A Washington daycare operator is sounding the alarm over alleged fraud in the state’s childcare subsidy program, pointing to payments as high as $1,600 per child — a figure that threatens his own business viability amid soaring minimum wage hikes.
David McMullan, owner of Little Patriots Academy and Buttons and Bows preschool in Puyallup, is not just frustrated — he is flabbergasted by reports of large-scale subsidies flowing into Somali-run home daycares across Washington state.
The issue has ignited a firestorm after The Center Square published findings revealing that some small home-based providers are receiving tens of thousands of dollars monthly — with payouts averaging $1,500 to $1,600 per enrolled child — despite operating with only a handful of children.
McMullan, who also chairs the Pierce County Republicans, told reporters he had no issues with the Department of Children, Youth & Families (DCYF) itself — describing its staff as “responsive and good to work with.” But he condemned the regulatory burden and lack of subsidy increases while demanding higher teacher wages.
“How are they getting that money and we’re not?” he asked bluntly, referring to the disparity between his own struggling business and those allegedly receiving massive taxpayer-funded payouts.
His concern isn’t ideological — it’s financial. With the January 1 increase in Washington’s minimum wage pushing hourly rates to $17.13, McMullan said his margins are being squeezed even further. He operates two functioning daycare centers and a preschool, all compliant with DCYF regulations — yet he remains unable to compete with what he perceives as inflated subsidies.
“We don’t want to turn away families that have to be on subsidies because they need it,” McMullan explained. “I could fill up my daycares and say no subsidies, but then there [are] a lot of people [who] are trying to get their kids in daycare so they can work. If it’s done properly, it helps families out. So, I’m never going to be one of those people [who] says cut all subsidies.”
Yet his frustration stems from a sense of unfairness — and possibly systemic failure. According to fiscal.wa.gov data, many small home daycares are receiving monthly payouts that exceed tens of thousands of dollars — figures that appear unsustainable for operators without economies of scale.
McMullan noted that the situation has drawn scrutiny from multiple levels of government. DCYF Director of External Communications Nancy Gutierrez confirmed that the department investigates all fraud allegations — including unannounced site visits and random audits. In 2024 alone, DCYF conducted approximately 1,440 audits of provider payments.
Gutierrez provided a public report detailing overpayments — which she said was available here: Child Care Subsidy Program Overpayment Report.
Despite these measures, questions remain unanswered. Neither Gutierrez nor DCYF Secretary Tana Senn responded to requests for interviews or clarification regarding how specific facilities are receiving such high per-child subsidies.
Meanwhile, both DCYF and Attorney General Nick Brown issued warnings this week urging daycare providers to report any “harassment” from journalists or citizen reporters conducting door-knocking investigations — particularly targeting Somali-run facilities.
The backlash escalated when U.S. Department of Justice Office of Civil Rights Director Harmeet Dhillon threatened legal action against Brown, warning that his office’s actions might violate free speech protections if found to chill journalistic inquiry.
This episode highlights a broader tension in Washington’s childcare ecosystem — where federal oversight clashes with local accountability, and where community trust intersects with fiscal transparency. The daycare industry, already strained by regulatory complexity and labor cost inflation, now faces accusations of widespread fraud — accusations that may not be entirely baseless.
What started as an investigative piece by The Center Square quickly evolved into a national conversation about subsidy fairness, racial profiling in media coverage, and the role of government in ensuring equitable access to childcare services — while simultaneously protecting taxpayers’ interests.
For McMullan, the answer lies not in cutting subsidies — but in reforming them. “I want to see which program gets them that much money per head because I want to get involved in it,” he said — suggesting that the system must be made more transparent and accessible to providers like himself.
As the investigation continues, the spotlight remains firmly on whether the state’s subsidy program is truly serving its intended purpose — helping working families — or whether it has become a vehicle for exploitation — or at least mismanagement.
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