Stop Child Care Scams Act of 2026

The bill's title changed from 'No Funds for Repeat Child Care Violations Act' to 'Stop Child Care Scams Act of 2026,' signaling a shift from a narrow funding-withholding measure to a broad anti-fraud framework.

States must now include in their CCDBG plans descriptions of internal controls for program integrity, processes to investigate and recover fraudulent payments, sanction procedures, eligibility verification methods, and how they use data across state and local agencies with oversight of child care providers.

The Secretary is required to investigate fraud in the CCDBG program and must permanently debar any provider against whom a final determination of fraud is made. A 'final determination of fraud' is defined to include knowingly submitting false statements, misrepresenting ownership or enrollment, operating without a state license, making improper expenditures, or other conduct constituting fraud under federal or state law.

Cross-program debarment was established: providers debarred from the Child and Adult Care Food Program are automatically permanently debarred from CCDBG, and vice versa. This creates a unified enforcement mechanism across both programs.

The Secretary must conduct a comprehensive review of each state's performance at 3-year intervals and can designate states as 'high risk' based on unresolved audit findings, repeated failures to carry out corrective action plans, or noncompliance with state plans. High-risk states are subject to additional monitoring.

The Secretary's authority to waive sanctions imposed on states was eliminated across multiple provisions, making sanctions mandatory and non-discretionary.

If a state's improper payment rate exceeds 5 percent for a fiscal year, it must submit a corrective action plan. If the rate exceeds 5 percent for two consecutive fiscal years, the state becomes ineligible to receive CCDBG funds unless it demonstrates it will reduce the rate or make significant progress on its corrective action plan.

A GAO study is required to examine fraud prevention measures in Head Start, the Child and Adult Care Food Program, and CCDBG, with a report due within 2 years of enactment containing findings and regulatory or legislative recommendations.

The definition of overpayments under CCDBG now explicitly includes fraudulent payments, and states must submit annual reports disaggregating improper payments into categories: suspected and verified fraudulent payments, non-fraudulent overpayments, underpayments, and technically improper payments.