Two caregivers at an Anchorage childcare center hit young children and performed 'mock surgeries' as a form of punishment, a damning investigation has revealed.

The Crystal Child Development Center fired the two employees at Lake Otis Parkway on the spot in August following an investigation by authorities.

Anchorage's Child Care Licensing Program first learned of the allegations on July 27, when a parent called to report 'fake surgeries' were happening in a preschool classroom, according to a report.

Distressingly the probe also found that 'boys were required to carry around, eat and sleep with baby dolls,' as a form of punishment in the classroom'.

The Crystal Child Development Center in Lake Otis (pictured) where staff performed 'fake surgeries' that involved using a stapler as a cutting tool to change the sex of the child

Kathy Lynch, the child care licensing program supervisor for the city, said the allegations were serious enough that an inspector went to the child care center immediately.

Two city inspectors, including one trained in forensic interviewing of children, visited the facility three times in the next three weeks, according to a report obtained by Anchorage Daily News.

The inspectors interviewed children, parents and staff members of the facility –which is licensed to care for up to 155 children from 8 weeks old to 6 years old.

The report, dated August 24, revealed that in a pre-kindergarten classroom, a teacher and a teaching assistant conducted 'fake surgeries on the children to turn boys into girls or girls into boys'.

'The surgery includes having the child lay down on (the caregiver's desk) placing tape over the child's mouth, using a stapler like a pretend cutting tool to change the child into the opposite sex,' according to the investigation.

Caregivers in the same classroom also used scissors to 'pretend to cut the child's hair'.

The investigator also found that the same two caregivers hit children.

It was disclosed that children are being 'hit,' 'slapped,' and 'whacked' in the head for misbehaving,' the report added.

Suyeon Yi, the owner and administrator of Crystal Child Development Center, said she hoped the findings will not overshadow the work of the rest of her staff.

She fired the two women when she was presented with the results of the investigation earlier this month.

One of the employees had been working for the center for more than two years.

The other had only been there for about six months. Both were in their 20s or early 30s and were hired with previous experience in child care. Both women passed background checks, Yi said.

Shannon Kuhn, a spokeswoman for the city Department of Health and Human Services, said the investigation categorized the incidents as 'harmful treatment,' which is 'less serious than abuse or neglect' as defined by state law but can include banned forms of discipline.

Two staff at the facility (pictured) were fired for slapping children 'in the head for misbehaving'

The two workers will be marked in a statewide background check system as ineligible to work in Alaska child care facilities.

Despite video monitoring in the classrooms, the on-site manager 'had no idea what was going on' and had not witnessed any of the abuse, Yi said.

Yi said she is heartbroken for the children and worried about how the actions of two employees will reflect on the other caregivers she employs.

The Lake Otis Parkway center is one of Crystal Child Development Center's three locations in Anchorage.

Her centers have operated with relatively few complaints, especially considering the large number of children they care for.

Yi told Anchorage Daily News: 'I want to make sure this one person's mistake doesn't define all the hard work we do here,' Yi said. 'We have almost 60 staff members. They are hard working, day in and day out. I don't want this to damage their reputation.'

After the investigation, Yi was required to submit a 'plan of correction' to fix problems.

She plans new training sessions to teach positive discipline techniques. She also plans to make it easier for employees to report misconduct anonymously to top administrators.