[House Report 119-593]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 119-593
======================================================================
CLOSING THE PROVIDER FRAUD GAP ACT OF 2026
_______
April 6, 2026.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Walberg, from the Committee on Education and Workforce, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 7677]
The Committee on Education and Workforce, to whom was
referred the bill (H.R. 7677) to require the Comptroller
General of the United States to conduct a study regarding fraud
prevention measures in certain Federal early childhood
education, child care, and child nutrition programs, and for
other purposes, having considered the same, reports favorably
thereon with an amendment and recommends that the bill as
amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Closing the Provider Fraud Gap Act of
2026''.
SEC. 2. GAO STUDY AND REPORT ON PROVIDER-RELATED FRAUD.
(a) Study.--The Comptroller General of the United States shall
conduct a study regarding fraud prevention measures in Federal early
childhood education, child care, and child nutrition programs that
shall include an analysis of--
(1) the effectiveness of procedures and measures to prevent
fraud carried out by providers of services under such programs;
(2) whether the data the Federal Government receives in
connection with such programs (including through audits and
reporting requirements) is--
(A) sufficient to successfully identify fraud carried
out under such programs; and
(B) used effectively by the Federal Government to
identify potential fraud carried out under such
programs; and
(3) with respect to the Child Care and Development Block
Grant program established under the Child Care and Development
Block Grant Act of 1990 (42 U.S.C. 9857 et seq.)--
(A) the program integrity results for States that
have delegated responsibilities related to program
management and administration to counties, local
municipalities, or other entities; and
(B) whether any corrective action plans have been
implemented by States to improve program integrity
results, including any measurable outcomes from
implementing such a corrective action plan.
(b) Report.--Not later than 2 years after the date of enactment of
this section, the Comptroller General of the United States shall submit
to the Committee on Education and Workforce of the House of
Representatives and the Committee on Health, Education, Labor, and
Pensions of the Senate a report containing--
(1) the results of the study conducted under subsection (a);
and
(2) any regulatory or legislative recommendations to improve
fraud prevention measures in Federal early childhood education,
child care, and child nutrition programs.
(c) Federal Early Childhood Education, Child Care, and Child
Nutrition Programs Defined.--For the purposes of this section, the term
``Federal early childhood education, child care, and child nutrition
programs'' includes--
(1) Head Start programs (including Early Head Start programs)
carried out under the Head Start Act (42 U.S.C. 9831 et seq.);
(2) the Child and Adult Care Food Program under section 17 of
the Richard B. Russell National School Lunch Act (42 U.S.C.
1766); and
(3) the Child Care and Development Block Grant program
established under the Child Care and Development Block Grant
Act of 1990 (42 U.S.C. 9857 et seq.).
PURPOSE
The purpose of H.R. 7677, the Closing the Provider Fraud
Gap Act of 2026, is to instruct the Government Accountability
Office (GAO) to do a holistic report on fraud prevention
measures in the Child Care and Development Block Grant (CCDBG)
program, the Child and Adult Care Food Program (CACFP), and
Head Start where providers are involved.
COMMITTEE ACTION
119TH CONGRESS
First Session--Hearing
On June 24, 2025, the Committee on Education and Workforce
Subcommittee on Early Childhood, Elementary, and Secondary
Education held a hearing titled ``Child Care and the American
Workforce: Removing Barriers to Economic Growth.'' The purpose
of the hearing was to examine the CCDBG program as a worker
support program and consider reforms to support existing child
care providers, continue to provide high-quality care to
children, uphold the value and dignity of work to parents, and
make fiscally responsible choices, including public-private
partnerships. Testifying before the Subcommittee were Mrs.
Caitlin Codella Low, Managing Director of Human Capital,
Bipartisan Policy Center, Washington, D.C.; The Honorable Todd
D. Barton, Mayor, City of Crawfordsville, Crawfordsville,
Indiana; Dr. Ruth Friedman, Senior Fellow, The Century
Foundation, Washington, D.C.; and Ms. Celia Hartman Sims,
President and Founder, The Abecedarian Group, Houston, Texas.
Second Session--Hearing
On January 13, 2026, the Committee on Education and
Workforce Subcommittee on Early Childhood, Elementary, and
Secondary Education held a hearing titled ``Who's Watching the
Kids? How Employers, Innovators, and Parents Are Solving
America's Child Care Crunch.'' The purpose of the hearing was
to examine the national child care landscape, including those
aspects governed by CCDBG, and consider fiscally responsible
ways to meet the American workforce's child care needs. At the
hearing, Representative Kevin Kiley (R-CA) stated, ``Protecting
the integrity of child care funding is essential. When bad
actors exploit the system, they divert resources from the
families these programs are meant to serve. Recent events
underscore the need for strong oversight and accountability at
every level.'' Testifying before the Subcommittee were Mr.
Haden Polseno-Hensley, President and Co-Founder, Red Rooster
Coffee Company, LLC, Floyd, Virginia; Ms. Alex Grover, Chief
Executive Officer, i2M, Mountain Top, Pennsylvania; Ms. Amy K.
