Child Care Payment Integrity and Fraud Accountability Act of 2026

Overview

• Bill: H.R. 7720 (118th/119th Congress) designated as the Child Care Payment Integrity and Fraud Accountability Act of 2026
• Purpose: Amend the Child Care and Development Block Grant (CCDBG) Act of 1990 to explicitly require states to account for fraudulent payments and report them to the federal government. The goal is to improve identification, transparency, and accountability for improper payments within CCDBG.

Main Purpose and Intent

• Strengthen program integrity for CCDBG by recognizing fraudulent payments as a distinct category of improper payments.
• Require annual reporting to the Secretary of Health and Human Services (HHS) detailing the dollar amount and share of improper payments, disaggregated into standardized categories, including fraudulent payments.

Key Provisions

• Section 658J(b) amendments to CCDBG Act:
  • Add “fraudulent payments” to the list of improper payments (alongside overpayments, underpayments, etc.).
  • Require annual State reports to the Secretary identifying:
  • The dollar amount and percentage of improper payments by category.
  • Disaggregation into standardized payment categories: suspected fraudulent payments, verified fraudulent payments, non-fraudulent overpayments, underpayments, and technically improper payments (e.g., system errors).
• Reporting framework:
  • States must submit an annual report to the Secretary of HHS, providing granular data on improper payments, including fraudulent payments.
• The bill’s title emphasizes payment integrity and fraud accountability in CCDBG.

Who and What Is Affected

• Affects States that receive CCDBG funds and administer the program through Lead Agencies.
• States would need to adjust their reporting processes to separately track and categorize fraudulent payments in addition to existing improper payment reporting.
• HHS (specifically the Administration for Children and Families within HHS) would receive annual state reports and use the data for oversight and potential corrective actions.

Procedural and Timeline Aspects

• Legislative history:
  • Introduced Feb 26, 2026 by Rep. Mark Messmer; additional sponsor Rep. Wilson.
  • Committee action: Marked up and reported with amendments on Mar 5, 2026 (yea/nay 19–15).
  • Referred to the Union calendar and printed as H.Rept. 119-586 on Apr 6, 2026.
• Implementing changes mirror existing improper payment reporting structures but add a new fraud-specific category and annual reporting requirement.
• Cost implications: The committee notes that a formal CBO cost estimate was not timely available for inclusion in the report.

Potential Impact

• Pros:
  • Increases transparency and visibility into fraudulent payments within CCDBG.
  • Provides data to inform anti-fraud efforts and strengthen program accountability.
• Cons/Considerations:
  • Could raise administrative burden on states due to expanded reporting categories and increased data disaggregation.
  • Critics argue it may add complexity without proven reduction in fraud and could divert funds from direct child care support to administrative tasks.

Overall, H.R. 7720 aims to tighten oversight by mandating explicit tracking and reporting of fraudulent CCDBG payments, enhancing federal and state accountability for taxpayer dollars within the child care program.