Some day care is unlicensed

Special exemptions let centers avoid scrutiny

Panther’s House of Pride wasn’t supposed to be a day care center.

It was, instead, a summer day camp and after-school sports program in Decatur with a special exemption from the state: Panther’s House didn’t have to meet Georgia’s long list of child care standards as long as the after-school care was free and the camp operated for seven hours or less per day.

But the program began charging as much as $45 a week for after-school care and staying open for 11½ hours a day, effectively operating as a full-fledged child care program that must be licensed and regulated, state records say.

The Georgia Department of Early Care and Learning, which regulates child care, has handed out thousands of exemptions to similar organizations that don’t fit the description of a traditional child care program — summer camps, after-school programs, church-based day care centers, plus mother’s-morning-out programs.

The Atlanta Journal-Constitution has found that the state’s oversight of these programs is not just loose, it’s nonexistent. These organizations operate in a gray area of Georgia’s child care industry into which state investigators rarely venture. Many of them, however, care for children long enough — four hours a day or longer — for things to go wrong.

State investigators don’t inspect the programs for health and safety violations. The state also has not taken advantage of some enforcement tools at its disposal, such as seeking criminal charges against exempt programs operating illegally. Possibly the greatest indicator of the status of DECAL’s exemption program: State officials don’t know how many exempt programs operate in Georgia today.

In addition, because the state doesn’t pay attention to these programs, it does not know whether children have been injured or killed in these settings.

“I’m really dead against exemptions,” said child-care expert Richard Fiene of Penn State University. “I think that good child development is good child development, no matter where the child is at. We’ve seen too many horror stories already.”

DECAL Commissioner Bobby Cagle says his department focuses on traditional day care providers and doesn’t have the resources to keep tabs on the thousands of exempt programs, too.

“We’re looking for those things that are truly child care,” Cagle said. “I would argue that there are a considerable number of parents out there that do not expect us to be in each and every setting.”

If DECAL had more resources, “we would do a lot more,” Cagle said.

How many? No one knows

The AJC filed an Open Records Act request with DECAL to find out how many exempt programs are operating in Georgia.

The agency could not provide a list, saying the answer is buried in 7,000 exemption files collected during the past 20 years.

“It is a concern,” Cagle said. “That was one of the things that we are very concerned about.”

In an interview with the AJC, Cagle announced that he will have someone review the 7,000 files this year.

License-exempt programs are not uncommon across the country, though some states offer more exemptions than others. Georgia has 14 categories of exemptions. DECAL’s research shows that Georgia has more exemptions than at least eight other states it studied.

“I think you would find some of these exemptions in some states, but [Georgia’s exemption] list is way too broad,” said Fiene (pronounced FEE-nee). He added that the religious exemption and another for programs that don’t charge fees concern him the most. “Many of the others are overly broad as well.”

Licensed day care providers, which must meet state standards and compete with exempt programs, say that parents don’t know the state investigators aren’t keeping watch over some child-care settings.

“Parents don’t understand the difference,” said Carolyn Salvador, executive director of Georgia Child Care Association, which represents day care owners. “They assume that they’re putting [their children] in there and someone is watching.”

It’s unclear how many children in the United States spend time in license-exempt programs, according to a March 2012 report by Child Care Aware of America, formerly known as the National Association of Child Care Resource & Referral Agencies.

The same report details the dangers of such care.

“Unlicensed care is not inspected; therefore, the health and safety of children in this type of care is unknown,” the report stated. “In reality, many operate with little oversight by any state entity.”

The AJC could not determine how often children get injured or die in Georgia’s license-exempt programs. The state doesn’t track that information.

Regardless, the hazards are real, child care experts say.

Fiene, the Penn State expert, studied legally unregulated child care programs in Pennsylvania in 2002. Of the 700 such programs contacted, only six or seven agreed to participate.

“Can you imagine what the other 600-plus must have looked like?” Fiene said. He described the unregulated programs as providing “the worst care in the state. The care was at such an abysmal level. It was scary.”

An organization that obtains an exemption in Georgia isn’t required to follow state rules for disciplining children, proper hygiene, staffer training and serving nutritious food, among many others. (Child-care centers run by other government agencies, such as after-school programs at public schools, must follow any rules created by that agency.)

The state investigates complaints only about programs overstepping the terms of their exemptions. The agency could not say how many complaints it has received in recent years about exempt programs or how many were substantiated.

Once an organization gets an exemption, it rarely has it taken away, records show. During the past five years, the state has revoked exemptions for cause 15 times — an average of three per year, records show.

Dodging the regulator

Four years ago, Mike Grant added an after-school and summer fitness program for children to his health club in Zebulon, about 50 miles south of Atlanta. He spent more than $200,000 to put up a 6,000-square-foot building and to buy a bus, among other expenses.

Once he built it, the children came, their parents paying $220 a month.

It wasn’t long before a complaint brought a DECAL investigator, too. “Mr. Grant, you’re doing this wrong,” the investigator told him, according to Grant. “You’ve got to get licensed.”


Exclusive series

This in-depth analysis is the latest in a months-long investigation by the AJC into the state’s oversight of day care centers. We’ve reported about injuries and deaths in day cares, day cares’ failure to pay state fines and how lax day cares have continued to receive state funds.