Matsui, Vice President for Child Care and Income Security,
National Women's Law Center, Washington, D.C.; and Ms. Mary Lou
Burke Afonso, Chief Operating Officer, Bright Horizons, Newton,
Massachusetts.
Legislative Action
On February 25, 2026, Representative Burgess Owens (R-UT)
introduced H.R. 7677, the Closing the Provider Fraud Gap Act.
On March 5, 2026, the Committee on Education and Workforce
considered H.R. 7677 in legislative session and reported it
favorably, as amended, to the House of Representatives by a
recorded vote of 35-0. The Committee considered the following
amendments to H.R. 7677:
1. Representative Owens offered an amendment in the
nature of a substitute to make a technical change to
the bill. The amendment passed by voice vote.
2. Representative John Mannion (D-NY) offered an
amendment to add elements to the report related to
federal spending increases and underlying child care
costs. The amendment failed by a vote of 15-20.
COMMITTEE VIEWS
INTRODUCTION
Child care is essential to helping working parents thrive
and to supporting the growth of local economies. CCDBG exists
to help working families access affordable child care, giving
them the freedom to remain in the workforce, increase their
economic opportunity, realize financial freedom, and move
beyond the need for a federal safety net--thriving independent
of government support. According to the National Center for
Education Statistics, there are approximately 12.6 million
children nationally who have nonparental care arrangements
during the week.\1\ Because CCDBG serves approximately 10
percent of children in that private-sector child care market,
all of whom come from low-income families, any waste, fraud,
and abuse in the program is untenable. The Committee considered
H.R. 7677 to deliver accountability and transparency in our
federal child care assistance program.
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\1\https://nces.ed.gov/fastfacts/display.asp?id=4.
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Waste, Fraud, and Abuse Unchecked at the State Level
On December 26, 2025, an independent journalist reported a
number of child care centers licensed by Minnesota were taking
federal funds through CCDBG without serving any children or
families. Certain administrative mismanagement of Minnesota's
child care program had been documented in an HHS Inspector
General report months prior\2\ and in an internal controls
review made by the Minnesota Office of the Legislative Auditor
in 2019.\3\ Essentially admitting responsibility, on February
26, 2026, Minnesota Governor Tim Walz announced a
``comprehensive anti-fraud package to fight fraud in state
programs''\4\ and the Minnesota Office of Program Integrity
released a related ``roadmap'' days earlier.\5\ In fact,
testifying at a House Committee on Oversight hearing on March
4, 2026, Governor Walz admitted that Minnesota had been aware
of fraud in its child care assistance program since 2012.
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\2\https://oig.hhs.gov/reports/all/2025/minnesota-could-better-
ensure-that-childcare-assistance-providers-comply-with-attendance-
requirements/.
\3\https://www.auditor.leg.state.mn.us/sreview/ccapic.pdf.
\4\https://mn.gov/governor/newsroom/press-releases/?id=1055-727986.
\5\https://kstp.com/wp-content/uploads/2026/02/Roadmap-to-Program-
Integrity-and-Fraud-
Prevention-2-23-2026.pdf.
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Since 2002, CCDBG has been identified as a program at risk
of significant improper payments. The Office of Management and
Budget first identified CCDBG as such following enactment of
the Improper Payment Act of 2002 (P.L. 107-300).\6\ A series of
subsequent measures aimed at waste, fraud, and abuse prevention
in programs across the federal government have failed to
eliminate improper payments in CCDBG.\7\ A 2020 report by the
Government Accountability Office estimated that improper
payments in CCDBG during the previous fiscal year (FY 2019)
totaled approximately $325 million.\8\ Extrapolating that
number out to include the current funding level and average
improper payment rates, CCDBG could be losing nearly $600
million each year to improper payments. Most recently, HHS
continued to include CCDBG on its list of ``risk susceptible''
programs in the agency's FY 2025 financial report.\9\
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\6\https://georgewbush-whitehouse.archives.gov/omb/circulars/a11/
2002/part2.pdf.
\7\Those include the Improper Payment Information Act of 2002 (P.L.
112-248), the Improper Payments Elimination and Recovery Act of 2010
(P.L. 111-204), the Improper Payments Elimination and Recovery
Improvement Act of 2012 (112-248), and the Payment Integrity
Information Act of 2019 (P.L. 116-117).
\8\https://www.gao.gov/assets/gao-20-227.pdf.
\9\https://www.hhs.gov/sites/default/files/fy-2025-hhs-agency-
financial-report.pdf.
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The Need for Sensible Reforms to Protect Taxpayer Dollars
The federal government is right to scrutinize state CCDBG
funds because of the risk that those dollars are being
fraudulently diverted from American families. States' failures
to ensure their programs are complying with statutory
requirements are harming our nation's families. We owe it to
our working families to exercise sufficient oversight and hold
fraudsters accountable.
