The Stop Child Care Scams Act of 2026 strengthens federal oversight and enforcement mechanisms to combat fraud in child care assistance programs. The bill requires the Secretary of Health and Human Services to mandatory withhold funds from states that fail to comply with fraud prevention requirements, rather than giving them discretion to do so. It establishes stricter accountability measures for states, including requirements to develop robust internal controls, investigate fraudulent payments, and permanently debar child care providers found guilty of fraud from receiving federal assistance. States with improper payment rates exceeding 5 percent must submit corrective action plans, and those exceeding this threshold for two consecutive years face potential loss of federal funding unless they demonstrate improvement. The legislation also mandates the Government Accountability Office to study fraud prevention practices across early childhood education and child care programs within two years and submit recommendations to Congress, while removing the ability of federal officials to waive sanctions against noncompliant states.
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