North Carolina Audit Finds Child-Care Inspections Too Predictable
A July state audit found that required child-care visits were completed but often followed repeat timing patterns. It also flagged older star ratings and delays in parent notifications, while DHHS disputes parts of the assessment.
A North Carolina State Auditor performance audit released July 23 found that the state documented required annual compliance visits at all 4,112 licensed child-care centers reviewed for fiscal year 2025, but many visits followed repeat timing patterns that auditors said made the supposedly unannounced inspections more predictable.
The audit also identified separate concerns about some star ratings being based on evaluations five to seven years old and delays in notifying parents about serious violations and lead hazards. The findings matter to families and taxpayers as North Carolina expands public funding for subsidized child care.
Required visits were documented as completed
North Carolina law requires the Department of Health and Human Services’ Division of Child Development and Early Education to conduct at least one unannounced annual compliance visit at every licensed child-care center.
The audit reviewed annual compliance-visit data for fiscal years 2024 and 2025. It found that the division documented required fiscal 2025 visits for all 4,112 child-care centers in the audit scope. Auditors also tested 68 of the 303 administrative actions issued during fiscal 2025 and found that the division verified corrective actions for the sampled violations.
The audit did not find that required annual inspections were missing. Its main finding concerned the timing of some visits and whether that timing weakened the value of unannounced monitoring.
Auditors found repeat timing patterns
When auditors compared fiscal 2025 visit dates with the prior year’s visits, they found:
- 197 visits, or 4.6%, occurred on the same weekday within the same calendar week as the prior year’s visit.
- 667 visits, or 16.2%, occurred during the same calendar week as the prior year’s visit.
- Some repeat pattern appeared in 68 of the state’s 100 counties.
- In 21 of those counties, at least 25% of visits followed a repeat pattern.
The highest same-week percentages were in Union County at 80%, Montgomery County at 75%, Richmond County at 70%, Stanly County at 70% and Anson County at 69%. The audit presented those figures as examples of a statewide oversight issue, not as a finding limited to those counties.
Division policy requires visits to be completed within 364 days of the prior visit and allows them to occur up to 60 days earlier. The policy also says intentional planning is needed to avoid making visits at the same time each year.
Auditors said repeat timing reduces the likelihood that inspectors will observe typical operating conditions. They said that matters for violations involving food storage, preparation and handling; medication and hazardous-product storage; sanitation of diapering surfaces; and tobacco- and smoke-free requirements. The audit did not say predictable scheduling caused violations or harmed children.
DHHS disputes the scheduling conclusion
DHHS disagreed with the auditor’s conclusion that the repeat patterns reduced the unpredictability or effectiveness of annual compliance visits. The division said its policy contains both required provisions and preferred guidance, and that it has interpreted “same day” to mean the same calendar date rather than the same weekday.
The State Auditor rejected that interpretation, saying the division’s approach did not align with the policy’s stated intent to vary visit times from year to year. Auditors also said that simply clarifying the same-calendar-date rule would not by itself address the repeat patterns identified in the audit.
DHHS agreed to clarify the policy, monitor scheduling practices and provide updated guidance to regulatory-services staff. The division’s written response says it plans to finalize the policy update by September 1, 2026.
Some star ratings may be outdated
The audit separately listed star-rated license assessments as a matter for further consideration. Routine reassessments were paused during the COVID-19 period and later legislative changes while the state’s quality-rating system was being revised. As a result, some centers retained ratings based on evaluations conducted five to seven years ago.
The audit did not say every center has an outdated rating. It said some ratings may no longer reflect current staffing, operations or quality. Star ratings are intended to show quality beyond minimum health and safety standards and can affect eligibility and reimbursement levels under the subsidized child-care program.
DHHS said annual compliance visits continued during the rating pause, apart from a brief pandemic-related suspension, and that new quality-rating rules took effect July 1, 2025. Parents can review inspection summaries, available rating information and other public records through the state’s Child Care Facility Search system.
Notification timing also drew scrutiny
The audit identified circumstances in which administrative actions for serious violations were issued months after incidents occurred. Because child-care operators generally must post administrative-action notices after receiving them from the division, a delayed action can delay information available at the facility.
Auditors also identified examples in which several months passed between detection of a potential lead hazard and formal parent notification. The report said those delays could limit parents’ ability to receive timely information about possible health risks.
DHHS responded that current rules generally place responsibility for posting administrative actions with facility operators and do not require the division to directly notify parents of every violation or administrative action. The department also said lead-hazard notifications were made after investigations, environmental testing and reports were completed, as required by state law, and that preliminary notices could contain incomplete or inaccurate information.
The State Auditor acknowledged those legal and procedural points but maintained that the delays identified in the report still limited parents’ access to timely information. The notification issue, like the star-rating issue, was presented as a matter for further consideration rather than as a formal finding that the division violated the cited requirements.
The findings come as subsidy funding increases
North Carolina’s 2026-27 budget directs $97 million in recurring federal funds to raise child-care subsidy reimbursement rates and establishes a statewide floor rate for subsidized care. The budget provision helps support the subsidy program used by low-income working parents; it is not an audit recommendation and is not earmarked specifically for inspection enforcement.
The timing gives the audit broader accountability significance. More public money will flow through the subsidized-care system, while parents and providers will continue relying on inspections, posted actions and star ratings to assess licensed care. The audit does not conclude that the budget investment is ineffective or that providers receiving subsidy funds are unsafe.
For parents reviewing a licensed center, the practical steps are to check the facility’s most recent inspection summaries, posted administrative actions and rating date rather than relying on a star rating alone. The next formal action identified in the audit is DHHS’s planned scheduling-policy update due September 1, 2026.
Sources
- North Carolina State Auditor performance audit PER-2026-4420
- North Carolina Office of the State Auditor report index
- EdNC: 2026 NC budget includes $97 million for child care subsidy program
Discover more from Interactive News
Subscribe to get the latest posts sent to your email.
