An Audit of Kearns Recreation Center Daycare
August 28, 2025
Report Highlights
Lack of Oversight and Separation of Duties Allowed a Supervisor to Improperly Waive $7,200 in Personal Childcare Charges
When the Facility Office Coordinator at Kearns Recreation Center left in December 2023, their billing duties were reassigned to the Childcare Supervisor. This allowed the Childcare Supervisor to not only manage childcare accounts but also handle billing and supervise the childcare providers. This created a serious conflict of interest because the Childcare Supervisor had their own children enrolled in the daycare. Essentially, they became responsible for ensuring their own childcare fees were paid on time.
Because duties were not segregated, the Childcare Supervisor was able to avoid paying $7,200 in childcare fees without anyone noticing for 16 months. This was done by voiding or partially refunding payments made, changing their children’s program end dates, deleting the payment method linked to their children’s accounts, and bypassing system alerts.
Lack of Oversight of Voids, Refunds, and Daily Balancing Allowed Fraud to Go Undetected for 16 Months
In March 2023, Kearns Recreation Center Daycare transitioned to a new software system, “KinderTales”, for managing daycare operations. Parks and Recreation Management instructed staff to continue using the same forms for refunds, voids, and daily cash balancing. However, staff did not follow this guidance. Voided and refunded transactions were not reviewed or approved, and daily cash balancing was not performed. This lack of oversight allowed the Childcare Supervisor’s actions to avoid paying daycare charges to go undetected.
Excessive and Unmanaged Access to KinderTales Increased Risk of Misuse.
Access in the KinderTales system should only be given based on what each employee needs to do their job. With help from the Regional Recreation Manager and Facility Manager, we reviewed 40 employee accounts at the Kearns Daycare. We found that 19 accounts (47.5%) had the correct level of access, four accounts (10%) had no reason to have access, and 16 accounts (40%) had more access than needed. Additionally, one employee’s account (2.5%) was still active even though they no longer worked there. When employees have more access than needed, there’s a higher risk they could void, refund, or avoid charging for daycare services – all features which were used to commit the fraud.
Lack of Written Procedures, Ongoing Training, and Oversight Resulted in Inconsistent Use of KinderTales
When Kearns Recreation Center Daycare switched to KinderTales in March 2023, Parks and Recreation Management did not create written internal procedures regarding expectations for proper handling of voids, refunds, documenting daily balancing, and ensuring oversight through reviews and approvals.
Additionally, there was no monitoring to ensure daycares complied with the initial training provided and no follow-up training was offered. Furthermore, employees that had received the initial training were not required to acknowledge that they received and understood the training and agreed to comply with it.