CCDBG, CACFP, and Head Start are three of several public
assistance programs in which taxpayer dollars flow directly to
providers. Programs like these not only support families' needs
but they also support the workforce that drives economic
opportunity. Since 2002, the Office of Management and Budget
has identified CCDBG as a program at risk of significant
improper payments. Head Start and CACFP share that precarious
position. While some improvements and protections have been
made and while millions of children have been served over those
intervening 25 years, more can be done. H.R. 7677, the Closing
the Provider Fraud Gap Act of 2026, directs the Government
Accountability Office (GAO) to report on the effectiveness of
fraud prevention measures in early childhood education and care
grant programs under this Committee's jurisdiction and give
recommendations for improvement.
CONCLUSION
No amount of fraud in public programs is acceptable. When
states administer federal programs, we expect a diligent effort
to execute what the law requires. Americans should have
confidence that their taxpayer dollars are funding critical
child care assistance for families in need, not enriching those
seeking to loot public programs for private gain. H.R. 7677
accomplishes this by commissioning a report that will explore
weaknesses in the current administration of federal assistance
programs where providers are involved to better inform future
fraud prevention efforts.
Weeding out waste, fraud, and abuse in federal child care
assistance will ensure public trust in CCDBG and allow for more
dollars, economic opportunity, and workforce participation
among America's families.
SUMMARY
H.R. 7677 SECTION-BY-SECTION SUMMARY
Section 1. Short title
States that this Act may be cited as the Closing
the Provider Fraud Gap Act.
Section 2. GAO study and report on provider-related fraud
GAO is required within two years to conduct a
study on the effectiveness of fraud prevention efforts in
CCDBG, CACFP, and Head Start carried out by providers.
The study must analyze whether data received
through program audits and reports is sufficient and effective
to identify fraud
EXPLANATION OF AMENDMENTS
The amendments, including the amendment in the nature of a
substitute, are explained in the body of this report.
APPLICATION OF LAW TO THE LEGISLATIVE BRANCH
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. H.R. 7677 requires GAO to complete a study of provider-
related fraud in various federal programs. H.R. 7677 thus
applies to the legislative branch in this regard.
UNFUNDED MANDATE STATEMENT
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee traditionally adopts as
its own the cost estimate prepared by the Director of the
Congressional Budget Office (CBO) pursuant to section 402 of
the Congressional Budget and Impoundment Control Act of 1974.
The Committee reports that because this cost estimate was not
timely submitted to the Committee before the filing of this
report, the Committee is not in a position to make a cost
estimate for H.R. 7677.
EARMARK STATEMENT
H.R. 7677 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of House rule XXI.
ROLL CALL VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
In accordance with clause (3)(c) of rule XIII of the Rules
of the House of Representatives, the goal of H.R. 7677 is to do
a holistic report on fraud prevention measures in the Child
Care and Development Block Grant (CCDBG) program, the Child and
Adult Care Food Program (CACFP), and Head Start where providers
are involved.
DUPLICATION OF FEDERAL PROGRAMS
No provision of H.R. 7677 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the body of this report.
REQUIRED COMMITTEE HEARING
In compliance with clause 3(c)(6) of rule XIII of the Rules
of the House of Representatives, the following hearing held
during the 119th Congress was used to develop or consider H.R.
7677: On June 24, 2025, the Committee on Education and
Workforce Subcommittee on Early Childhood, Elementary, and
Secondary Education held a hearing titled ``Child Care and the
American Workforce: Removing Barriers to Economic Growth.''
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 7677.
However, clause 3(d)(2)(B) of that rule provides that this
requirement does not apply when, as with the present report,
the Committee has requested a cost estimate for the bill from
the Director of the Congressional Budget Office.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 7677, as reported by the Committee, makes no changes
to existing law.
MINORITY VIEWS
INTRODUCTION
H.R. 7677, the Closing the Provider Fraud Gap Act,
introduced by Rep. Burgess Owens (R-UT), requires the
Government Accountability Office (GAO) to conduct a study
regarding fraud prevention measures in federal early childhood
education, child care, and child nutrition programs, including
Head Start, the Child and Adult Care Food Program (CACFP), and
Child Care and Development Block Grant (CCDBG). While Committee
Democrats do not oppose this bill, it is clear its
consideration is part of a broader attempt to sideline the
problems facing child care in American and manufacture an
alternative narrative.
REPUBLICANS REFUSE TO FOCUS ON THE CHILD CARE CRISIS ACTUALLY AFFECTING
AMERICAN FAMILIES
Child care is a necessity for millions of American
families.\1\ In many parts of the country, the cost of child
care, when families can find it, can be as much as, or more
than their rent or mortgage payments.\2\ In many communities,
child care simply does not exist in sufficient supply to meet
demand.\3\ As a direct result, our economy loses an estimated
$122 billion in earnings, productivity, and revenue every
year.\4\ This is not a personal failure on the part of parents
or providers--it is a market failure that demands a policy
response. The Child Care and Development Block Grant (CCDBG) is
a federal program designed to provide child care assistance to
low-income families and is administered through block grants to
states.\5\ CCDBG funds, along with other federal funds not
under the jurisdiction of this Committee, make up the Child
Care Development Fund (CCDF), the largest federal source of
child care funding.\6\ Yet, according to the most recent
publicly available information, federal child care funds cover
only about 15 percent of federally eligible children.\7\
Assuming that Congress provided sufficient resources cover the
remaining 85% of eligible children, that would still leave many
families--who are not eligible for the program--with the burden
of unaffordable or unavailable child care.
