UPSTART, a state-sponsored online preschool program, may be receiving $1 million more in funding than it should and serving fewer low-income students than it is required to by law, according to a new audit.

The report released Tuesday by the Office of the State Auditor found that the Waterford Institute program, which was originally designed to assist families who are economically at risk, said it taught 12,831 preschool students last year. But by this October, the state could find only 9,804 of those students enrolled in kindergarten.

That’s a discrepancy of more than 3,000 students.

“You have some kind of mismatch that doesn’t align,” said state Auditor John Dougall.

In “a worst case scenario,” he added, inflated numbers could have resulted in Waterford collecting reimbursements it did not earn. In the more likely case, many of the students who are unaccounted for could have moved out of state, gone to private kindergarten programs or not gone to kindergarten, which is not required in Utah.

The auditors were unable to verify what happened and are requesting the Utah State Board of Education, which oversees UPSTART (Utah Preparing Students Today for a Rewarding Tomorrow) to report back by the end of the month. Waterford Institute, which hosts the program, said it has already started calling to try to find where those families went.

Whatever the difference, the issue with the enrollment records means UPSTART could be receiving state funds for more students than it’s actually working with, and the proportion of low-income students — who are supposed to be 30 percent of the class — could be inaccurately skewed.

This is the second time in less than a year that an auditor has reviewed the program and reported concerns about it possibly shifting to include more wealthy families.

“We notice this is an issue,” said Claudia Miner, chief UPSTART officer. “We are actively working on it. And we believe we’re doing what the law tells us to do."

State funding has risen for UPSTART since it began from $1.7 million in 2010 to nearly $9.8 million budgeted for this year.

Overall, even if the 3,000 students left Utah or went to a private school, it calls into question why state taxpayers are funding the program — through millions in grant money — meant to prepare preschoolers for a public education, if more than a quarter don’t end up in the state’s classrooms. (The federal government also provides money, ensuring students accepted into UPSTART can complete the modules for free.)

The Utah Board of Education responded to the audit with a written statement that said it plans to update its system for student identification, so it can better track where kids go if they remain in public schools. Part of the problem, it noted, is that students may be registered under different names, meaning they wouldn’t match up from year to year.

For instance, someone may be listed as “Michael” in preschool and then registered as “Mike” in kindergarten. The updated system will require a birth certificate number for Utah-born students so a small name change wouldn’t affect tracking.

Waterford Institute’s spokeswoman said the nonprofit has contacted 2,100 of the families, so far, and the name problem has been the case for more than 600 of them, with most of the rest moving out of state or moving to private or homeschooling. Waterford Institute said it hasn’t been able to reach the remaining 1,000 from the discrepancy.

“There’s never going to be a perfect match,” Miner said. “But that process isn’t over yet.”

The board’s planned fix won’t fully resolve the gap in the future. Many of the students in UPSTART, which is also supposed to prioritize children whose first language is not English, were not born here and wouldn’t have that birth certificate number.

The board of education is also working on a “clawback provision” to receive money back from Waterford after enrollment numbers are updated each year. For the fiscal year 2018, the audit said, that could include up to $1,213,030 in reimbursements.

Miner said the nonprofit has started working separately to address the concerns about not serving enough low-income students by reconsidering what it requires from families who enroll. The program is free for families who can’t afford it or have incomes below 185 percent of the poverty line, but they’re required to submit verifying documents.

Some immigrant parents have expressed concerns about sharing personal information for fear it could lead to them being targeted for deportation. Waterford Institute has tried to assure them that because it’s a state program, their information won’t be given to the federal government.

“We remain concerned that doing this verification can sometimes make the parents of children who might need the program the most skittish about enrolling,” Miner added.

So parents who could qualify for their kids to take the program, and receive computers and internet connections at no charge, are sometimes not putting down their income. And the nonprofit likely isn’t getting an exact count of how many students it should consider as coming from low-income households.

But, according to the numbers it does have, children from low-income families filled 42 percent of the program’s roughly 14,000 slots last year; four years ago, those students made up 71 percent of its enrollment.

“It’s important to reconcile those differences and make sure the discrepancies are cleaned up,” Dougall said. “But it does appear that the program is serving students.”

UPSTART began in 2009 with about 1,600 kids, and evaluations by the Utah State Office of Education have shown increased kindergarten readiness among participating students each year since. In the most recent study, 77 percent of students who had gone through the program for preschool demonstrated average or above average literacy rates in kindergarten, compared to 71 percent in public school and 69 percent in private school.

“What we’re doing with the software and the parents is producing the kind of results we want,” Miner said.

The program does, though, serve fewer Latino students than public and private preschools serve, according to the state evaluation released Tuesday (9 percent compared to 19 percent and 27 percent). But slightly more of its students are living below the poverty line (79 percent to 74 percent and 77 percent).



UPSTART audit report by on Scribd

Correction: 3:50 p.m. Jan. 30: This story has been corrected to state that Waterford Institute is a nonprofit. The story incorrectly referred to it as a school.