Feeding Children Not Fraudsters Act of 2023 This bill directs the Department of Agriculture (USDA) to audit state agencies for known fraud (i.e., child nutrition program fraud for which any person is investigated, charged, or convicted by the Department of Justice, USDA, or a state official). Under the bill, a state agency is one that serves a local agency, institution, or service institution administering or operating a child nutrition program under which known fraud was committed. Specifically, USDA must annually audit a state agency for the period of January 1, 2020, through December 31, 2022, for known fraud, including fraud carried out under the Child and Adult Care Food Program (CACFP), the Summer Food Service Program, and child nutrition COVID–19 waivers. The audit must examine specific areas, including (1) oversight measures by a state agency; (2) hearings conducted by a state agency after being made aware of such fraud; and (3) overpayments, improper payments, or fraudulent uses of funds by a local agency, institution, or service institution served by a state agency. USDA must submit a report to Congress on the audits. A state agency that is being audited must fully cooperate with an audit, including by providing any requested information, in order to participate in or operate any child nutrition program. Further, USDA and state agencies must retain certain records related to fraud.