Department of Health and Human Services 
 
OFFICE OF INSPEC TOR GENERAL   
 
 
 
   
M E I N T P
ORE  FFORT  S  EEDED  O  ROTECT 
I C C
THE  NTEGRITY OF THE  HILD  ARE 
D F  
AND  EVELOPMENT  UND
B G P  
LOCK  RANT  ROGRAM
OEI-03-16-00150 
JULY 2016   
 AT A GLANCE   
 
 
  WHAT IS CCDF? 
CCDF PROGRAM STATISTICS 
The Child Care and Development Fund (CCDF) is a partnership 
between the Department of Health and Human Services 
  Fiscal year (FY) 2015 Federal grant 
(HHS) Administration for Children and Families (ACF) and 
funds:  $5.4 billion; FY 2015 State 
States.  CCDF provides eligible low-income families with help 
funds:  $2.2 billion 
paying for child care at a provider of their choice.1  Nearly 
 
  Third-largest block grant program  1.5 million children receive a child care subsidy from the CCDF 
administered by the Federal  program every month.   
government 
HOW IS CCDF ADMINISTERED? 
 
  Number of children receiving care:   CCDF is administered through block grants to States.  Block 
Nearly 1.5 million every month  grants allow the Federal Government to provide States with a 
  specified amount of funding to assist them in addressing 
  Number of child care providers:  broad purposes, such as the provision of child care.  As with 
Approximately 330,000  other block grants, States have flexibility, within certain broad 
parameters, in managing CCDF funds and determining the 
CCDF PROGRAM INTEGRITY  internal controls and fraud prevention activities they will use 
to ensure program integrity. 
  States vary substantially in the 
Under the CCDF block grant, States also have flexibility to 
degree to which they conduct 
establish their own eligibility criteria and select subrecipients 
program integrity activities 
to administer all or part of the program in accordance with 
 
Federal requirements and guidelines.2  In addition, States have 
  Not all States perform important 
the flexibility to determine the payment mechanism for 
antifraud activities 
providing child care assistance to eligible families.  States may 
 
provide this assistance through vouchers and/or contract 
  Many States report no results or 
directly with providers to have child care slots available to 
do not know the results of their 
families who participate in the CCDF program.3 
program integrity efforts 
  CCDF VULNERABILITIES IDENTIFIED BY OIG 
  States identified payment error  To address fraud, waste, and abuse in the CCDF program, the 
Office of Inspector General (OIG) uses a multidisciplinary 
rates between 0.03 percent and 
approach, including a rigorous program of audits, 
36 percent; almost half did not 
investigations, and evaluations.  OIG also is undertaking an 
expect to recover any of these 
initiative to address challenges common to HHS grant 
improper payments   
programs through indepth, targeted efforts.  This initiative 
 
focuses on internal controls, program effectiveness, and 
  States report limitations in 
prevention of fraud, waste, and abuse in grant programs.  OIG 
technology, resources, and 
will continue to examine CCDF as part of this initiative. 
coordination as challenges to 
program integrity  In its past body of work on CCDF, OIG has identified fraud, 
  found improper payments, and exposed health and safety 
  ACF oversight of State programs  concerns at child care facilities.  An OIG investigation resulted 
focuses more on technical  in the recent conviction of a CCDF provider who fraudulently 
assistance than compliance  billed the State nearly $1 million for children who either did 
  not meet eligibility requirements or did not actually receive 
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  child care services.  In a separate series of audits, 
OIG has identified weaknesses in some States 
Types of Child Care  
 
