Stop Child Care Funding Fraud Act of 2026

Key Points

• This bill requires states to track and report how often they make "improper payments" with federal child care grants. These errors include paying the wrong amount, paying for children who aren't eligible, or making payments that lack proper paperwork.
• States with high error rates will face automatic cuts to their federal child care budget. Depending on how many mistakes are made, a state could lose between 5% and 15% of its funding until the issues are corrected.
• To stop these penalties, states must submit a "corrective action plan" to the federal government. This plan must include detailed records of child attendance to prove that the money is going toward actual child care services.
• The government will also create a public report showing the error rates for every state. This is intended to hold state officials accountable for how they manage taxpayer money meant for working families.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.