The responsibility for investigating fraud in Minnesota's child-care assistance program should be transferred from the state's social services agency to the state Bureau of Criminal Apprehension (BCA), according to a recommendation issued Tuesday by Legislative Auditor James Nobles.

In a letter to state lawmakers, Nobles said investigations of alleged fraud in the state-subsidized Child Care Assistance Program (CCAP) are criminal in nature, making them more in line with the mission of the BCA than that of the Department of Human Services, which oversees the program and now handles the investigations.

The recommendation follows a detailed report from Nobles' office last week that found significant levels of fraud in the $254 million child-care assistance program, as well as distrust between the program's fraud investigators and the department's inspector general, who oversees fraud investigations across several branches of the agency. A handful of day-care operators have been charged with defrauding the CCAP in recent years; Nobles' office concluded that fraud within the program is likely higher than the $5 million or $6 million county prosecutors have documented, but it could not reach a reliable estimate of how much fraud exists.

In 2013, the Legislature passed a law that requires the department to investigate alleged or suspected financial misconduct by child-care providers. In response, the department created a team of investigators with law enforcement experience.

In his letter, Nobles noted that investigators with the program's fraud unit already have a close working relationship with the BCA. The BCA, for instance, is responsible for determining whether to make a criminal referral following the findings by CCAP investigators; and the BCA already has two agents assigned to such investigations through an interagency agreement. At the BCA, he added, investigators also would have easier access to legal advice and technical support.

A Human Services spokeswoman said in a statement that confidence in child-care fraud investigations is important, and Gov. Tim Walz's budget contains a number of proposals that would strengthen the program's oversight. "The appropriate structure for the state's regulatory functions has been looked at over the years," the agency said in a written statement.

"We are open to having those discussions with lawmakers and stakeholders in a thoughtful, careful manner," the statement said.