Public funding for exempt programs

The Atlanta Journal-Constitution has been investigating the state’s oversight of the child-care industry for 10 months. In March, the newspaper published an article revealing that, over the past four years, $355 million in state subsidies went to Georgia day cares that had been deemed “noncompliant” by the state. Of that, $217 million came from the Childcare and Parent Services program, known as CAPS, a subsidy for low-income families.

While reporting on this story, the AJC learned that exempt child-care programs, which operate without oversight from the state, also get money from the CAPS program.

In the 2011 fiscal year, 271 exempt providers collected $5 million, according to information obtained through an Open Records Act request.


Who can get an exemption

Georgia’s government has given out exemptions since 1983.

Exempt child care programs generally differ from traditional child care programs because they don’t care for children as long, or are more limited in the ages of children they serve or the services that they offer. However, some programs, such as those operated by other government agencies or churches, can be full-fledged child-care programs.

As of January, the state’s Department of Early Care and Learning issues exemptions for organizations that fall into the following 14 categories:

● Child care programs owned and operated by government agencies

●Private schools for children ages 5 and older.

●Private schools for 4-year-old children, including before- and after-school care.

●Parent’s Morning Out, Parent’s Night Out or similar programs.

●Nursery schools, playschools and kindergartens that operate up to four hours a day.

●Summer camps

●Music classes, dance classes, swim lessons and other short-term educational or recreational activities.

●Short-term child care programs at fitness clubs, retail stores and religious facilities.

●Instructional programs for school-age children after their school day, such as martial arts, gymnastics and dance classes.

●Tutoring programs for school-age children

●Youth programs for school-age children run by national nonprofit organizations, such as the Boys & Girls Clubs of America.

●Child care programs that are free of charge.

●Child care programs affiliated with churches or religious groups and are accredited.

Grant didn’t think his youth program should have to be licensed. So he researched the exemptions and found he could get one if he provided care for free. The only problem with that was that he wanted to charge for it.

“One night, about 3 o’clock in the morning, I sat up and said, ‘I got it! I figured out how to make it free!’ ” Grant said.

Instead of charging fees for the program, he said, he sold parents who enrolled their children a “wellness package” for the same amount with gym memberships, personal training and tanning sessions.

Grant doesn’t view his solution as devious. “I think it’s pretty smart,” he said.

The state had a different perspective. In February 2011, the state determined Grant was not only charging people, but his program operated from 7:30 a.m. to 6 p.m. — longer than the four hours his exemption allowed, state records show.

“You are in violation of the law,” a DECAL official wrote. “You must cease operating and complete the licensing process.”

Grant’s program is now licensed.

‘We didn’t know’

Fiene, the Penn State professor, says states should require license-exempt programs to follow a few critical rules to help keep children safe, such as requiring criminal background checks and education standards for all employees and rules for the supervision of children.

“If we can do just those things, we’re going to go along way in ensuring that kids are going to be in healthy and safe environments,” Fiene said.

Janet Kim has seen child care from both angles.

She owns a licensed child care program in Duluth named CORE Kids Academy, and she used to run an after-school program, unaware at the time that she was required to get a state license or an exemption.

She believes her children are safer now than when her after-school program answered to no one. “Now that I think back on it, it could have jeopardized the well-being of the children in our care,” she said.

Kim said she and her staff sometimes left sleeping children unmonitored. They never conducted criminal background checks on workers. They mixed children of different ages together.

“I think the kids that are in [exempt or unlicensed] programs are definitely in jeopardy of their health and safety,” Kim said. “We didn’t know.”

No automatic penalties

As of January, exempt programs are required to inform parents that they are not licensed by the state.

Cagle’s agency also is assuming more oversight — or threatening to — by adding language in the exemption rules requiring exempt businesses to produce documents if requested.

However, the agency has not taken advantage of some tools for enforcement that it already has. When the state catches organizations operating outside the boundaries of their exemptions, it does not automatically rescind their exempt status. Instead, the state says it first asks them to follow the rules.

Church-based organizations must get criminal background checks on employees and are subject to unannounced background check “audits.”

Asked whether DECAL has done any audits, officials said no.

The state also may pursue misdemeanor criminal charges against people operating child care programs that should be licensed. Numerous child care programs that had their exemptions revoked fit that description, according to DECAL records.

In response to a records request from the AJC, the department said it was “unaware of any instances” of seeking criminal charges against exempt programs.

Changing the name?

Panther’s House of Pride, the youth sports program from Decatur, had its exemptions for a day camp and after-school program revoked in January 2008, but that was a mere bump in the road for the owners.

A month later, four women identified as owners of Panther’s House created another corporation in Decatur, Sportz Center Academy, according to documents filed with the Georgia Secretary of State.

Sportz Center appears very similar to the shuttered program. The state granted them an exemption to run a day camp in April 2008. (The organization has since applied for a license for a day care program.)

Reached by phone, one of those owners, Connie Chatmon, distanced herself from the Panther’s House program, saying she was not aware that it had its exemptions revoked. The letter detailing the revocation, however, was addressed to her.

She also said she did not own Panther’s House and simply worked there. Incorporation papers filed with the Secretary of State’s Office list Chatmon as one of the four owners.

Pressed for more information, Chatmon declined.

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