STATE OF PLAY: Child Care Accountability and Oversight

Update: 1/7/26

What’s Happening

News this week is focused on reports of persistent fraud in Minnesota and the announcement that the Department of Health and Human Services would be freezing funding for social services programs in the state, including child care. 

It has also been confirmed that HHS is freezing funding for social services programs – Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), and Social Services Block Grant (SSBG)  in New York, California, Illinois and Colorado, citing concerns of potential fraud.

There currently is no nationwide suspension of CCDF funding, but stricter rules tied to additional documentation and verification are now in place in order for states to draw down funds. 

What It Means 

• Fraud at any level is completely unacceptable and takes valuable child care away from families who need it. 
• Every federal child care dollar must be used properly and effectively to support the hundreds of thousands of eligible families who rely on child care so they can work or go to school. Strong state oversight is critical and must be coupled with necessary guardrails at all levels – federal, state, and provider – to safeguard the integrity of the program. 
• At the same time, broad freezes of child care funds will harm working families and children who rely on these resources to afford safe, reliable child care. Without this support, child care will be unaffordable, causing increased financial strain, disruption, and instability for families.  It is essential that the federal government works with states to ensure funding continues to reach eligible children and hard-working families. 

On The Hill

Multiple hearings on child care this month, including –

• There will be a House Oversight Committee hearing January 7 at 10AM. 
• A House Ed and Workforce Committee hearing titled: “Who’s Watching the Kids? How Employers, Innovators, and Parents Are Solving America’s Child Care Crunch” on January 13 at 10:15AM.
• And a Senate Judiciary subcommittee hearing on January 28.

Get Up To Speed: Gain a deeper understanding of the situation with the new FFYF Briefing Room explainer, “Accountability and Oversight, Essential To Affordable Child Care.” 

Update: 1/6/26

Statements from national child care organizations:

First Five Years Fund: “Recent reports of potential fraud are deeply concerning. State oversight through regular audits is required by law to ensure that every dollar intended to protect and support young children is used properly and effectively. At the same time, we must ensure that nothing takes away from making sure funds for child care continue to reach the children and families who depend on them.” 

Child Care Aware of America: “All fraud is unacceptable, and credible allegations of fraud should be investigated thoroughly and quickly so that every dollar intended for child care is used wisely. At the same time, it is critical that we do not destabilize child care for the nearly million working families who rely on it to go to their jobs every day,” 

National Association of Family Child Care: “NAFCC supports accountability and appropriate oversight in all public programs. When misuse of funds occurs, it must be investigated and addressed to ensure resources reach the children, families, and educators they are intended to support. Accountability must be targeted and evidence-based, without destabilizing the broader child care system or limiting families’ access to the child care services they need.”

Update: 12/30/25

The following is a statement from First Five Years Fund Executive Director Sarah Rittling in response to recent reports of fraud concerning child care funding in Minnesota.

“Federal funding enables millions of parents in every state and Congressional district to access and afford quality child care. It supports family stability, promotes healthy child development, and strengthens the broader economy. These funds are essential to the nation’s well-being, allowing parents to work while ensuring their children are cared for and safe.

“Recent reports of potential fraud are deeply concerning. State oversight through regular audits is required by law to ensure that every dollar intended to protect and support young children is used properly and effectively. At the same time, we must ensure that nothing takes away from making sure funds for child care continue to reach the children and families who depend on them. 

“We are hopeful leaders will focus on safeguarding this program’s integrity and continue to build on the meaningful, bipartisan progress that has helped so many families and children nationwide.”