Baltimore, MD – State officials allocated roughly $44.1 million in federal funding to the Maryland State Department of Education (MSDE) to modernize the online system that tracks the Child Care Scholarship Program, yet the system was never completed, according to documents obtained by Project Baltimore and reported by Fox Baltimore.
The Child Care Scholarship Program provides cash assistance to families with income‑eligible children under 13, or under 19 with a qualifying disability. Funding for the program surged to $560 million in 2026, a more than 300 % increase from 2022, according to the project’s findings.
MSDE began the system upgrade in 2022 with a target completion date of January 2026. In November 2025, the department paused the project to reassess scope, business rules, and system requirements, and the upgrade was never resumed. A vendor contract shows The Canton Group of Baltimore was awarded tens of millions of dollars for the work, which MSDE previously described as “antiquated” and a source of “extreme challenges” for payments to child‑care staff and programs.
State officials have acknowledged significant payment errors linked to the outdated system. Dr. Joshua Michael, President of the State Board of Education, told Fox45 News that at least $10.7 million was paid out in error to child‑care providers and has not been recouped. Internal audits from 2023 to 2025 identified $66.5 million in overpayments statewide.
Chris Peusch of the Maryland State Child Care Association, who has been following the issue, said the failures “hurt the rest of the industry that is doing the best they can and trying to do what’s right.” She emphasized that the program’s shortcomings should not tarnish the reputation of the broader child‑care sector.
When asked about the unspent $44 million, MSDE attributed the halt to “previous leadership” and noted that the project was built on a “shaky foundation” that caused the original problems. The department’s email to Fox45 News indicated that current leadership, including State Superintendent Dr. Carey Wright, who took office in 2023, is focusing on correcting the underlying issues.
What’s next: MSDE says its priority is to address the overpayment errors and improve the existing system, though no new timeline for a replacement platform has been announced. Lawmakers and child‑care advocates are expected to seek additional oversight as the state continues to allocate substantial taxpayer dollars to the program.
Sources: foxbaltimore.com
