H.R. 7726House119th Congress (2025-2027)Passed House

Stop Child Care Scams Act of 2026

Introduced February 26, 2026

AI-Generated Summary

Updated June 9, 2026 at 5:42 AM UTC

The Stop Child Care Scams Act of 2026 tightens oversight of the Child Care and Development Block Grant program. It gives the Secretary of Health and Human Services mandatory power to withhold grant money from states that do not follow program rules, requires states to detail internal controls and fraud‑prevention plans, and sets new penalties for providers that commit fraud. The bill also adds reporting and monitoring requirements and orders a GAO study of fraud prevention across early‑childhood and child‑nutrition programs.

Key Provisions

  • Changes the law so the Secretary *shall* withhold funds from non‑compliant states, rather than may.
  • States must include in their grant plans a description of internal controls, fraud investigation and recovery processes, sanctions, and eligibility verification procedures.
  • Defines “final determination of fraud” and requires the Secretary to permanently debar any child‑care provider found to have committed fraud, including providers already debarred from the Child and Adult Care Food Program.
  • Sets a 5% improper‑payment rate threshold; states above this must submit a corrective‑action plan, and if the rate exceeds 5% for two consecutive years the state becomes ineligible for grant funds unless it shows progress.
  • Mandates a comprehensive performance review of each state every three years and designates high‑risk states for additional monitoring.
  • Adds debarment rules for the Child and Adult Care Food Program when fraud is found, and removes language that allowed waiving sanctions.
  • Requires the GAO to study fraud‑prevention measures in federal early‑childhood, child‑care, and child‑nutrition programs and report findings within two years.
  • Requires states to report annually the dollar amount and percentage of improper payments, including suspected and verified fraudulent payments.

Legislative Activity

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19 earlier actions
SenateIntro Referral Latest Action

Received in the Senate and Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

June 4, 2026

View full timeline
HouseIntro Referral

Introduced in House

February 26, 2026

HouseIntro Referral

Referred to the House Committee on Education and Workforce.

February 26, 2026

HouseCommittee

Committee Consideration and Mark-up Session Held

March 5, 2026

HouseCommittee

Ordered to be Reported (Amended) by the Yeas and Nays: 20 - 15.

March 5, 2026

HouseCommittee

Reported (Amended) by the Committee on Education and Workforce. H. Rept. 119-592.

April 6, 2026

HouseCalendars

Placed on the Union Calendar, Calendar No. 512.

April 6, 2026

HouseFloor

Rules Committee Resolution H. Res. 1333 Reported to House. Rule provides for consideration of H.R. 8646, H.R. 7726, H.R. 7892 and H.R. 8872. The resolution provides for consideration of H.R. 8646 under a structured rule and H.R. 7726, H.R. 7892, and H.R. 8872 under a closed rule, with one hour of general debate on each bill. The resolution provides for one motion to recommit on each bill.

June 3, 2026 • 9:18 AM

HouseFloor

Considered under the provisions of rule H. Res. 1333. (consideration: CR H3796-3805)

June 3, 2026 • 2:36 PM

HouseFloor

Rule provides for consideration of H.R. 8646, H.R. 7726, H.R. 7892 and H.R. 8872. The resolution provides for consideration of H.R. 8646 under a structured rule and H.R. 7726, H.R. 7892, and H.R. 8872 under a closed rule, with one hour of general debate on each bill. The resolution provides for one motion to recommit on each bill.

June 3, 2026 • 2:36 PM

HouseFloor

DEBATE - The House proceeded with one hour of debate on H.R. 7726.

June 3, 2026 • 2:37 PM

HouseFloor

The previous question was ordered pursuant to the rule.

June 3, 2026 • 3:20 PM

HouseFloor

Mr. Subramanyam moved to recommit to the Committee on Education and Workforce. (text: CR H3805)

June 3, 2026 • 3:20 PM

HouseFloor

The previous question on the motion to recommit was ordered pursuant to clause 2(b) of rule XIX.

June 3, 2026 • 3:20 PM

HouseFloor

POSTPONED PROCEEDINGS - At the conclusion of debate on H.R. 7726, the Chair put the question on motion to recommit and by voice vote, announced the noes had prevailed. Mr. Subramanyam demanded the yeas and nays and the Chair postponed further proceedings until a time to be announced.