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\1\Fact Sheet: Child Care and the Economy, First Five Years Fund
(Mar. 6, 2026), https://www.ffyf.org/2024/03/06/fact-sheet-child-care-
and-the-economy/.
\2\Child Care Aware of America, ``Annual Child Care Landscape
Analysis'', https://www.childcareaware.org/price-landscape24/ (last
visited Jan. 28, 2026).
\3\See U.S. Child Care Deserts, Ctr. for Am. Prog., https://
childcaredeserts.org/ (last visited Mar. 13, 2026).
\4\How a Lack of Affordable Child Care Impacts the Economy, First
Five Years Fund (Mar. 13, 2025), https://www.ffyf.org/resources/2025/
03/how-a-lack-of-affordable-child-care-impacts-the-economy/.
\5\Nina Chien, Estimates of Child Care Subsidy Eligibility &
Receipt for Fiscal Year 2021, Off. of Hum. Svcs Pol'y (Sep. 11, 2024),
https://aspe.hhs.gov/sites/default/files/documents/
a91fd97aa80b53fa52a52d38cd323509/cy2021-child-care-subsidy-
eligibility.pdf.
\6\Rebecca Daugherty, Child Care and Development Fund: CCDBG and
CCES, Explained, Bipartisan Pol'y Ctr. (Feb. 24, 2025) https://
bipartisanpolicy.org/explainer/child-care-and-
development-fund-ccdbg-cces/.
\7\Chien, supra note 5, at 1.
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In response to this reality, Committee Democrats have
championed legislation focused on increasing the federal
investment in child care. Specifically, this Congress, Ranking
Member Robert C. ``Bobby'' Scott (D-VA) re-introduced H.R.
4418, the Child Care for Working Families Act.\8\ The Child
Care for Working Families Act would tackle the child care
crisis head-on: ensuring families can afford the child care
they need, expanding access to more high-quality options,
stabilizing the child care sector, and helping ensure child
care workers taking care of our nation's kids are paid livable
wages. The bill provides grants to states to help expand the
supply and capacity of eligible child care providers and aims
to provide working families a range of high-quality, affordable
child care options, in a variety of settings, that meet their
unique needs, with no family paying more than seven percent of
their income for child care costs.
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\8\H.R. 4418, 119th Cong. (2025).
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H.R. 4418 would promote the stability of the child care
sector by providing a source of stable funding to eligible
child care providers to help offset their operating expenses.
It would support sustained and increased wages for early
childhood educators or other staff eligible providers, in order
to stabilize and grow the child care workforce. It would
support access to child care services for communities facing a
particular shortage of child care options, including child care
services for infants and toddlers, child care services during
nontraditional or extended hours, and inclusive child care
services for children with disabilities. Language similar to
H.R. 4418 was included in the Build Back Better Act, which
passed the House in November 2021.\9\
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\9\H.R. 5376 Sec. 23001, 117th Cong. (as passed by House, Nov. 19,
2021).
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Instead of working to fix the child care supply and demand
issue, the Trump Administration's actions have only created
additional uncertainty for the child care sector, parents, and
children.\10\ Almost immediately after President Trump took
office in January 2025, the Office of Management and Budget
announced that it was directing federal agencies to
``temporarily pause all activities related to obligation or
disbursement of all Federal financial assistance . . .''.\11\
This funding pause was later rescinded,\12\ but it initially
caused significant confusion and consternation among federal
fund recipients in the child care community. These recipients
are overwhelmingly non-profit organizations which generally
operate with no more than a few days of reserve funds.\13\
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\10\Hailey Gibbs & Casey Peeks, Trump's Attack on Child Care
Funding Undermines Early Educators, Shortchanges Children, and
Increases Costs for Families, Ctr. for Am. Prog. (Jan. 12, 2026),
https://www.americanprogress.org/article/trumps-attack-on-child-care-
funding-undermines-early-educators-shortchanges-children-and-increases-
costs-for-families/.
\11\Read the Memo Pausing Federal Grants and Loans, N.Y. Times
(Jan. 27, 2026), https://www.nytimes.com/interactive/2025/01/27/us/omb-
memo.html.
\12\New Administration Highlights: Freeze on Federal Funds
Rescinded, and Trump Signs Law to Ease Path to Deportations, N.Y.
Times, https://www.nytimes.com/live/2025/01/29/us/trump-
federal-freeze-funding-news?smid=url-share#federal-freeze-grants (last
updated Nov. 18, 2025).
\13\Press Release, Child Care Aware of America, Child Care Aware of
America Reacts to Federal Funding Pause (Jan. 28, 2026), https://
info.childcareaware.org/media/child-care-aware-of-america-reacts-to-
federal-funding-freeze.
