The U.S. Department of Health and Human Services (HHS) has suspended access to federal child care and family assistance funds for California, Colorado, Illinois, Minnesota, and New York due to concerns about widespread fraud and misuse in state-administered programs.
“Families who rely on child care and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose,” said Deputy Secretary Jim O’Neill. “This action reflects our commitment to program integrity, fiscal responsibility, and compliance with federal requirements.”
The freeze affects three programs managed by the Administration for Children and Families (ACF): the Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), and Social Services Block Grant (SSBG). The affected funding amounts are nearly $2.4 billion from CCDF, $7.35 billion from TANF, and $869 million from SSBG.
According to HHS, both TANF and SSBG are designed to help families with children pay for child care costs and other essential services. The agency also reported concerns that some benefits meant for American citizens or lawful residents may have been given to individuals not eligible under federal law.
As part of its response, ACF recently implemented the Defend the Spend system nationwide. Under the new restrictions, the five states must now provide justification and receipt documentation before any federal payments will be made. In addition, ACF has introduced a fraud reporting portal at childcare.gov so parents, providers, and community members can report suspected fraud or misuse of these programs.
“We have a responsibility to protect taxpayer dollars and ensure these programs serve the families they were created to help,” said Assistant Secretary for Children and Families Alex J. Adams. “When there are credible concerns about fraud or misuse, we will act.”
The freeze will remain until ACF completes its review of each state’s compliance with federal requirements.