June 3, 2026 • 3:20 PM

HouseFloor

Considered as unfinished business. (consideration: CR H3811-3812)

June 3, 2026 • 4:55 PM

HouseFloor

On motion to recommit Failed by the Yeas and Nays: 210 - 213 (Roll no. 197).

June 3, 2026 • 5:02 PM

HouseFloor

Passed/agreed to in House: On passage Passed by the Yeas and Nays: 217 - 207 (Roll no. 198). (text of amendment in the nature of a substitute: CR H3796-3797)

June 3, 2026 • 5:09 PM

HouseFloor

On passage Passed by the Yeas and Nays: 217 - 207 (Roll no. 198). (text of amendment in the nature of a substitute: CR H3796-3797)

June 3, 2026 • 5:09 PM

HouseFloor

Motion to reconsider laid on the table Agreed to without objection.

June 3, 2026 • 5:09 PM

SenateIntro Referral

Received in the Senate and Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

June 4, 2026

Floor Debate

20 members

What members said about H.R. 7726 on the floor

12 Republicans8 Democrats
Robert C. "Bobby" Scott
Rep. Robert C. "Bobby" ScottD-VA-3 · Jun 3, 2026

Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in opposition to H.R. 7726 because we know that childcare is not a luxury. It is a necessity for millions of American…

Robert C. "Bobby" Scott
Rep. Robert C. "Bobby" ScottD-VA-3 · Jun 9, 2026

Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in opposition to H.R. 7892, the so-called No Aid for Ghost Students Act. Let me say at the outset that protecting taxpayer…

James P. McGovern
Rep. James P. McGovernD-MA-2 · Jun 3, 2026

Mr. Speaker, I want to thank the gentlewoman from Indiana for yielding me the customary time, and I yield myself such time as I may consume. Mr. Speaker, Republicans with a straight face come to this…

Erin Houchin
Rep. Erin HouchinR-IN-9 · Jun 3, 2026

Madam Speaker, by direction of the Committee on Rules, I call up House Resolution 1333 and ask for its immediate consideration. Madam Speaker, for the purpose of debate only, I yield the customary 30…

Tim Walberg
Rep. Tim WalbergR-MI-5 · Jun 9, 2026

Mr. Speaker, pursuant to House Resolution 1333, I call up the bill (H.R. 7892) to amend the Higher Education Act of 1965 to require to the Secretary of Education to use an identity fraud detection…

Show 8 more
Tim Walberg
Rep. Tim WalbergR-MI-5 · Jun 3, 2026

Mr. Speaker, pursuant to House Resolution 1333, I call up the bill (H.R. 7726) to amend the Child Care and Development Block Grant Act of 1990 to withhold funds from noncompliant States under such…

Mary E. Miller
Rep. Mary E. MillerR-IL-15 · Jun 3, 2026

Mr. Speaker, I rise today in strong support of my bill, H.R. 7726, the Stop Child Care Scams Act, which joins with the administration's efforts to rid the Federal Government of waste, fraud, and…

Burgess Owens
Rep. Burgess OwensR-UT-4 · Jun 9, 2026

Mr. Speaker, in a speech given by Frederick Douglass in 1894, he said: ``Education . . . [is] the light only by which men can be free. To deny education . . . is one of the greatest crimes against…

David J. Taylor
Rep. David J. TaylorR-OH-2 · Jun 3, 2026

Mr. Speaker, I thank Representative Houchin for yielding the time. Mr. Speaker, I rise today in support of the rule, which includes H.R. 8646, the Agriculture, Rural Development, Food and Drug…

Lucy McBath
Rep. Lucy McBathD-GA-6 · Jun 3, 2026

Mr. Speaker, I thank the ranking member of the Education and Workforce Committee for yielding. Stealing from those who need it most is especially egregious, and I can agree with my colleagues on…

Christian D. Menefee
Rep. Christian D. MenefeeD-TX-18 · Jun 9, 2026

Mr. Speaker, I rise to oppose H.R. 7892, the so-called No Aid for Ghost Students Act. Think about a first-generation student who is applying with a FAFSA for the first time. It is already one of the…