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Further, the Trump Administration has undermined Department
of Health and Human Services staff, specifically those
responsible for administering CCDF and providing support to
states administering CCDBG and related programs. As the Center
for Law and Social Policy summarized the issue,
[p]robationary staff at the Office of Head Start (OHS)
and the Office of Child Care (OCC) were laid off in
February, resulting in a reduction of approximately 20
percent of staff. This was followed by the mass layoffs
announced on April 1, resulting in an overall reduction
of 40-50 percent of staff in OHS and OCC and the
closure of five regional offices, which provided
training and technical assistance, administrative
support in ensuring grants reached facilities, and
served as a liaison between program administrators and
the federal government. These offices in Boston,
Chicago, New York, San Francisco, and Seattle oversaw
grantees in 23 states and five territories, and
comprised half of the total regional offices across the
country.\14\
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\14\Shira Small, Federal Cuts to Child Care and Head Start are an
Attack on Families with Low Incomes, Ctr. on L. & Soc. Pol'y (Apr. 23,
2025), https://www.clasp.org/blog/federal-cuts-child-care-head-start/.
Regrettably, the Majority has followed this
Administration's lead. Instead of considering bills to help
address the crisis by increasing the supply of child care,
making child care more affordable, or increasing the wages of
child care workers, the Committee considered H.R. 7677 and
seven other bills to address alleged and unproven widespread
fraud in the child care sector.\15\ None of these bills will
create one more additional child care slot. Instead, these
bills complement each other by throwing sand into the gears of
CCDF, increasing the chances that states will be capriciously
disqualified from federal child care assistance not due to
widespread fraud, but non-compliance with red tape.
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\15\H.R. 7720, the Child Care Payment Integrity and Fraud
Accountability Act, H.R. 7721, Combating Regulatory Abuse, Closing
Known Deficiencies, and Overseeing Waste Nationwide (CRACKDOWN) Act,
H.R. 7722, Child Care Integrity Monitoring Act, H.R. 7723, Safeguarding
Taxpayer Dollars in Child Care Act, H.R. 7724, No Waivers for Fraud
Act, H.R. 7725, Stop Child Care Fraud Act, H.R. 7677, Closing the
Provider Fraud Gap Act, and H.R. 7726, No Funds for Repeat Child Care
Violation Act Before the H. Comm. on Educ. & Workforce, 119th Cong.
(Mar. 5, 2026).
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THE MAJORITY SEEKS TO UPEND THE EXISTING CHILD CARE SYSTEM OVER
UNPROVEN ALLEGATIONS OF WIDESPREAD FRAUD
National Attention on Alleged Widespread Fraud in Child Care
In late December 2025, a publicly posted video surfaced
that purported to show ``proof'' that several day care centers
in Minnesota were committing fraud. The video alleged these
centers were taking federal child care funds, administered
through the state, without actually caring for children.\16\
Despite the fact that the Minnesota agency administering CCDF
found that the child care centers were operating as expected at
the time of the video,\17\ some media outlets and Republican
officials brought national attention to the story.\18\ The
Trump Administration then announced an immediate freeze on all
child care funds to Minnesota\19\ and engaged its ``Defend the
Spend'' system nationwide--requiring grantees to provide
detailed documentation and proof of payment before receiving
reimbursement for all funds distributed through the
Administration for Children and Families at the Department of
Health and Human Services (HHS).\20\ Soon thereafter, HHS
announced suspension of five states' access to nearly $10
million through CCDF, the Temporary Assistance for Needy
Families, and the Social Services Block Grant.\21\ HHS provided
no evidence of fraud in these five states--California,
Colorado, Illinois, Minnesota, and New York--beyond the fact
they are led by Democratic Governors. HHS claims this action
was taken due to ``concerns about widespread fraud and misuse
of taxpayer dollars in state-administered programs'' and
concerns that these funds may have gone to those not eligible
due to their immigration status.\22\ Thankfully, courts have
blocked this funding freeze\23\ but it is extremely concerning
that the Administration sought to punish states without proof
of such allegations.
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\16\Ken Bensinger & Ernesto Londono, An Intense White House
Response From a Single Viral Video, N.Y. Times (Dec. 31, 2025), https:/
/www.nytimes.com/2025/12/31/business/media/trump-conservatives-videos-
viral-loop.html.
\17\Phil Helsel & Julia Ainsley, Minnesota department finds child
care centers targeted in viral video operating normally, NBC News (Jan.
2, 2026), https://www.nbcnews.com/news/us-news/minnesota-department-
finds-child-care-centers-targeted-viral-video-ope-rcna252013.
\18\Bensinger & Londono, supra note 16.
\19\Id.
\20\Sakshi Venkatraman & Max Matza, Trump administration says it's
withholding childcare funds from Minnesota amid fraud allegations, BBC
(Dec. 30, 2025), https://www.bbc.com/news/articles/c75xnndvlyko.
\21\Press Release, U.S. Dep't of Health & Hum. Svcs., HHS Freezes
Child Care and Family Assistance Grants in Five States for Fraud
Concerns (Jan 6, 2026), https://www.hhs.gov/press-room/hhs-freezes-
child-care-family-assistance-grants-five-states-fraud-concerns.html.
\22\Id. (emphasis added).
