Minnesota's legislative auditor has confirmed that a significant and unacceptable level of fraud exists in the state's Child Care Assistance Program (CCAP) because of kickbacks, phony records, false billing and a lack of basic safeguards among the largest centers.

Is there $100 million in fraud annually, as was alleged by Department of Human Services CCAP investigators? Legislative Auditor James Nobles could not confirm that, but noted that was in part because of the limited scope of his review and because the controls needed to quantify the totality of fraud did not exist. However, Nobles said, "CCAP fraud is a recognized problem. Of that there is no dispute." He also said his office found that "a serious lack of trust" between CCAP investigators and the Inspector General's Office is contributing to the program's issues.

The audit found no verification that, as also was alleged, money was flowing from Somali day-care centers to overseas terrorists. That's important, because the allegation became a political football when it surfaced last year, and was used to tarnish an entire community. However, he noted, "We cannot definitively say that it has not occurred. It's a very difficult thing to prove."

What Minnesotans are left with is a level of fraud and lack of basic safeguards and data collection that indicate much must be done to re-establish accountability and trust in this program, particularly as regards its largest child care centers. DHS Commissioner Tony Lourey acknowledged as much at a hearing Tuesday. And thanks to an independent report ordered by previous Commissioner Emily Piper, he has a detailed template in hand.

The outside consultant, hired to investigate the CCAP investigative unit — itself indicative of a serious rift within the department — looked broadly and confirmed more than enough to warrant an overhaul. Bills filed as much as 318 days after a billing period closed. Fraudulent billing. Falsified documents on required training. Retroactive billing that allows for large, lump sum payments. No electronic attendance, standard in states such as Ohio since 2012. And, the most prevalent form of fraud, centers that paid parents to enroll their children and hired some essentially to care for their own children. The consultant estimated that since 2013 about 7 percent of payments were made to centers that used fraudulent billing practices, totaling $72 million over five years.

None of this is what taxpayers expect when they part with hard-earned money to help lift others. Minnesotans are generous and see the value in day care that helps parents take jobs or get the skills that lead to jobs. That generosity should be respected with a scrupulous attention to how dollars are spent.

About those CCAP investigators. The unit was created in 2013, after the last round of fraud allegations. Most have lengthy backgrounds in law enforcement. The head of that unit attached a lengthy memo that Nobles included in his report as Schedule B and is worth a deeper look for the concerns it raised about too little attention to licensing, vetting and quality control of large centers. The unit itself may need attention. Its credibility rests on attention to detail, data, provable evidence and a strong working relationship with others in the department that can be used to determine patterns and assess risk.

Gov. Tim Walz, in an interview with an editorial writer, said he is deeply troubled by the findings and committed to rooting out problems allowed to fester too long. "I'm outraged at this, and so should Minnesotans be outraged," he said. "If we allow fraud, waste, abuse and mismanagement, we're depriving people on waiting lists and undermining trust in the system. If you really care about these programs, there is a high onus to fix them," he said. That's especially critical because Walz is seeking additional funding for the program, which has a waiting list of more than 2,000 children.

Walz said there are "clear structural issues" at work that require a change in both the culture of the department and attitude. The days of mistrust and adversarial positions "better be gone," he warned. "Many agencies need less of a bunker mentality. We're so risk-averse we want to hide anything that doesn't look like 100 percent success. I want to change that culture."

We hope that will include a broadly bipartisan effort. Thankfully, some good recommendations are emerging in the wake of Nobles' report, and Lourey said some changes are already in the works. Nobles suggested separating the inspector general position from department management, perhaps attaching it to the state auditor's office, to maintain independence and a neutral eye. The role of Inspector General Carolyn Ham should also come up for closer scrutiny, and reasons established for the serious lack of communication between investigators and her office.

A Republican proposal that the largest centers should be bonded to guarantee recovery of state resources is not unreasonable. And if parents are to be hired, centers should demonstrate the job is real, necessary, and the parent is trained and qualified to fill it. No one should be paid to enroll their children. That meticulous, accurate attendance records should be submitted with bills goes without saying.

It was disappointing to hear Nobles say at the Senate hearing that he has not been asked to present his findings in the House. We hope that is an oversight that will be quickly rectified. Getting to the bottom of the problems in this vital program is a nonpartisan job, and will require the combined efforts of the DFL House, Republican Senate, the governor and an agency that must commit to doing better.