Indebted daycare centre under the microscope

A standing committee of community services will conduct an operational review of the Walden Day Care Centre, which owes more than $24,000 to the city.

The city is the local manager of child care and oversees wage subsidy allocations for 23 different child care operators in Greater Sudbury. Walden Day Care Centre is in arrears for 2011, and has indicated it will be unable to repay the wage subsidy grant within the specified timelines. The money was owed to the city at the end of January.

Walden Day Care was in arrears of about $34,000 for the wage subsidy reconciliation in 2010, but managed to pay off that debt on Dec. 30, 2011 after making arrangements with the city.

The city requires an annual reconciliation from its 23 providers in order to ensure the funds are being used for their intended purpose. For example, a provider could have a reduction in operating capacity during the year, which would then result in an overpayment that has to be paid back to the city.

Walden Day Care Centre has been in operation since 1989 and has had various interactions with the city throughout the past 10 years, according a staff report. The daycare is licenced to provide 349 spaces in four sites and is the only operator providing English-language licenced child care in the Copper Cliff and Lively areas.

With approval from council, the city would spend between $10,000 and $15,000 to appoint an auditor to review the current operations at the centre, funds that would come from the province, in an effort to provide a better understanding of the financial condition of the centre. This will allow the city to prepare a contingency plan if there was a default by the centre.

The third party would recommend a repayment plan based on the long-term sustainability of the daycare centre.

The community services committee favoured this route over clawing back the monthly wage subsidy that is owed to the daycare centre a repayment method that would recover the funds within the fiscal year. Staff reported this would collect the amount owing in a timelier manner, but it would not address the root problem of ongoing payment issues.

Ward 2 Coun. Jacques Barbeau said he and the daycare operators acknowledge the problems over the years, but “it's a first-class facility that offers the best daycare available to our residents in Walden. If at the end of the day, the Walden daycare were to close, it would impact a significant amount of people, and it just wouldn't be the right decision for council to make.”

Never has the daycare operator suggested that we strike the debt, he said.

“I've asked Catherine (Matheson, general manager of Community Development) to bring forward this report, and (the daycare operator) has suggested it would repay the debt in 12 months, but it was I who suggested we have someone take a look at the situation. We don't want the daycare to pay back the funds too quickly and put them in a situation similar to what they are in today.”

All committee members voted in favour of the review, and council will have the final say in the matter.

Ward 11 Coun. Terry Kett stressed to staff that the main focus of the review needs to be on the sustainability of the daycare centre, rather than on its financial situation.

Posted by Arron Pickard