\23\Minho Kim & Zach Montague, Judge Extends Block on Trump
Officials Slashing Funds to Democratic States, N.Y. Times (Feb. 6,
2026), https://www.nytimes.com/2026/02/06/us/politics/blue-states-
trump-funding-lawsuit.html.
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Unfortunately, it is under the same unproven allegations
and general theories of ``widespread fraud'' that the Majority
chose to consider eight bills purporting to address fraud in
CCDBG.\24\ Like the Administration, the Majority did not
produce any evidence of widespread fraud in the program,
presenting only vague and unfounded allegations. Similarly, the
Majority has chosen not to engage with (or even meaningfully
acknowledge) the processes HHS already has in place, as
required by law, charging states to prevent and catch fraud.
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\24\Press Release, Committee on Education & Workforce Republicans,
Chairman Walberg Delivers Opening Statement at Markup to Crackdown on
Child Care Fraud (Mar 5, 2026), https://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=413157.
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Existing Program Integrity Requirements
Generally, federal agencies must protect against improper
payments in grant programs. The Payment Integrity Information
Act of 2019 (PIIA) requires Executive Branch agencies to
determine if improper payment rates for programs have exceeded
significant thresholds.\25\ Agencies are considered
noncompliant if any relevant program has an ``improper payment
rate'' of more than 10 percent.\26\ Improper payments include
any payment made for an incorrect amount, to an ineligible
recipient, or for an ineligible service. In the context of
federal child care funds, an example of an improper payment
would be a payment to a provider that was made in an incorrect
amount (overpayment or underpayment) or that should not have
been made at all.\27\ However, the term ``improper payments''
does not automatically denote ``fraud''. As stated in a
Government Accountability Office Q&A report to the House
Appropriations Committee, ``[w]hile all fraudulent payments are
considered improper, not all improper payments are due to
fraud.''\28\ PIIA directs federal agencies to, at least every
three years, assess their programs to consider factors that may
increase the risk of improper payments, including their
susceptibility to fraud.\29\
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\25\31 U.S.C. Sec. 3352. The statute defines significant as either
$10 million and 1.5 percent of total program outlays or $100 million
overall. Id.
\26\31 U.S.C. Sec. 3351.
\27\See, e.g., 45 C.F.R. Sec. 98.100(d).
\28\U.S. Gov't Accountability Off., GAO-24-107482, Improper
Payments: Key Concepts and Information on Programs with High Rates or
Lacking Estimates 5 (2024), https://www.gao.gov/
assets/gao-24-107482.pdf.
\29\31 U.S.C. Sec. 3352.
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HHS generally assesses states' compliance with law and
regulations through its review and approval of a state's CCDF
plan, which ``serves as the Lead Agency's [the agency in a
state or territory that administers the CCDF program]
application for a three-year cycle of CCDF funds and is the
primary mechanism OCC uses to determine Lead Agency compliance
with the requirements of CCDBG and its regulations''.\30\ In
its review of the plan, HHS can identify places where a state
is out of compliance and provides a state with the opportunity
to address the particular issue or face penalties.\31\
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\30\FY 2025-2027 Child Care and Development Fund (CCDF) Plan for
States and Territories, Off. of Child Care, https://acf.gov/occ/policy-
guidance/fy-2025-2027-ccdf-plan-states-and-
territories-ccdf-acf-pi-2024-01 (last updated July 15, 2024).
\31\Id.
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More specifically, the CCDBG Act and its regulations
already provide HHS with enforcement authority to ensure that
states are complying with the program's requirements. For
example, the law gives HHS the authority to ensure states
``comply substantially'' with the law.\32\ Further, ``after
reasonable notice to a State and opportunity for a hearing'',
HHS may disallow improperly spent funds, deduct improperly
spent funds from subsequent allotments, take some combination
of the those actions, or impose other sanctions.\33\
Regulations make clear HHS ability to monitor these programs
for compliance with law and addresses the process HHS and
states may take when a ``review or investigation reveals
evidence'' that a state's child care agency or ``an entity
providing services under contract or agreement with'' a lead
agency has ``failed to substantially comply'' with the law,
regulations, or provisions and requirements set out in the
state's plan.\34\ It is also worth noting that law and
regulation require states to arrange independent audits of
their programs and require states to repay the federal
government for funds that are found to be misspent or HHS can
deduct these amounts from future payments to the state.\35\
These are examples of ways the law and regulation aim to
provide for program integrity.
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\32\E.g., 42 U.S.C. Sec. 9858g(b)(2).
\33\Id.
\34\45 C.F.R. Sec. 98.90.
\35\CCDBG Act Sec. 658K(b), 42 U.S.C. Sec. 9858i; 45 C.F.R.
Sec. 98.65.
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Additionally, as the Government Accountability Office (GAO)
noted in 2020, ``[the Office of Child Care (OCC) at HHS]
oversees states'' improper payment risks through a process that
includes a requirement for states to submit corrective action
plans (CAP) when they estimate their annual payment error [or
improper] rates are at or above 10 percent.''\36\ Additionally,
OCC conducts on-site monitoring reviews of each state for each
three-year period.\37\ HHS recently began the practice of
posting oversight reports resulting from these visits.\38\
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\36\U.S. Gov't Accountability Off., GAO-20-227, Office of Child
Care Should Strengthen Its Oversight and Monitoring of Program-
Integrity Risks, (2020), https://www.gao.gov/assets/gao-20-227-
highlights.pdf.
