A certified private nursery in Hyogo Prefecture may lose its public funding after it was found to be secretly accepting more children than its designated capacity and surreptitiously cutting costs by serving smaller lunches.

The Wanzu Mazah Hoikuen nursery, in the city of Himeji, has an approved capacity of 46, but it accepted an extra 22 children after signing direct contracts with parents, Himeji officials said Sunday. The nursery cold lose its government support as early as this month.

For officially recognized admissions, fees are determined by the city based on the income of parents. But the nursery set its own criteria and collected monthly fees of ¥20,000 to ¥40,000 each from the parents of the additional 22 children.