WASHINGTON (States Newsroom) — States must now provide “justification” that federal child care funds they receive are spent on “legitimate” providers in order to get those dollars, President Donald Trump’s administration announced.
The Tuesday shift in policy came following allegations of fraud in Minnesota’s child care programs, which prompted the U.S. Department of Health and Human Services to freeze all child care payments to the state.
HHS could not offer many specifics on how the review process will play out for other states, but clarified that the money in question is provided through the multibillion-dollar federal Child Care and Development Fund, or CCDF.
“States will be required to provide documentation, such as written justification, receipts, or photographic evidence, demonstrating that funds are supporting legitimate child care providers,” Emily Hilliard, a spokesperson for HHS, said in a statement to States Newsroom on Wednesday.
CCDF provides federal funding to states, territories and tribes to help low-income families obtain child care.
The program, administered within the Office of Child Care under HHS’ Administration for Children and Families, combines funding from the Child Care and Development Block Grant, or CCDBG, and the Child Care Entitlement to States, or CCES.
Funding for CCDF in fiscal year 2025 stood at roughly $12.3 billion — comprising $8.75 billion from CCDBG and $3.55 billion from CCES.
Head Start — a separate program that provides early childhood education, nutritious meals, health screenings and other support services to low-income families — does not appear to be affected.
In a Tuesday social media post announcing the move, Health and Human Services Deputy Secretary Jim O’Neill said he had “activated our defend the spend system for all ACF payments” and “starting today, all ACF payments across America will require a justification and a receipt or photo evidence before we send money to a state.”
He clarified in a separate post shortly after that “funds will be released only when states prove they are being spent legitimately.”
Funds undergo ‘regular audits’
“Federal funding enables millions of parents in every state and Congressional district to access and afford quality child care,” Sarah Rittling, executive director of First Five Years Fund, a federal advocacy group, said in a Wednesday statement.
Rittling added that “these funds are essential to the nation’s well-being, allowing parents to work while ensuring their children are cared for and safe.”
She also described the reports of potential fraud as “deeply concerning” and pointed out that “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,” she said.
