Stop Child Care Scams Act of 2026
- Bill Number
- S. 4788
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Families
- Status
- Introduced
- Latest Action
- 2026-06-16: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2026-07-06T18:28:11Z
AI-Generated Summary
Purpose The legislation, titled the "Stop Child Care Scams Act of 2026," aims to strengthen fraud prevention and accountability in the Child Care and Development Block Grant program by requiring stricter enforcement against fraudulent providers and noncompliant states.
Key Provisions
- Mandates that the Secretary of Health and Human Services shall (instead of may) withhold funds from states failing to meet program requirements.
- Requires states to describe in their plans internal controls for program integrity, processes for investigating and recovering fraudulent payments, sanctions for fraud, and eligibility verification procedures, including data sharing across agencies.
- Directs the Secretary to investigate fraud, permanently debar providers found guilty of fraud (via final administrative or judicial determination) from receiving funds, and extend debarment to providers barred from the Child and Adult Care Food Program.
- Defines "final determination of fraud" to include knowingly submitting false statements, misrepresenting services or eligibility, operating without required licensing, or making improper expenditures.
- Sets a 5% improper payment threshold: states exceeding this must submit corrective action plans; two consecutive years above the threshold can result in ineligibility for funds unless progress is shown.
- Requires the Secretary to conduct comprehensive performance reviews of states every three years and designate high-risk states for additional monitoring based on audit findings or repeated noncompliance.
- Applies similar debarment rules to the Child and Adult Care Food Program for fraud.
- Removes the Secretary's authority to waive sanctions for states.
- Directs the Government Accountability Office to study fraud prevention measures across early childhood programs and report recommendations within two years.
- Requires states to include fraudulent payments in overpayment reports and submit annual data on improper payments by category.
Significant Changes to Existing Law
- Converts discretionary withholding of funds to a mandatory requirement under the Child Care and Development Block Grant Act.
- Adds new subsections on fraud determination, debarment, and high-risk monitoring not previously required.
- Establishes automatic consequences for repeated high improper payment rates and eliminates waiver options for sanctions.
- Introduces cross-program debarment between child care and nutrition programs.
Potential Impacts
- Government agencies: Increases federal oversight and monitoring responsibilities, potentially raising administrative costs for the Department of Health and Human Services.
- States: Must enhance internal controls, data systems, and reporting; noncompliant states risk loss of federal child care funding.
- Citizens: May improve program integrity, reducing misuse of funds intended for child care assistance, though stricter rules could affect provider participation.
- International relations: No direct impacts identified.
Main Stakeholders Affected
- State agencies administering child care block grants.
- Child care providers receiving federal assistance.
- The Department of Health and Human Services and its Secretary.
- The Government Accountability Office.
- Families and children using subsidized child care services.
Notable Legal, Constitutional, or Political Implications
- Strengthens federal enforcement authority over state programs, potentially raising questions about federalism and state flexibility in program administration.
- Introduces permanent debarment as a new penalty, which could affect due process considerations for providers facing fraud determinations.
- Requires detailed state plans and monitoring, which may increase compliance burdens without altering core constitutional allocations of power.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-06-16: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2026-06-16: Introduced in Senate
Bill Versions
- Stop Child Care Scams Act of 2026 — issued 2026-06-16 — PDF (13 pages)