fiscal controls that put CCDF funds at risk.4  In    
Providers 
 
addition, CCDF has been identified as an HHS 
Centers  Care provided in a center-based setting, 
program that is susceptible to significant 
including programs in schools or churches. 
improper payments, with an estimated 
$311 million in improper payments identified for  Group Home Providers  Care provided by two or 
more individuals in a private residence other than 
Federal fiscal year (FY) 2015 (hereinafter referred 
the childs own residence.  
to as 2015).5, 6   
Family Home Providers  Care provided by one 
Protecting the financial integrity of the program  individual in a private residence other than the 
is important, but there also is a critical need to  childs own residence. 
ensure that CCDF-funded care is delivered in 
Child Home Providers  Care provided by a 
safe, high-quality child care centers or home  caregiver in the childs own home. 
settings.  However, OIG audits conducted in   
10 States found that 96 percent of CCDF child   
care providers visited had at least one health and safety violation.7  Given the CCDF programs 
susceptibility to fraud and improper payments, as well as recent health and safety concerns, it is critical 
for ACF and States to employ effective measures to ensure the integrity of their CCDF programs. 
This evaluation focuses on how States and ACF ensure the integrity of the CCDF block grant program 
and the results of States program integrity activities.8  For this report, OIG collected and analyzed 
information from States and ACF.  Appendix A provides a description of our methodology. 
CCDF PROGRAM INTEGRITY 
CCDF program integrity activities are necessary to ensure provider and program quality and maintain 
financial accountability.9  As a block grant, CCDF is designed to provide maximum flexibility to the 
States, including how the States oversee the integrity of 
their programs.  While these flexibilities allow States to use 
Key Partners in 
funds to meet their unique needs, block grants also may 
Safeguarding CCDF 
pose Federal oversight challenges with regard to program 
ACF accountability and effectiveness.  Current Federal oversight 
of CCDF is done largely through review of State plans.  ACF 
requires States, every 3 years, to submit for its approval a 
States
comprehensive plan describing how the State will 
administer its CCDF program.10  State plans are the primary 
Subrecipients
mechanism by which ACF determines compliance with 
Federal CCDF requirements.  The plans describe the 
CCDF Providers
program integrity and accountability measures the States 
will implement to protect their CCDF programs from 
CCDF Clients
intentional and unintentional program violations and 
administrative errors (hereinafter referred to as program 
violations and errors).11   
BALANCING PROGRAM INTEGRITY WITH CCDF BLOCK GRANT REAUTHORIZATION REQUIREMENTS 
In November 2014, the Child Care and Development Block Grant Act of 2014 (2014 Reauthorization 
Act) reauthorized the CCDF program with changes in a number of critical program areas, including 
measures to strengthen health and safety requirements for child care providers and expand families 
eligibility periods.  Specifically, the reauthorization established a 12-month eligibility redetermination 
period for CCDF families, irrespective of changes in income (as long as income does not exceed the 
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  Federal threshold of 85 percent of State median income) or temporary changes in participation in work, 
training, or education activities.12  Previously, if a States income eligibility limit was below the Federal 
threshold, the State could disenroll a client for an increase in income above the States limit.  As States 
implement changes to comply with new program requirements, ACF has reemphasized that States 
program integrity efforts should be balanced with ensuring access to child care for eligible families.  
   
To complement this report, OIG has published an interactive map containing  
State-by-State CCDF program characteristics and selected program integrity information.  
The interactive map is available at http://oig.hhs.gov/oei/maps/ccdf/ 
 
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  STATES DIFFER IN THE SCOPE OF THEIR PROGRAM INTEGRITY ACTIVITIES 
ACF provides States with a CCDF plan template that includes a list of activities States may undertake to 
ensure program integrity.  In the plan template, ACF instructs States to select which activities they plan 
to conduct.  The activities listed are options from which States may choose; ACF does not require States 
to perform these specific program integrity activities.  States have the flexibility to determine which 
program integrity and antifraud activities they will undertake to protect their CCDF programs.   
To ensure the integrity of CCDF, States planned to conduct a number of different program integrity 
activities in 2015.  However, States differed both in the number and types of activities that they 
planned to conduct in 2015.  Some activities were more hands-onsuch as conducting onsite visits to 
providers and subrecipientswhile other activities were more automatedsuch as running system 
reports to flag errors. 
States planned to conduct between 4 and 11 program integrity activities for 2015with 6 States 
planning to conduct 11 activities and 7 States planning to conduct 6 or fewer activities.  As shown in 
Figure 1, almost all States planned to review providers attendance or billing records as part of their 
program integrity efforts in 2015.  Most States also planned to conduct quality control or quality 
assurance reviews, such as reviews of high-risk cases, contract files, and provider invoices.  However, 
almost half of States did not plan to match their CCDF data against other government databases,13 and 
more than one-third of States did not plan to conduct data mining.  Additionally, more than a quarter 
of States did not plan to conduct onsite visits to providers for program integrity purposes.  Appendix B 
contains information on each States planned program integrity activities for 2015.  
Figure 1:  States Planned Program Integrity Activities, 2015 
Number of States that planned to conduct activity
50
45 48 47 Number of States that did not plan to conduct activity
44
40
41 40
35 38 37
35
30 32
25 27 27
20 23 23
18
15
15
10 12 13
9 10
5 6
2 3
0
Review Conduct Train staff on Audit Share or Run system Conduct Conduct Conduct data Share or Conduct
attendance quality policy and/or provider match data reports that onsite visits supervisory mining match data onsite visits
or billing control or audits records from other flag errors to child care staff reviews from other to
records quality government providers government subrecipients1 
assurance programs databases
reviews
Source: OIG analysis of States responses to OIG survey on CCDF program integrity, 2016.  
1 Some States do not use subrecipients for their CCDF programs.   
 
   
 
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  Some States could not provide any information on the number of providers and clients they 
reviewed 
States could not always provide information on the extent to which they conducted their planned 
program integrity activities in 2015.  As Figure 2 shows, 22 of the 48 States that reviewed providers 
attendance or billing records did not know the percentage of providers whose records were reviewed 
in 2015.  Moreover, while 40 States planned to share or match data with other government programs, 
more than one-third did not know the extent to which they conducted this activity.  Nine States did not 
know how many providers they had visited to review attendance and enrollment documentation, and 
10 States did not know the number of providers they had audited.   
Several States provided an explanation for why they did not know the extent of their program integrity 
activities.  Four States reported that the data were maintained only at the local or county 
level.  Another three States did not track data for an activity, could not access the data in their 
database easily, or could not provide the data within OIGs requested timeframe. 
States varied substantially in the degree to which they conducted specific program integrity 
activities  
States that provided data on the extent of their program integrity activities performed these activities 
to varying degrees.  As shown in Figure 2, of the States that reviewed providers attendance or billing 
records, the percentage of providers reviewed ranged from less than 1 percent to 100 percent.  Seven 
States reviewed records for 100 percent of their providersanother 10 States reviewed attendance or 
billing records for less than 10 percent of their providers.  Also, the States that performed data matches 
with other government programs or databases performed matches for between 16 and 100 percent of 
their CCDF clients, with many performing matches for all of their clients. 
Figure 2:  Extent of States Selected Program Integrity Activities, 2015 
 
Source: OIG analysis of States responses to OIG survey on CCDF program integrity, 2016. 
 