Glenn Grothman
Rep. Glenn GrothmanR-WI-6 · Jun 3, 2026

Mr. Speaker, I rise in support of H.R. 7726, the Stop Child Care Scams Act. One of the provisions in this bill is the Combating Regulatory Abuse, Closing Known Deficiencies, and Overseeing Waste…

Kevin Kiley
Rep. Kevin KileyR-CA-3 · Jun 9, 2026

Mr. Speaker, as a cosponsor of the No Aid for Ghost Students Act, I am very glad that it passed our committee with overwhelming bipartisan support, and I look forward to it receiving bipartisan…

Show 11 more
Suhas Subramanyam
Rep. Suhas SubramanyamD-VA-10 · Jun 3, 2026

Mr. Speaker, I thank the ranking member for yielding. H.R. 7726 is supposedly intended to address fraud in childcare programs, but all it actually does is give the administration more power to…

Pete Stauber
Rep. Pete StauberR-MN-8 · Jun 3, 2026

Mr. Speaker, I rise today in support of H.R. 7726, the Stop Child Care Scams Act. This legislation is about something every American should agree on: Childcare assistance should go to children and…

Robert F. Onder, Jr.
Rep. Robert F. Onder, Jr.R-MO-3 · Jun 3, 2026

Mr. Speaker, I thank Chairman Walberg for yielding. Mr. Speaker, I rise in strong support of H.R. 7726, the Stop Child Care Scams Act. This package will punish bad actors who steal taxpayer dollars…

Burgess Owens
Rep. Burgess OwensR-UT-4 · Jun 3, 2026

Mr. Speaker, every cent of taxpayer money should be treated as sacred. It comes directly out of the pockets of hardworking Americans. That is why no amount of fraud in Federal public assistance…

Judy Chu
Rep. Judy ChuD-CA-28 · Jun 3, 2026

Mr. Speaker, I rise in strong opposition to H.R. 7726, the Stop Child Care Scams Act. As families across the country struggle with the high cost of childcare, Republicans are advancing legislation…

Mike Haridopolos
Rep. Mike HaridopolosR-FL-8 · Jun 3, 2026

Mr. Speaker, what I did notice across the aisle here is that they didn't defend what happened. What happened? The people stole money. This isn't a theory. It is a reality. In Minnesota, a person was…

Mark B. Messmer
Rep. Mark B. MessmerR-IN-8 · Jun 3, 2026

Mr. Speaker, I rise today in strong support of the Stop Child Care Scams Act, which provides a commonsense path toward preventing the rampant waste, fraud, and abuse in our Federal childcare support…

Mike Kennedy
Rep. Mike KennedyR-UT-3 · Jun 3, 2026

Mr. Speaker, I rise today in strong support of H.R. 7726, the Stop Child Care Scams Act of 2026. Before I came to Congress, I spent my career as a physician in Utah caring for working families. In…

Yassamin Ansari
Rep. Yassamin AnsariD-AZ-3 · Jun 3, 2026

Mr. Speaker, the $1.8 billion slush fund for insurrectionist cop beaters is one of the most disgraceful, corrupt exercises of Donald Trump's entire Presidency, and that is saying something. Every…

Glenn Grothman
Rep. Glenn GrothmanR-WI-6 · Jun 9, 2026

Mr. Speaker, in our Committee on Education and Workforce, as in so many other committees, we have discovered rampant fraud, in this case, in Federal financial aid programs as ghost students have been…

Suzanne Bonamici
Rep. Suzanne BonamiciD-OR-1 · Jun 3, 2026

Mr. Speaker, I rise today in opposition to H.R. 7726, which will have detrimental effects on child care in the United States. Fraud at any level is unacceptable, especially if it takes valuable child…

Bill Text

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Referred in SenateIssued June 4, 2026

IIB

119th CONGRESS

2d Session

H. R. 7726

IN THE SENATE OF THE UNITED STATES

June 4, 2026

Received; read twice and referred to the Committee on Health, Education, Labor, and Pensions

AN ACT

To amend the Child Care and Development Block Grant Act of 1990 to withhold funds from noncompliant States under such Act.

1.

Short title

This Act may be cited as the Stop Child Care Scams Act of 2026.

2.

