Update, Jan. 16: On Wednesday, Jan. 14, the N.C. Department of Health and Human Services’ Division of Child Development and Early Education (DCDEE) said in an email that child care subsidy payments will be delayed for December 2025 due to a new federal policy. Under the policy, all Child Care and Development Fund (CCDF) grantees will now be required to provide additional information for payments when requesting funds, “including attestation of implementing strategies ‘to identify fraud and ensure program integrity, including verification of child enrollment and attendance submissions’ and ‘a strong justification for the use of funds that aligns with CCDF program purposes.’”
DCDEE has requested funds to reimburse subsidy providers for child care services provided in December, the email said, but had not yet received the funds as of Jan. 14. On Friday, Jan. 16, DCDEE said in an email that the funds had been received and were being processed.
“At this time, we anticipate that providers will receive payments next week,” that email said. “Thank you for your continued patience and partnership as we work to ensure these resources are distributed as quickly and responsibly as possible.”
Top state officials have responded to reports that the federal government might freeze child care funding across the country, according to a Jan. 5 press release from the North Carolina Department of Health and Human Services (NCDHHS) Secretary Dev Sangvai and Attorney General Jeff Jackson.
The release said the federal government has not given North Carolina any official notice about a funding freeze.
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On Tuesday, Jan. 6, the Trump administration froze billions in child care funding from the Temporary Assistance for Needy Families program and the Child Care and Development Fund (CCDF) to California, Colorado, Illinois, Minnesota, and New York, according to a report by The New York Times. The freezes comes after the federal government froze child care funds to Minnesota last week, demanding an audit of fraud schemes involving government and child care programs.
“If fraud is discovered here, we will pursue it aggressively and make sure those responsible face consequences,” Jackson said in the press release. “That’s what our fraud prosecutors do every day. When people steal taxpayer money, they’re stealing from kids and families. We have zero tolerance for it, and we’ll use every tool we have to stop it. The North Carolina Department of Health and Human Services has been a reliable partner in past efforts to uncover and stop fraud, and that partnership has helped us save taxpayers millions of dollars.”
NCDHHS also said that a notification issued by the federal Department of Health and Human Services on Jan. 5 does not apply to North Carolina. The notification said the department would rescind rules that allow states to pay child care providers with funds from the CCDF without counting attendance.
The press release said North Carolina issues subsidy payments after providers submit attendance data.
States are required to implement monitoring and reporting systems to meet federal compliance standards, according to the press release. That means the state must train providers on subsidy requirements, conduct random monitoring visits to review attendance records, offer technical support, and investigate fraud, among other steps.
The NCDHHS Division of Child Development and Early Education also works with the Office of Internal Auditor to strengthen fraud detection and prevention efforts, the press release said.
Sangvai said the department is committed to oversight to ensure child care funds are spent responsibly.
“We are working closely with our federal partners to protect funding and minimize any disruption for children, families, and providers,” Sangvai said.
Gov. Josh Stein said the state will continue to work with the federal government to combat fraud and preserve funding for child care providers.
“We must protect taxpayers to make sure their hard-earned money goes to provide important services like child care, not to line some crook’s pockets,” he said in the release.
You can read the full release, including several ways to file complaints or share concerns of fraud, on the NCDHHS website.
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