Stop Child Care Scams Act of 2026

This bill significantly strengthens fraud prevention, detection, and enforcement within the Child Care and Development Block Grant (CCDBG) and the Child and Adult Care Food Program (CACFP) . It mandates that the Secretary of Health and Human Services withhold funds from states that are non-compliant with CCDBG requirements, changing previous discretionary authority to a mandatory action. States will also be required to include detailed descriptions in their plans regarding internal controls, processes for investigating and recovering fraudulent payments, imposing sanctions, and verifying eligibility, emphasizing data utilization across state and local agencies. A key provision introduces mandatory permanent debarment for child care providers found to have committed fraud under CCDBG, and similarly for institutions or homes under CACFP. This debarment is reciprocal, meaning a provider debarred from one program will also be debarred from the other. The bill defines "final determination of fraud" to include actions like submitting false statements, misrepresenting services, operating without a license, or improper expenditure of funds. Furthermore, the legislation establishes new measures for states with high improper payment rates. If a state's improper payment rate exceeds 5% for a fiscal year, it must submit a corrective action plan ; exceeding this rate for two consecutive years leads to conditional ineligibility for funds. The Secretary is also required to conduct cyclical monitoring of state performance every three years, designating states with persistent audit findings or noncompliance as "high risk" for additional oversight. Finally, the bill eliminates the Secretary's authority to waive sanctions on states and mandates a GAO study on fraud prevention measures in federal early childhood programs.