Strengthening the authority to withhold funds for fraud

Section 658I(b)(2)(B) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858g(b)(2)) is amended by striking Secretary may and inserting Secretary shall.

3.

Program integrity and accountability

Section 658E(c)(2) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)(2)) is amended by adding at the end the following:

(W)

program integrity and accountability

The plan shall include a description of—

(i)

the State's internal controls to ensure program integrity and accountability;

(ii)

the processes in place—

(I)

to investigate and recover fraudulent payments; and

(II)

to impose sanctions on clients or providers in response to fraud; and

(iii)

the procedures in place to document and verify eligibility.

Such description shall include how the State utilizes data within and across other State and local agencies that have oversight of child care providers that serve children who receive assistance under this subchapter.

.

4.

Preventing fraud in the child care and development block grant program

Section 658I(b) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858g(b)) is amended—

(1)

by redesignating paragraph (3) as paragraph (4); and

(2)

by inserting after paragraph (2) the following:

(3)

Determination of fraud

(A)

Investigation

The Secretary shall investigate fraud with respect to financial assistance available under this subchapter.

(B)

Debarment

In the case that the Secretary makes, or finds that there has been, a final determination of fraud against a child care provider that received financial assistance available under this subchapter, the Secretary shall permanently debar such child care provider from receiving such financial assistance.

(C)

Providers debarred from Child and Adult Care Food Program

In the case that a child care provider has been debarred from participating in the Child and Adult Care Food Program under section 17 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1766) in accordance with subsection (d)(5)(E)(i) of such section, the Secretary shall permanently debar such child care provider from receiving financial assistance under this subchapter.

(D)

Final determination of fraud definition

In this paragraph, the term final determination of fraud means a determination reached in an administrative order or as part of a judicial decision, for which any rights to review or appeal have been exhausted or waived, that a child care provider—

(i)

knowingly submitted a false statement or documentation to obtain financial assistance available under this subchapter;

(ii)

misrepresented ownership of, enrollment at, attendance at, or services provided through a program of child care services, or the eligibility of the provider to provide such services, to obtain such financial assistance;

(iii)

to obtain such financial assistance, operated without the State licensing described in section 658E(c)(2)(F) and without receiving an exception to such licensing;

(iv)

made a knowing and improper expenditure of such financial assistance; or

(v)

engaged in any other conduct related to such financial assistance that constituted fraud under Federal or State law.

.

5.

Improper payment rate requiring corrective action plan; conditional ineligibility

Section 658J of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858h) is amended—

(1)

by redesignating subsection (c) as subsection (e); and

(2)

by inserting after subsection (b) the following:

(c)

improper payment threshold requiring corrective action plan

If for a fiscal year the improper payment rate of a State is more than 5 percent of the aggregate amount of payments made to carry out this subchapter by such State for such fiscal year, then such State shall submit to the Secretary—

(1)

for review and approval a corrective action plan to reduce such rate to not more than 5 percent for each subsequent fiscal year; and

(2)

such reports as the Secretary may require to show that such State is complying with the requirements of such plan as approved by the Secretary.

(d)

Conditional ineligibility

If for each of 2 consecutive fiscal years the improper payment rate of a State determined under this section is more 5 percent, then such State shall be ineligible to receive funds under this subchapter unless such State demonstrates to the satisfaction of the Secretary that such State for the next fiscal year will—

(1)

reduce such improper payment rate to not more than 5 percent for the next fiscal year; or

(2)

make significant progress to comply with the corrective action plan approved under subsection (c).

.

6.

Cyclical monitoring of State performance

Section 658K of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858i) is amended by adding at the end the following:

(c)

Periodic monitoring by the Secretary

At 3-year intervals, the Secretary shall conduct a comprehensive review of the performance of each State that receives assistance under this subchapter. Based on the results of such review, the Secretary shall designate as high risk a State that has—

(1)

a high level of unresolved or repeated adverse audit findings submitted under subsection (b);

(2)

a high level of unresolved issues under, or repeated performance failures to carry out, corrective action plans submitted by such State under section 659J(c); or

(3)

unresolved or repeat findings of noncompliance with the State plan approved under section 658E(c).

(d)

Required additional monitoring

If a State is designated as high risk under subsection (a), then the performance of such State shall be subject to additional monitoring, as determined by the Secretary.