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    Of the nearly 30 States that provided information on the number of providers audited or visited onsite, 
the number of providers audited ranged from 7 to more than 6,000, and the number visited ranged 
from 1 to more than 7,000.  Nearly all States have more than 1,000 providers, and some have more 
than 10,000 providers.  However, of the States that audited providers, half audited fewer than 
62 providers.  Of the 27 States with data for onsite visits, almost one-third visited fewer than 
100 providers.  
NOT ALL STATES PERFORM IMPORTANT ANTIFRAUD ACTIVITIES 
Nearly half of States did not have any staff dedicated solely to identifying CCDF fraud  
Twenty-three States reported having at least 1 staff person dedicated solely to identifying fraud in the 
CCDF program.  Several States had a larger number of staff dedicated to identifying fraud, with 5 of the 
23 States reporting 10 or more dedicated staff.  The State with the largest dedicated staff made the 
most referrals to law enforcement in 2015 as a result of its program integrity activities.  One State 
specifically noted that while it did not have staff dedicated solely to identifying CCDF fraud, it did have 
staff dedicated to identifying fraud across all of its State benefit programs. 
Some States did not perform important antifraud activities, and few States notified ACF or other 
States about suspected fraud 
To protect against the many types of fraud that can occur in the CCDF program, States employ a variety 
of antifraud activities.  As Figure 3 shows, 43 States review attendance data to see whether the number 
Figure 3:  Examples of CCDF Fraud and States Activities to Protect Against Fraud 
WHAT TYPES OF  WHAT DO STATES  
   
  FRAUD CAN OCCUR    DO TO PROTECT  
  IN CCDF?    AGAINST FRAUD? 
   
 Clients providing false information on eligibility   21 States check for excessive distance 
applications  between provider and client addresses 
   
 Clients falsifying documents on which eligibility   26 States use surveillance to determine if 
determinations are made  potentially fraudulent activities are occurring 
   
 Providers falsifying information to become   32 States review payments for hours of child 
authorized for CCDF payment  care that exceed the approved hours  
   
 35 States require fingerprinting before issuing 
 Providers falsifying attendance or enrollment 
initial payment to all child care centers1  
records  
 
 
 39 States check for multiple providers that are 
 Providers billing for child care services not 
billing for the same child at the same time 
rendered 
 
 
 40 States verify addresses before issuing 
 Providers paying kickbacks or bribes to clients  
initial payment to all child care centers1  
 
 
 Subrecipients intentionally misusing grant 
 43 States check for attendance that exceeds 
funds 
licensed capacity or State maximum for 
 
unlicensed providers 
 
Source: OIG analysis of States responses to OIG survey on CCDF program integrity, 2016. 
1 States perform this activity less often for other provider types.  One State did not provide information on this activity.  
 
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  of children in care exceeds the licensed capacity of the provider.  However, some States are not 
performing targeted data analyses and antifraud activities that could aid in their detection of fraud.  
More than one-third of States do not review payments for excessive hours of care or check for 
excessive distance between the provider and client addresses.  Twenty-four States do not use 
surveillance to determine whether potentially fraudulent activities are occurring at provider locations.   
States can perform verification checks of providers, such as fingerprinting and verifying addresses, prior 
to initial payment.  However, 14 States do not require fingerprinting before issuing initial payments to 
all child care centers, and 9 States do not verify the addresses of all child care centers before issuing 
payments.  Even more States do not require these verification checks for all of their group, family, and 
child home providers.  Appendix C contains additional information regarding verification checks that 
States conduct for each provider type.   
Although not all States conduct important antifraud activities, most States have a process in place for 
staff to report suspected CCDF program fraud.  In addition, all but two States reported that they have a 
system in place, such as a website or hotline, for individuals to report suspected CCDF program fraud to 
the State.   
Very little information about suspected fraud is being shared across States.  Few States notify ACF 
when instances of suspected fraud have been identified, and only two States have systems in place to 
notify other States about CCDF providers or clients who are suspected of fraud.  Additionally, only two 
States have systems in place to notify other States about CCDF providers or clients who have been 
disqualified from their program or convicted of fraud. 
MANY STATES REPORT NO RESULTS OR DO NOT KNOW THE RESULTS OF THEIR CCDF PROGRAM 
INTEGRITY EFFORTS 
As a result of their CCDF program integrity activities, States may identify program violations and errors, 
refer cases of suspected fraud to law enforcement, and disqualify clients and providers from their CCDF 
programs.  As shown in Figure 4, many States program integrity activities generated no results or the 
States did not know the results of their activities for 2015. 
   Figure 4:  States Reporting of Program Integrity Results, 20151 
 
   
Source: OIG analysis of States responses to OIG survey on CCDF program integrity, 2016.  
1 Two States did not respond regarding the number of program violations/errors, and one State did not respond regarding the number of 
referrals to law enforcement and the number of clients disqualified. 
 
