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Last week, Oregon Secretary of State Tobias Read released results of an Audits Division investigation that found four preschools squandered hundreds of thousands of taxpayer dollars meant to provide child care to at-need families.
The “wasteful” spending that auditors identified at Preschool Promise, a state-funded program, was the result of those four providers collecting funding for dozens of preschool slots while reporting chronically low enrollment—sometimes as few as one or two children a year.
The state investigation, primarily focused on the years 2021 to 2024, did not identify the four providers by name. But public records obtained by WW show that one of the four providers that auditors flagged matches the financials provided by a preschool owned by the official who now oversees Multnomah County’s universal preschool program, Preschool for All.
That person is Leslee Barnes, director of Multnomah County’s Preschool & Early Learning Division.
State Corporation Division records show Barnes is the registered agent of Village Childcare Enterprises LLC, located in North Portland. She owns the preschool, but says her family currently operates it. In state filings, she is listed as a member and registered agent of the LLC.
Village Childcare reported to the Oregon Department of Early Learning and Care that it collected $833,494 in state dollars for the 2020–21 school year through the 2022–23 school year, ostensibly to fund 63 Preschool Promise seats. In fact, DELC data shows Village Childcare enrolled just nine children during that time.
Those numbers correspond exactly with the figures for an anonymized preschool that auditors labeled as “wasteful” in their July 23 investigative report. (In that document, the preschool was identified only as “Provider 2.”)
Jeff Myers, a Beaverton education watchdog with the advocacy group Save Oregon Schools, says he was the tipster who alerted auditors to potential waste of Preschool Promise dollars in January 2023. When contacted by WW about his complaint, Myers shared public records from DELC.
Out of about 230 Preschool Promise providers, he says the grant amounts given to each provider are so precise “that it’s easy to spot somebody in any list.”
“There was no other provider that was granted that amount of money and then was paid the amount of money that was listed on the Secretary of State’s [Office] report,” Myers says. “Even the enrollment figures helped the match.”
The state program that gave Barnes’ preschool that money is an entirely different one than the county preschool subsidy program she now oversees. Yet those figures raise significant questions about the role Barnes now plays overseeing Preschool for All, a program that has drawn criticism for siphoning resources from existing programs and shifting its goalposts as it struggles to ramp up capacity. The program has also generated vastly more tax revenue than its proponents expected and finished last year with nearly $500 million in reserves.
When reached for comment, Barnes confirmed Village Childcare had collected more than $800,000 in awards from the state despite its low enrollment. She said that’s because no matter the number of students enrolled, Village Childcare still shouldered costs for staff and other in-person operation expenses during the pandemic. She also blamed a nonprofit that received a state grant to find children to enroll, and says her role at the preschool should have no connection to her county position.
“It has no bearing on my role [as director],” Barnes says. “We did not operate wastefully. I operated in accordance to our contract and operating agreement with DELC. Publicly funded programs must be able to operate during times of crisis.”
County spokeswoman Julie Sullivan-Springhetti says the county has opened an internal probe into the matter.
“Responsible use of public dollars and accountability to the public are central to Multnomah County values,” Sullivan-Springhetti says. “We have begun investigating these claims.”
On March 4, 2021, Multnomah County officials announced Barnes’ selection to oversee the launch of Preschool for All, the universal preschool initiative funded by a marginal income tax on high earners. County voters had passed the tax the previous November.
“As a preschool provider, a small business owner, a woman of color, and a public employee, Leslee will be instrumental in leading the rollout of Preschool for All,” said County Chair Jessica Vega Pederson, then a county commissioner, in the announcement. “I’m excited to continue to work with Leslee to bring quality, universal, free preschool to our families.”
Barnes, whose county salary was $151,669 in 2024, was closely involved in the campaign for Preschool for All, an effort to create 11,000 publicly funded child care seats by 2030. Prior to that job, she worked in ODE’s Early Learning Division for 11 months as a policy analyst during some of the same pandemic months that her school raked in Preschool Promise dollars.
“Thinking about my career, pieces of the journey have brought me to this particular point,” Barnes said in 2021. “Part of me always hoped to see things come together like this. Now it’s happening.”
As she moved to the county, Village Childcare continued to receive funds from Preschool Promise, a state program that, unlike Preschool for All, is means tested—that is, only the poorest families can access its seats. (Barnes says she signed a conflict-of-interest disclosure with the county in which she agreed the school would not participate in Preschool for All while she serves in her current role.)
Established in 2015, Preschool Promise serves children ages 3 to 5 whose families earn 200% or less of the federal poverty level, with certain exceptions. It is one of three state preschool programs serving children of low-income parents.
The number of Preschool Promise slots Village Childcare had declined over the years of the pandemic, from 33 in 2020–21, to 20 in 2021–22, to 10 in 2022–23. The preschool never met any of those benchmarks. Instead, it received $464,000 to serve two children, $232,994 to serve four children, and $136,500 to serve three children in those years, respectively.
That means Village Childcare ultimately collected an average of more than $92,000 per child per year. (DELC has not entered into Preschool Promise partnerships with Village Childcare since becoming an agency in July 2023, according to the investigation.)
In response to questions from WW, Barnes placed blame on the nonprofit Early Learning Multnomah, one of 16 Early Learning Hubs around the state that, since 2020, has been responsible for enrollment at Preschool Promise sites. She says she willingly reduced her Preschool Promise slots from 33 to 20 when it was apparent the hub was not finding enrollment for Village Childcare. “DELC was aware of the ongoing issues with the ELM hub,” Barnes adds.
The investigation flagged problems with the hub. “The Hub is critical to a provider’s success in enrolling children,” it reads. “We heard from program staff that Hubs vary in how well they support providers with their enrollment, pointing to significant challenges with the Hub in Multnomah County.” (ELM could not immediately be reached for comment.)
The Secretary of State’s Office issued 13 recommendations for the Oregon Department of Early Learning and Care to improve its administration of Preschool Promise. Three of them related to strengthening what Myers, the Beaverton activist, says was one of his core concerns: Preschool Promise’s reliance on self-reporting.
Providers are required to submit draw reports that outline the expenses they’re being reimbursed for, detailing everything from employee salaries to food and printing. But the audit found little oversight of those expense reports.
“The risk of misreporting is that a grantee could claim expenses above and beyond the necessary costs,” the audit says. “[The] current process requires significant manual effort and has limited automated checks. Data analytics could more efficiently and comprehensively identify noncompliant or high-risk providers.”
Village Childcare also collected money from the Paycheck Protection Program, a federal loan program meant to economically cushion small businesses during the pandemic. The Secretary of State’s Office referred 53 Preschool Promise providers to the Office of the Inspector General at the U.S. Small Business Administration, citing fraud risks of duplicate payments for the same expenses.
On July 23, Read confirmed his office had also referred some preschool providers to the Oregon Department of Justice for criminal investigation. His office would not confirm how many providers it referred or share the identities of those providers.
Myers says the Audits Division investigation was long overdue, and that the waste goes well beyond the secretary of state’s questioned costs, which total $1.4 million. (SOS spokeswoman Tess Seger says the office “did not do a comprehensive review to identify all possible instances of waste or questioned costs, so there could be more or this could be the extent of it.”)
“Money needs to go to the right place, and not just lining the pockets of people who may be well intentioned but aren’t helping kids,” Myers says. “It really genuinely bothers me that you have somebody who’s abusing these programs.”
Correction: This story briefly appeared online with a photo of a person who was not its subject. WW regrets the error.
