(1) A child care provider or a parent who has reason to believe an overpayment or underpayment of child care assistance has occurred shall notify the department within ten days.

(2) The department is entitled to recover the amount of any child care payment made to a child care provider or to a parent which is in excess of the amount to which the provider or parent was entitled, regardless of whether the overpayment was caused by the department, by the provider, or by the parent.

(a) If an overpayment is due to any error, act, or omission of the parent, whether intentional or otherwise, the parent must repay the overpayment to the department.

(b) If an overpayment is due to any error, act, or omission of the provider, whether intentional or otherwise, the provider must repay the overpayment to the department.

(c) If an overpayment is due to any error, act, or omission of the department, the department may recover the overpayment from either the provider, the parent, or from both, but the total amount recovered from the provider and the parent may not exceed the amount of the overpayment.

(3) The provider or the parent must repay the overpayment within 30 days after the department sends notice of the overpayment with a demand for repayment.

(4) If the provider or the parent fails to repay the overpayment within 30 days, the department may reduce future child care payments or increase household child care copayments until the overpayment is recovered in full.

(5) If an underpayment of child care payments occurs, the underpayment will be corrected by increasing the payment for the following month to cover the underpayment.

(6) When a provider or a parent receives child care assistance in excess of the amount to which the provider or parent is entitled due to a willful action of the provider or parent, the department may pursue criminal charges against the provider or parent. Criminal prosecution may be pursued in addition to recovery of the overpayment as provided in (2) and (3) of this rule.

(a) A willful action includes but is not limited to the making of a false or misleading statement, a misrepresentation, or the concealment or withholding of facts or information.

(7) If a willful action is an overclaim, the following will occur:

(a) The first willful overclaim will result in:

(i) an assessment of 10% of the amount actually due being added to the amount of repayment due if an overpayment has already been made to the claimant;

(ii) if an overclaim is discovered before payment is made, deduction of 10% of the amount due from the amount paid to the claimant; and

(iii) if the provider is responsible, the loss of web invoicing privileges for six months and the imposition of the requirement that copies of sign in/sign out sheets must be submitted with invoices for the following three months.

(b) The second willful overclaim will result in:

(i) an assessment of 25% of the amount actually due being either added to the amount of repayment due to the department or deducted from the amount of payment due to the claimant, depending upon whether payment to the claimant has already been made; and

(ii) if the provider is responsible for the overclaim, the loss of web invoicing privileges permanently and imposition of the requirements that the provider must submit copies of sign in/sign out sheets with invoices for the following six months.

(c) The third willful overclaim will result in the household or provider responsible being ineligible to participate in the child care development fund child care assistance, grant, and quality child care programs for seven years.

(8) Overpayments issued to program types whose business structure is sole proprietorship, partnership, or corporation and the business dissolves or otherwise becomes defunct and the department is unable to collect monies owed, the principals, shareholders, officers, or other individuals involved with the business at the time of dissolution are disqualified from receiving Child Care and Development Fund (CCDF) funds under any other business name or entity. Any shareholder, officer, partner, owner, or other individual involved in the management of a child care business that does not reimburse the department for overpayments made to the child care business is disqualified from receiving Child Care and Development Fund (CCDF) funds or being certified as a provider.