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  Less than half of States disqualified child care providers 
ACF does not collect from States, or  (24), disqualified clients (17), or made referrals to law 
require States to track, any information  enforcement (15), as shown in Figure 4.  Eighteen States 
on the number of program violations and  identified no program violations or errors, or were unable 
errors, provider or client disqualifications,  to provide their total number of program violations and 
or law enforcement referrals that States  errors.  For the four selected program integrity outcomes, 
identify as a result of their CCDF program  eight States reported no overall results or stated that they 
integrity activities.    did not know the results.  Appendix D provides individual 
program integrity results for each State. 
 
 
One State did not identify any CCDF program violations or errors, and another 17 States did not know 
the total number of program violations or errors.  States identify violations and errors through 
activities such as reviewing attendance or billing records and conducting onsite visits to providers, as 
listed in Figure 5.   
Thirty-one States could provide a total number of program violations and errors that were identified in 
2015.  Twelve of these States each identified fewer than 100 program violations and errors.  These 
12 States received nearly $900 million in Federal CCDF funding in 2015.  Combined, the 31 States 
identified 59,081 program violations and errors.  These States reported between 0 and 21,343 
violations and errors, with a median of 236. 
Figure 5:  States Identification of Program Violations and Errors by Program Integrity Activity, 20151  
Training staff on policy and/or audits
Conducting quality control/quality assurance reviews
Conducting onsite visits to subrecipients
Data sharing/matching from other Government databases
Conducting data mining to identify trends
Conducting supervisory staff reviews
Data sharing/matching from other Government programs
Conducting onsite visits to child care providers
Auditing provider records
Running system reports to flag errors
Reviewing attendance or billing records
0 10 20 30 40 50
Number of States
States Identified No Program Violations or Errors
States Identified One or More Program Violations or Errors
States Did Not Know Number of Program Violations or Errors Identified
Source: OIG analysis of States responses to OIG survey on CCDF program integrity, 2016. 
1 Two States did not respond regarding total program violations or errors for some of their planned program integrity activities. 
 
   
 
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  For 7 of the 11 program integrity activities displayed in Figure 5, more than half of States that 
conducted the activity did not know the total number of program violations or errors identified as a 
result of the specific activity.  In addition, Figure 5 depicts the number of States that identified no 
program violations or errors for a particular program integrity activity in 2015.  By activity, the number 
of States that did not identify any program violations or errors ranged from 6 States for reviewing 
attendance or billing records, running system reports to flag errors, auditing provider records, and 
conducting onsite visits to providers, to 12 States for training staff on policy and/or audits. 
More than two-thirds of States made no CCDF referrals to law enforcement or did not know how 
many referrals were made.14  Seventeen States made no CCDF referrals to law enforcement in 2015.  
Another 17 States did not know how many referrals were made.  Some of these States noted that 
referrals to law enforcement are determined by local or county-level CCDF program administrators, 
and that the State does not maintain or track any data on these referrals.15  Fifteen States referred 
1,366 cases involving child care providers and/or clients to local, State, or Federal law enforcement in 
2015 as a result of their CCDF program integrity activities.     
Nearly two-thirds of States did not disqualify any CCDF clients or did not know how many clients were 
disqualified.  According to their State plans, most States intended to use program disqualification to 
sanction clients committing program violations.  However, only 17 States disqualified clients as a result 
of their CCDF program integrity activities in 2015.  Combined, these States disqualified 860 clients.  
Fifteen States did not disqualify any clients, and another 17 States did not know how many CCDF clients 
were disqualified from their program in 2015.  One State noted that client sanctions are determined at 
the local agency level, not the State level.  
More than half of States did not disqualify any CCDF providers or did not know how many they had 
disqualified.  Twenty-four States disqualified a total of 984 providers as a result of their CCDF program 
integrity activities.  In contrast, more than half of States did not disqualify any providers from the CCDF 
program in 2015 (15 States) or did not know how many providers had been disqualified (11 States) as a 
result of their program integrity activities.  Some States also reported that they used other types of 
provider sanctions in 2015, such as corrective action plans and repayment agreements. 
ALTHOUGH STATES IDENTIFIED PAYMENT ERROR RATES RANGING FROM LESS THAN 1 PERCENT 
TO 36 PERCENT, ALMOST HALF DID NOT EXPECT TO RECOVER ANY IMPROPER PAYMENTS  
While States have flexibility in determining their program integrity activities, States must complete the 
Error Rate Review process.  To reduce vulnerabilities in CCDF, Federal regulations require States to 
conduct error rate reviews to detect and reduce errors associated with eligibility determinations.  
States most recent reviews identified error rates ranging from 0.03 percent to 36.43 percent.16   
On a 3-year cycle, States perform standardized reviews of a sample of case records to assess whether 
client eligibility determinations were made in accordance with State rules.  States submit the results of 
their reviews to ACF using Error Rate Reports.17  According to ACF staff, other than the program 
integrity activities that States describe in their CCDF plans, the Error Rate Reports are the only 
program-integrity-specific reporting that ACF requires of States.  On the basis of States latest Error 
Rate Reports, ACF reported a national CCDF payment error rate of 5.74 percent or $311 million in the 
HHS FY 2015 financial report.18  ACFs target payment error rate for CCDF was 5.6 percent for 2015. 
   