.

7.

Preventing fraud in the child and adult care food program

Section 17(d)(5) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1766(d)(5)) is amended—

(1)

by redesignating subparagraph (E) as subparagraph (F); and

(2)

by inserting after subparagraph (D) the following:

(E)

Termination due to fraud

(i)

Debarment

In the case that the participation of an institution or family or group day care home under the program is terminated due to a final determination of fraud, the Secretary shall permanently debar such institution or family or group day care home from participating in the program.

(ii)

Providers debarred from Child Care and Development Block Grant program

In the case that an institution or family or group day care home has been debarred from receiving financial assistance under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9857 et seq.) in accordance with section 658I(b)(3)(B) of such Act, the Secretary shall permanently debar such institution or family or group day care home from participating in the program.

(iii)

Final determination of fraud definition

In this subparagraph, the term final determination of fraud means a determination reached in accordance with the procedures and requirements of this section, for which any rights to review or appeal have been exhausted or waived, that an institution or family or group day care home—

(I)

knowingly submitted a false statement or documentation to obtain funds disbursed under subsection (f)(1)(A);

(II)

misrepresented ownership, enrollment, attendance, or services in connection with the operation of the program by such institution or family or group day care home, or the eligibility of such institution or family or group day care home to operate the program, to obtain such funds;

(III)

made a knowing and improper expenditure of such funds; or

(IV)

engaged in any other conduct related to such funds that constituted fraud under Federal or State law.

.

8.

Eliminating authority to waive sanctions

Section 658I(c) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858lg(c)) is amended—

(1)

in paragraph (1) by striking or sanctions imposed upon a State in accordance with subsection (b)(2);

(2)

in paragraph (2)—

(A)

in subparagraph (A) by striking sanction or; and

(B)

in subparagraph (B) by striking sanction or;

(3)

in paragraph (3) striking sanction or; and

(4)

in paragraph (7) by striking sanction(s) or.

9.

GAO study and report on provider-related fraud

(a)

Study

The Comptroller General of the United States shall conduct a study regarding fraud prevention measures in Federal early childhood education, child care, and child nutrition programs that shall include an analysis of—

(1)

the effectiveness of procedures and measures to prevent fraud carried out by providers of services under such programs;

(2)

whether the data the Federal Government receives in connection with such programs (including through audits and reporting requirements) is—

(A)

sufficient to successfully identify fraud carried out under such programs; and

(B)

used effectively by the Federal Government to identify potential fraud carried out under such programs; and

(3)

with respect to the Child Care and Development Block Grant program established under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9857 et seq.)—

(A)

the program integrity results for States that have delegated responsibilities related to program management and administration to counties, local municipalities, or other entities; and

(B)

whether any corrective action plans have been implemented by States to improve program integrity results, including any measurable outcomes from implementing such a corrective action plan.

(b)

Report

Not later than 2 years after the date of enactment of this section, the Comptroller General of the United States shall submit to the Committee on Education and Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a report containing—

(1)

the results of the study conducted under subsection (a); and

(2)

any regulatory or legislative recommendations to improve fraud prevention measures in Federal early childhood education, child care, and child nutrition programs.

(c)

Federal early childhood education, child care, and child nutrition programs defined

For the purposes of this section, the term Federal early childhood education, child care, and child nutrition programs includes—

(1)

Head Start programs (including Early Head Start programs) carried out under the Head Start Act (42 U.S.C. 9831 et seq.);

(2)

the Child and Adult Care Food Program under section 17 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1766); and

(3)

the Child Care and Development Block Grant program established under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9857 et seq.).

10.

Fraudulent payments

Section 658J(b) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858h(b)) is amended—

(1)

in paragraph (1) by inserting (including fraudulent payments) after overpayments; and

(2)

by adding at the end the following:

(3)

Report

The State shall submit to the Secretary an annual report that identifies the dollar and percentage amount of improper payments made by the State, disaggregated as specified by the Secretary by standardized payment categories (including suspected and verified fraudulent payments, non-fraudulent overpayments, underpayments, and technically improper payments (e.g., system error payments)).

.

Passed the House of Representatives June 3, 2026.

Kevin F. McCumber,

Clerk.