States would need to crack down on child care fraud or risk losing federal child care funds; fraudulent providers would be permanently banned from child care and food programs.
This bill would make it mandatory for states to fight child care fraud more aggressively. States that don't meet strict payment accuracy rules could lose federal child care funding. Child care providers found guilty of fraud would be permanently banned from federal child care and food programs. It aims to increase accountability and prevent misuse of funds in programs that help families with child care and nutrition.
Today, the Secretary of Health and Human Services *may* withhold funds from states that don't follow child care grant rules, and there are no mandatory permanent bans for fraudulent providers. This bill would make it *mandatory* for the Secretary to withhold funds from noncompliant states for child care programs and to permanently ban child care providers found to have committed fraud from federal child care and food programs. States would also face new requirements for reporting improper payments and would be subject to corrective action plans and potential funding loss for child care programs if their improper payment rates exceed 5 percent.
HR 7726 · 119th Congress · February 26, 2026 · AI Summary by gemini-2.5-flash · 9/10
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