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Overall, States expected to recover less than a  Figure 6:  States CCDF Payment Error Rates 
quarter of the total overpayments identified 
through error rate reviews. Twentyfour did not 
expect to recover any improper payments as a result 
of their error rate reviews.  The most common reason 
these States cited for not recovering improper 
payments was that the overpayments identified in the 
 33 States had error 
error rate reviews were due to caseworker or agency   
rates of less than 
error, not to fraud.  For example, one State noted that 
5 percent 
its Child Care Policy Manual provides an exception for 
 
collecting any overpaid benefits when the 
 10 States had error 
 
overpayment was not the fault of the applicant.  
rates between 
States have the flexibility to determine whether they 
5 and 10 percent 
will seek to recover improper payments that are the   
result of errors.  However, Federal rules require   4 States had error  
 
States to recover improper payments that result from  rates between  
fraud.19    11 and 20 percent 
 
In contrast to States that did not expect to recover 
  5 States had error  
any improper payments, 13 States expected to 
rates greater than  
recover the total amount of overpayments identified 
20 percent 
in their error rate reviews.  Appendix E provides   
specific information from each States Error Rate 
Report.  Source: OIG analysis of States Error Rate Reports  
from 2012-2014. 
 
STATES FACE CHALLENGES IN PROTECTING THE CCDF PROGRAM 
States reported technological limitations, inadequate resources, and lack of coordination and 
communication within and across States as the top challenges to ensuring CCDF program 
integrity 
Figure 7:  States Top Challenges, by Number of States  Nearly a third of States reported all of the 
following challenges with technology
technology/software limitations, 
nonintegrated data systems, and/or 
access to data.  Some States specifically 
cited old or outdated hardware and 
software.  Other States highlighted the 
need for enhancements or improvements 
to their information technology systems
such as implementing an electronic time 
and attendance system or integrating 
data from multiple sourcesto improve 
their ability to monitor potential fraud.  
States also reported that access to 
program data in other States would help 
Source:  OIG analysis of States responses to OIG survey on CCDF program  
integrity, 2016.  them in their program integrity efforts.   
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  In addition to technological challenges, 29 States reported challenges related to funding and/or staffing 
levels, as shown in Figure 7.  Some States reported that additional funds and staffing, especially staff to 
support their efforts to detect and investigate potential fraud, would be helpful. 
Twenty-six States reported that communication and coordination, within or across State lines, was a 
challenge.  For example, one State reported that communication with its county-level agencies can be 
difficult because of each countys chain of internal communication.  Some States also reported that no 
clear policies or procedures are in place to facilitate communication and coordination across States.  
One State suggested that to facilitate coordination, it would be helpful for bordering States to provide a 
list of debarred clients and providers to one another. 
Some States raised program integrity concerns regarding reauthorization requirements 
In addition to challenges related to technological limitations, inadequate resources, and lack of 
coordination and communication, 15 States raised concerns about implementing CCDF block grant 
reauthorization requirements while maintaining program integrity.  For example, one State noted that 
it is working on finding a balance between having strong internal controls, including reporting 
requirements, in place while allowing the flexibility that CCDF requires during the 12-month eligibility 
certification periods.  Six States reported that the new requirement may decrease the detection of 
fraud in the CCDF program, with one State noting that the lack of frequent monitoring may delay the 
discovery of fraudulent activities.  However, other States noted that they had no program integrity 
concerns related to the new reauthorization requirements. 
ACF OVERSIGHT FOCUSES MORE ON TECHNICAL ASSISTANCE THAN COMPLIANCE  
ACF is responsible for overseeing States efforts to protect 
  the CCDF program from fraud and abuse and ensuring that 
ACF Oversight of CCDF  limited CCDF funds are used only to fulfill critical program 
  Program Integrity  goals.  However, ACF does not have a process in place to 
ensure that States carry out the program integrity 
 Central office and regional offices  activities they specify in their CCDF State plans.  ACF does 