\37\FFY 2025-2027 CCDF Federal Onsite Monitoring & Oversight
Visits, Off. of Child Care, https://acf.gov/occ/report/ffy-2025-2027-
monitoring-reports-oversight-visits (last updated Mar. 2, 2026).
\38\Id.
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Changes have been made over the years to improve program
integrity. For example, in 2020, GAO published a report
entitled ``Child Care and Development Fund: Office of Child
Care Should Strengthen Its Oversight and Monitoring of Program-
Integrity Risks'' that explained the need for HHS to assess
fraud risks to the fund and highlighted nine recommendations to
better protect the integrity of the fund.\39\ GAO later
indicated that HHS had addressed all nine of these
recommendations.\40\ However, regardless of any recent
improvements that have been made, the Trump Administration's
reductions-in-force in 2025 did nothing to improve program
integrity as fewer staff were now available to help monitor the
program.
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\39\U.S. Gov't Accountability Off., supra note 36.
\40\Id.
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Misuse of Federal Child Nutrition Funds
The Child and Adult Care Food Program (CACFP) and the
Summer Food Service Program (SFSP) were instrumental in feeding
children across the country during the COVID-19 public health
emergency. Pursuant to bipartisan legislation signed into law
by President Trump in his first term, the U.S. Department of
Agriculture (USDA) waived various program requirements during
this time, allowing school districts and nonprofits to operate
SFSP and CACFP under pandemic-related flexibilities.\41\ These
bipartisan backed flexibilities allowed for off-site food
distribution and waived on-site monitoring requirements.\42\
During that time, off-site feeding programs supported youths'
access to food in complementary ways when U.S. schools were
closed during the COVID-19 pandemic from March to June
2020.\43\ In a series of virtual interviews with program
directors from 21 states, state directors reported that the
waivers allowed child care providers to feed children despite
closures or limited enrollment.\44\
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\41\Randy Alison Aussenberg et al., Cong. Rsrch. Serv., R46681,
USDA Nutrition Assistance Programs: Response To The Covid-19 Pandemic
(2023), https://crsreports.congress.gov/product/pdf/R/R46681.
\42\U.S. Dep't of Ag., Food & Nutrition Serv., Child Nutrition
Program Operations During the COVID-19 Pandemic--July 2021 through
September 2022, (Mar. 19, 2026), https://www.fns.usda.gov/research/
school-meals/program-operations/sy2021-22.
\43\Erica Kenney et al., Costs, Reach, and Benefits of COVID-19
Pandemic Electronic Benefit Transfer and Grab-and-Go School Meals for
Ensuring Youths' Access to Food During School Closures, JAMA Network
Open (Aug., 2022), https://jamanetwork.com/journals/jamanetworkopen/
fullarticle/2795795.
\44\Dipti A. Dev, et al. Implementation of Federal Waivers for
Feeding Children in Early Care and Education During the COVID-19
Pandemic, NIH National Libr. of Medicine: National Ctr. for
Biotechnology Info., (2022), https://pmc.ncbi.nlm.nih.gov/articles/
PMC9537749/.
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Nutrition programs were not uniquely susceptible to fraud;
like many other pandemic relief programs, bad actors took
advantage of oversight flexibility to attempt to defraud
federal programs.\45\ Under the Biden Administration, the
Department of Justice announced federal criminal charges
against individuals associated with Feeding Our Future\46\--a
Minnesota-based nonprofit organization that misused federal
child nutrition funds during the COVID-19 pandemic. Over 78
people have been charged so far with crimes in the scheme, with
many already receiving convictions.\47\ Throughout the federal
investigation,the Minnesota Department of Education and the
State Attorney General's office worked closely together and
cooperated with federal investigators.\48\
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\45\E.g., Where did all the covid aid money go?, Wash. Post (Sept.
8, 2022), https://www.washingtonpost.com/business/interactive/2022/
covid-money-trail-investigation-explained/.
\46\Press Release, U.S. Dep't of Justice, U.S. Attorney Announces
Federal Charges Against 47 Defendants in $250 Million Feeding Our
Future Fraud Scheme (Sept. 20, 2022), https://www.justice.gov/archives/
opa/pr/us-attorney-announces-federal-charges-against-47-defendants-250-
million-feeding-our-future.
\47\Press Release, U.S. Attorney's Office for the District of
Minnesota, 78th Defendant Charged in Feeding Our Future Fraud Scheme,
U.S. Dep't of Justice (Nov. 24, 2025), https://www.justice.gov/usao-mn/
pr/78th-defendant-charged-feeding-our-future-fraud-scheme.
