly day care costs more than doubled until they could find less costly arrangements. But

with the program still charting a deficit in March of this year, Dankert in April stopped

accepting new applications from the working poor.

Also, while Erie County had millions of dollars in reserve, County Executive Chris Collins

refused to spend any of it to continue child care subsidies to the affected families, even for

a few months. Collins adamantly refuses to supplement cuts in state aid with county dollars.

The county executive has said he will open up eligibility again if Erie County can obtain

more day care aid, mostly likely through the federal government. Sen. Kirsten Gillibrand,

D-N.Y., has sought more money for Erie County, home to the nation&#8217s third-poorest major

city. But during a recent visit to Buffalo, Gillibrand said she has yet to be successful

because &#8220money is so tight.&#8221

Erie County&#8217s actions drew outrage from day care providers, from agencies that serve

the poor and from state and county legislators, especially Democrats representing urban

districts. Three Assembly Democrats from Buffalo &#8212 Sam Hoyt, Crystal Peoples and Mark

J.F. Schroeder &#8212 requested the review, but it already was under way.

&#8220It is the job of county government to responsibly implement state funding for

important social programs like the child care subsidy, which enable struggling families to

continue to work,&#8221 Hoyt said in a written release. &#8220I am disappointed but not

surprised by these findings, which highlight some serious shortcomings.&#8221

The Office of Children and Family Services told counties in June 2008 it was changing the

method to calculate their child care block grants, in order to cut aid by 2 percent. The state

also was penalizing counties that had been not been spending all of their child care dollars

in a given year, Erie among them, because such &#8220rollovers&#8221 implied there was less of

a need within those counties.

So Erie County&#8217s program, along with those in other counties, was headed for a deficit

if their rules remained the same. But the auditors said those other counties &#8212 which were

not named &#8212 were finding ways to spend less, mostly by shutting out new applications. One

county did so as early as July 2008, the report said.

Erie was drawing on the dollars it had rolled over from previous years. But by May 2009,

its officials knew the program would run a deficit in 2010.

When a high-ranking staff member ran some numbers, he failed to account for the

&#8220summer spike&#8221 &#8212 the increased spending on child care when schools recess

during the summer, the state report said.

Other factors contributed to the deficit: The state would be allowing a rate increase for

day care providers on Oct. 1, 2009. And unmentioned in the state report, the Office of

Children and Family Services was dropping the rule that single parents seek child support from

noncustodial parents in order to qualify for subsidies.

By August 2009, Erie was measuring the coming year&#8217s deficit in the program at almost

$7 million. However, the report said, Erie&#8217s Social Services Department last summer was

still seeking additional dollars from the state rather than trimming costs &#8212 perhaps by

shutting out newcomers.

&#8220In retrospect,&#8221 the authors wrote, &#8220[Erie County&#8217s] continued belief

that a more appropriate solution to the large deficits was additional funding, rather than

more carefully controlling expenditures, appears questionable.&#8221

Dankert closed her response to the Office of Children and Family Services with this

statement: &#8220It is our position that we acted in a &#8216timely&#8217 manner when it

&#8216became evident&#8217 that an adjustment in eligibility standards was required. We assert

that substituting your judgment for ours as to situational awareness and timeliness is one of

subjective hindsight,&#8221 she said.

&#8220We do, however, believe that the audit has provided some valuable insights &#8212

most of which point to the fact that situations such as these can best be avoided by [both

offices] working in closer partnership.&#8221