review and approve States CCDF 
not collect any information from States regarding the 
plans 
frequency or intensity with which States actually conduct 
activities to protect their CCDF programs from fraud and 
 Central office, regional offices, 
and the National Center on Child  abuse, nor does it track suspected or proven fraud across 
Care Subsidy Innov ation and  States programs.  In fact, when OIG compared the 
Accountability (Subsidy Center) work  program integrity activities States had outlined in their 
with States to conduct the Error Rate  CCDF plans against the activities States conducted in 2015, 
Review process  we found that six States had not conducted at least one of 
their planned activities.  ACF staff noted that ACF has 
 Regional offices and the Subsidy 
tried to push the envelope to try to do the best we can to 
Center provide technical assistance 
make sure we are good stewards of these funds but that 
to States on program integrity issues 
it would need greater resources to conduct more robust 
 Central office and the Subsidy  oversight of States program integrity efforts.20   
Center prepare program integrity 
guidance documents for States  ACF has focused on providing technical assistance and 
guidance to States on CCDF program integrity issues.  A 
State may request and receive program integrity technical 
assistance through its ACF regional office or through the 
National Center on Child Care Subsidy Innovation and 
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  Accountability.  ACFs program-integrity technical assistance efforts have included regional office 
meetings with and visits to States, conference calls that include States CCDF administrators and related 
agency staff across States, onsite visits targeted to States with high eligibility error rates, and Error Rate 
Review training webinars.  ACF also has produced guidance documents that States may use to 
strengthen their CCDF program integrity efforts, including an internal controls self-assessment 
instrument and an annual best practices document to help reduce eligibility errors.21  
According to ACF staff, the 2014 Reauthorization Act did not address CCDF program integrity; however, 
ACF recognized the importance of States program integrity efforts when it issued its December 2015, 
Notice of Proposed Rulemaking.22  In this notice, ACF proposed adding a program integrity section to 
the CCDF regulations.  The regulations currently do not contain a program integrity section.  The 
proposed addition would formalize changes ACF already made to the CCDF State plan template based 
on the new reauthorization requirements.  Although the new CCDF State plan template does not add 
program integrity activities to the list of activities in the previous State plan template, it requires States 
to have processes in place to identify fraud or other program violations.  According to ACF staff, the 
agency expects to finalize the CCDF program regulations before the end of FY 2016. 
CONCLUSION AND RECOMMENDATIONS:  THE FUTURE OF CCDF PROGRAM INTEGRITY   
This report shines a spotlight on the substantial differences in the scope and results of program 
integrity activities across States and the limited data available to monitor the effectiveness of States 
program integrity efforts.  Variations in the number of activities implemented across States and the 
extent to which States perform these activities raise concerns about whether adequate safeguards are 
in place to protect the CCDF program. 
These findingsalong with OIG work that identified vulnerabilities related to States health and safety 
monitoring of CCDF child care providers and the use of CCDF block grant fundshighlight the need for 
stronger ACF and State oversight to protect the program and ensure that safe, high-quality care is 
provided to CCDF-eligible children.   
States and ACF face a significant challengebalancing the need to strengthen CCDF program integrity 
activities and oversight efforts with the goal of ensuring access to safe, high-quality child care for 
eligible children.  With the reauthorization of CCDF, ACF and States are tasked with ensuring that 
States programs reflect many new statutory requirements.  In this changing environment, new and 
different program vulnerabilities may emerge, reinforcing the need for States and ACFs continued 
vigilance in ensuring that CCDF funds are used as intended.   
We recommend that ACF: 
  Request that States examine the effectiveness of their program integrity and fraud fighting 
activities  
ACF and States could jointly examine the extent to which a States activities have been effective 
in detecting and preventing program violations, errors, and fraud.  This examination could help 
each State and ACF determine whether its approach is sufficiently safeguarding the CCDF 
program. 
 