\48\Off. of the Legislator Auditor, Minnesota Department of
Education: Oversight of Feeding Our Future, 105-109 (June 2024),
https://www.auditor.leg.state.mn.us/sreview/pdf/2024-mdefof.pdf;
Oversight of Fraud and Misuse of Federal Funds in Minnesota: Part II:
Hearing Before the Comm. on Oversight and Gov't Ref., 119th Cong. 5-6
(Mar. 4, 2026) (Statement of Tim Walz, Governor), https://
oversight.house.gov/wp-content/uploads/2026/03/Walz-Written-
Testimony.pdf; Press Release, The Off. of Minnesota Att'y Gen. Keith
Ellison, For Two Years Attorney General Ellison's Office Has Held
Feeding Our Future Accountable (Sept. 26, 2022), https://
www.ag.state.mn.us/Office/Communications/2022/09/
26_FeedingOurFuture.asp.
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While there was genuine and egregious fraud committed by
Feeding our Future, a federal investigation was conducted under
the Biden Administration and the state of Minnesota cooperated
with the investigation. Despite this, Republicans have
consistently asserted the Feeding Our Future scheme was left
unchecked and Governor Tim Walz, Attorney General Keith
Ellison, and state Democrats. They claim Minnesota officials
failed to act despite repeated warnings\49\ and allegedly
retaliated against whistleblowers who raised concerns.\50\ In a
January Committee on Oversight and Government Reform hearing on
the fraud allegations involving Feeding Our Future, several
Republican Members and witnesses suggested that Governor Tim
Walz's administration had ``political incentive'' to prolong
the fraud and that the Biden administration covered up the
fraud for ``political reasons'' related to the 2024
election.\51\
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\49\H. Comm. on Oversight & Accountability, Chairman Comer Opens
Hearing on Massive Fraud in Minnesota's Social Programs (Jan. 7, 2026),
https://oversight.house.gov/release/chairman-comer-opens-hearing-on-
massive-fraud-in-minnesotas-social-programs/.
\50\H. Comm. on Oversight & Accountability, Chairman Comer Widens
Investigation into Fraud in Minnesota's Social Services Programs (Jan.
23, 2026), https://oversight.house.gov/release/chairman-comer-widens-
investigation-into-fraud-in-minnesotas-social-services-programs/.
\51\Danya Gainor, House Oversight Hearing over Fraud Allegations in
Minnesota Drew Shouting and Partisan Fury. Here Are the Takeaways, CNN
(Jan. 7, 2026), https://www.cnn.com/2026/01/07/us/takeaways-minnesota-
fraud-hearing.
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Cases of Actual Fraud Should Be Addressed, Not Politicized
Fraud in child care should be taken seriously, not
politicized. The Majority have proposed bills--including H.R.
7677, the Closing the Provider Fraud Gap Act--that, taken
together, could have the overall effect of upending the child
care system to address a problem that has not been proven to
exist. We recognize that the GAO study proposed by H.R. 7677
will not cause the same harm as the other bills marked up by
the Committee on March 5. Committee Democrats also supported
H.R. 7725 at the markup. However, the markup as a whole
reinforced the Majority's narrative that the biggest issue
facing federal child care delivery is not the meager amount
spent on it, but widespread fraud in the system- fraud they
have still yet to provide evidence of. Committee Democrats
believe that when fraud exists it should be addressed, but
recognize the Committee's time would be better spent addressing
more pressing issues in child care.
H.R. 7677 MANDATES A GOVERNMENT ACCOUNTABILITY REPORT ON FRAUD
PREVENTION
H.R. 7677, the Closing the Provider Fraud Gap Act, requires
the Government Accountability Office to conduct a study
regarding fraud prevention measures in federal early childhood
education, child care, and child nutrition programs, including
Head Start, CACFP, and CCDBG. The report would include analyses
of the ``effectiveness of procedures and measures to prevent
fraud carried out by providers of services under such
programs'', the sufficiency of reporting data, relative
integrity results across states that have to varying degrees
delegated program management to sub-state entities, and
information about the success of corrective action plans.
DEMOCRATIC AMENDMENTS OFFERED DURING MARKUP OF H.R. 7677
Rep. John Mannion (D-NY) offered an amendment to require
GAO to also examine ways that Congress can help improve child
care supply and lower the costs of child care for families.
Additionally, the amendment required GAO to examine how the
Child Adult Care Food Program (CACFP) supports providers in
serving children healthy meals and snacks that supports the
overall development of children. Committee Republicans rejected
the amendment.
CONCLUSION
It is important to address any instance of fraud with
federal funds designed to support child care programs, and the
report required of GAO by this legislation has the potential to
shed new light on strategies to improve and build on these
important programs. We believe this study could have been
improved greatly by the addition of the Mannion amendment,
which would provide the Committee with information necessary to
address more pressing issues in child care and child nutrition.
However, Committee Democrats joined the Republicans in
unanimously supporting H.R. 7677 when the Committee on
Education and Workforce considered the legislation on March 5,
2026. We urge the House of Representatives to do the same.
Robert C. ``Bobby'' Scott,
Ranking Member.
Joe Courtney,
Frederica Wilson,
Suzanne Bonamici,
Mark DeSaulnier,
Jahana Hayes,
Ilhan Omar,
Adelita Grijalva,
Members of Congress.
[all]