The Strengthening Transparency and Oversight to Prevent Child Care Fraud Act introduces significant reforms to the Child Care and Development Block Grant program. Its primary goal is to combat fraud and improve accountability by strengthening state requirements for eligibility, payment practices, and oversight mechanisms. The bill mandates that states verify child care eligibility without self-certification, including income, assets, and family composition, and generally prohibits presumptive eligibility before full documentation. States will be required to pay child care providers based on a child's verified attendance, though full payment is allowed for up to six absent days per month to support fixed costs. To ensure timely transactions, providers must submit invoices within nine months, and states must process payments within 21 days of receiving a complete invoice. A key provision is the requirement for center-based providers to use electronic authentication tools , such as finger imaging, to verify attendance, enhancing the accuracy of payment claims. Furthermore, the legislation compels states to integrate data from various systems, including provider licensing and employment records, and use data analytics to identify anomalous patterns indicative of potential fraud. States must also publicly post their child care plans and any corrective action plans. To bolster quality, states must set aside three percent of quality improvement funds for activities related to inspections, monitoring, and licensing. The bill significantly enhances federal oversight, requiring the Secretary to review state compliance at least every three years, with more frequent monitoring for "high-risk" states. High-risk states are those with unresolved audit findings or improper payment rates exceeding six or nine percent. For non-compliance or improper expenditures, the Secretary shall withhold or reduce funds and impose a five percent penalty. States found with improper expenditures must submit corrective action plans, with penalties for failure to submit or implement them. New regulations will require states to include suspected and verified fraud as improper payments in their error reports. Finally, the bill establishes a federal database of providers disqualified by states for fraud, prohibiting them from receiving future federal funding.