  Examine with States the benefits of expanding program integrity and fraud fighting activities  
ACF and States could jointly examine the costs and benefits associated with expanding the 
types of program integrity and antifraud activities they use to protect their CCDF programs. 
   
More Effort Is Needed To Protect the Integrity of CCDF (OEI-03-16-00150)  12 | P age 
    Establish routine communication to share program integrity and fraud fighting best practices 
ACF should establish regular, formalized communication channels between the central office, 
regional offices, technical assistance centers, and States regarding program integrity methods, 
potential fraud schemes, and program disqualifications.  Establishing such channels would 
allow States to share techniques and approaches they have used to address information 
technology limitations and data access challenges.  This also would enable ACF central office 
and regional office staff to target guidance materials and technical assistance to States most 
pressing program integrity concerns. 
 
  Determine the feasibility of requiring all States to report information about the results of 
their program integrity and fraud fighting activities 
Collecting datasuch as the number of disqualifications or fraud referralswould be an 
important step in ACFs monitoring of States efforts to safeguard the CCDF program. 
AGENCY COMMENTS 
ACF concurred with all four recommendations in our report.  ACF stated that since its inception, the 
Child Care and Development Block Grant has allowed States great flexibility in the ways they operate 
their programs, including their program integrity efforts.  ACF noted that it has mobilized its technical 
assistance networkincluding technical assistance centers and regional officesto support States 
efforts to balance policies that support high-quality services for children and families while at the same 
time ensuring policies and practices are in place to prevent improper payments.  ACF explained that the 
technical assistance includes targeted work with States on fraud prevention, detection, and recovery.  
In addition, ACF noted that it continues to conduct onsite visits to States with improper payments that 
exceed the 10 percent compliance threshold to assist States in their efforts to reduce improper 
payments. 
In response to our first and second recommendations, ACF stated that in FY 2017, the Office of Child 
Care (OCC) plans to use the Grantee Internal Controls Self-Assessment instrument to assist States in 
examining the effectiveness of their program integrity and fraud fighting efforts.  ACF noted that the 
self-assessment may be conducted onsite or completed remotely via online interactive meetings.  In 
both cases, facilitated dialogue will engage States to examine policies and procedures for efficacy in 
their program integrity efforts.  ACF reported that the self-assessment process includes targeted 
discussions to consider the costs and benefits and overall success of States efforts. 
In response to our third recommendation, ACF stated that OCC plans to reinstate the National Program 
Integrity Conference Call series in FY 2017.  ACF noted that these quarterly calls will allow States to 
share promising practices as they develop and implement new policies and procedures.  Additionally, 
ACF stated that information on data matching, red flag reports, front-end detection, cross-program 
information sharing, and other efforts are available on the OCC website. 
In response to our fourth recommendation, ACF stated that OCC will look at the feasibility of requiring 
States to report information about the results of their program integrity and fraud fighting activities.  
ACF stated that OCC recently created a new Oversight and Accountability Division, which will increase 
its efforts to monitor State compliance with CCDF requirements, including program integrity efforts.  
ACF noted that OCC will also consider adding the collection of data on program integrity and fraud 
fighting results in the State CCDF plans for the FY 2019 to FY 2021 plan cycle.  Appendix F contains the 
full text of ACFs comments.   
More Effort Is Needed To Protect the Integrity of CCDF (OEI-03-16-00150)  13 | P age 
  APPENDIX A:  METHODOLOGY 
OIG collected, reviewed, and analyzed data from States CCDF plans for the period that covered 
FYs 2014-2015.  We reviewed CCDF plans for 50 States, the District of Columbia, and Puerto Rico 
(States).  Our analysis focused on Section 1.3 of the State plans entitled CCDF Program Integrity and 
Accountability, which contains information regarding States program integrity activities.    
OIG collected from ACF the most recent Error Rate Reports for all States.  Because of the 3-year 
rotational submission of Error Rate Reports, the most current year of data varies according to each 
States submission cycle.  Of the 52 Error Rate Reports in our analysis, 17 States completed the 
Improper Authorizations for Payment Report (ACF-402) for FY 2012, 18 States completed the Improper 
Payments Report (ACF-404) for FY 2013, and 17 States completed the ACF-404 for FY 2014.  The reports 
differ because ACF revised the error rate methodology in FY 2014 to measure improper payments 
rather than improper authorizations for payment.   
OIG requested that States complete a self-administered online survey regarding their program integrity 
activities and antifraud measures as well as the results of their CCDF program integrity efforts for 2015.  
At the time of data collection, States were completing their 2016-2018 CCDF plans for submission to 
ACF.  We want to acknowledge the effort States made to respond to our survey.  Fifty States completed 
the OIG survey, but two StatesHawaii and Wyomingdid not.  However, these two States provided 
OIG with the number of children their CCDF programs served and the number of CCDF providers in 
their State for 2015.     
Finally, OIG interviewed ACF Office of Child Care staff about ACFs oversight of States program integrity 
efforts, including how ACF determines States compliance with their program integrity plans.  
Limitations 
The survey data collected from States were self-reported.  States responses were not independently 
verified; however, we reviewed responses for consistency and possible data entry errors. 
Standards 
This study was conducted in accordance with the Quality Standards for Inspection and Evaluation 
issued by the Council of the Inspectors General on Integrity and Efficiency.  
 
 
 
   
More Effort Is Needed To Protect the Integrity of CCDF (OEI-03-16-00150)  14 | P age 
  APPENDIX B:  PLANNED PROGRAM INTEGRITY ACTIVITIES BY STATE, 2015 
Share or  Run  Conduct  Share or 
Review  Quality  Train staff  Conduct  Conduct 
Audit  match data  system  Perform  onsite  match data 
attendance  control/  on policy  onsite  supervisory 
provider  from other  reports  data  visits to  from other 
or billing  assurance  and/or  visits to  staff 
records  government  that flag  mining  sub- government 
records  reviews  audits  providers  reviews 
programs  errors  recipients  databases 
   Alabama  Federal Funding: $86,652,072    Children Served: 40,458 
                
   Alaska  Federal Funding: $12,526,901  Children Served: 8,639 
                     
   Arizona  Federal Funding: $117,672,719   Children Served: 49,449 
                     
   Arkansas  Federal Funding: $50,630,358  Children Served: 19,109 
                     
   California  Federal Funding: $566,006,154    Children Served: 278,675 
                  
   Colorado  Federal Funding: $69,369,095    Children Served: 30,181 
                    
   Connecticut    Federal Funding: $51,636,332  Children Served: 31,994 
                    
   Delaware  Federal Funding: $16,211,723     Children Served: 20,023 
                     
   District of Columbia  Federal Funding: $11,043,631   Children Served: 7,023   
                     
   Florida    Federal Funding: $273,745,303  Children Served: 213,176 
                     
   Georgia  Federal Funding: $194,314,485             Children Served: 97,300 
                     
   Hawaii1   Federal Funding: $20,950,922  Children Served: 12,129  
NR  NR  NR  NR  NR  NR  NR  NR  NR  NR  NR 
   Idaho  Federal Funding: $27,081,348  Children Served: 13,828 
                    
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  Share or  Run  Conduct  Share or 
Review  Quality  Train staff  Conduct  Conduct 
Audit  match data  system  Perform  onsite  match data 
attendance  control/  on policy  onsite  supervisory 
provider  from other  reports  data  visits to  from other 
or billing  assurance  and/or  visits to  staff 
records  government  that flag  mining  sub- government 
records  reviews  audits  providers  reviews 
programs  errors  recipients  databases 
   Illinois  Federal Funding: $211,391,481  Children Served: 257,547 
                     
   Indiana  Federal Funding: $118,493,652  Children Served: 49,972 
                     
   Iowa  Federal Funding: $46,032,306  Children Served: 28,496 
                   
   Kansas  Federal Funding: $48,877,098  Children Served: 23,335 
                    
   Kentucky  Federal Funding: $82,139,640  Children Served: 31,303  
                     
   Louisiana  Federal Funding: $82,461,058  Children Served: 15,124  
                   
   Maine  Federal Funding: $16,408,669  Children Served: 4,312 
                     
   Maryland  Federal Funding: $83,820,493  Children Served: 30,079 
                    
   Massachusetts  Federal Funding: $105,752,338  Children Served: 75,181 
                     
   Michigan  Federal Funding: $156,268,909  Children Served: 56,450 
                   
   Minnesota  Federal Funding: $85,587,327  Children Served: 47,704 
                   
   Mississippi  Federal Funding: $57,131,513  Children Served: 29,771 
                    
   Missouri  Federal Funding: $102,463,637  Children Served: 61,576 
                  
   Montana  Federal Funding: $15,330,383   Children Served: 8,357 
                     
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  Share or  Run  Conduct  Share or 
Review  Quality  Train staff  Conduct  Conduct 
Audit  match data  system  Perform  onsite  match data 
attendance  control/  on policy  onsite  supervisory 
provider  from other  reports  data  visits to  from other 
or billing  assurance  and/or  visits to  staff 
records  government  that flag  mining  sub- government 
records  reviews  audits  providers  reviews 
programs  errors  recipients  databases 
   Nebraska  Federal Funding: $35,059,021   Children Served: 29,823  
                   
   Nevada  Federal Funding: $39,669,186   Children Served: 12,230  
                  
   New Hampshire  Federal Funding: $15,958,226  Children Served: 9,363 
                   
   New Jersey  Federal Funding: $115,811,009  Children Served: 90,543  
                     
   New Mexico  Federal Funding: $40,572,624  Children Served: 27,589 
                     
   New York  Federal Funding: $308,900,648  Children Served: 207,251 
                     
   North Carolina  Federal Funding: $203,596,047    Children Served: 113,477 
                    
   North Dakota  Federal Funding: $10,235,533     Children Served: 4,541 
                    
   Ohio  Federal Funding: $213,326,415   Children Served: 177,774 
                     
   Oklahoma  Federal Funding: $81,827,238   Children Served: 58,604 
                    
   Oregon  Federal Funding: $66,431,501  Children Served: 26,909 
                    
   Pennsylvania  Federal Funding: $188,344,536  Children Served: 154,107  
                     
   Puerto Rico  Federal Funding: $31,434,813   Children Served: 11,327 
                     
   Rhode Island  Federal Funding: $17,187,478    Children Served: 14,198  
 
                   
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  Share or  Run  Conduct  Share or 
Review  Quality  Train staff  Conduct  Conduct 
Audit  match data  system  Perform  onsite  match data 
attendance  control/  on policy  onsite  supervisory 
provider  from other  reports  data  visits to  from other 
or billing  assurance  and/or  visits to  staff 
records  government  that flag  mining  sub- government 
records  reviews  audits  providers  reviews 
programs  errors  recipients  databases 
   South Carolina  Federal Funding: $77,090,922  Children Served: 22,190 
                    
   South Dakota  Federal Funding: $12,612,786     Children Served: 7,804 
                      
   Tennessee  Federal Funding: $126,816,127   Children Served: 46,384  
                     
   Texas  Federal Funding: $477,938,028  Children Served: 182,645 
                     
   Utah  Federal Funding: $62,435,382   Children Served: 20,654 
                    
   Vermont  Federal Funding: $9,863,172    Children Served: 12,682 
                     
   Virginia  Federal Funding: $110,542,960     Children Served: 40,852  
                        
   Washington  Federal Funding: $121,192,624    Children Served: 89,292 
                  
   West Virginia  Federal Funding: $32,369,936    Children Served: 20,177 
                    
   Wisconsin  Federal Funding: $91,612,423  Children Served: 76,490 
                     
   Wyoming1  Federal Funding: $9,199,272  Children Served: 6,629  
NR  NR  NR  NR  NR  NR  NR  NR  NR  NR  NR 
Sources:  ACF, Office of Child Care, FY 2015 CCDF Allocations; and OIG analysis of States responses to OIG survey on CCDF program integrity, 2016. 
1 State did not respond to the OIG survey but provided data to OIG regarding the number of children served in 2015. 
   
 
   
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  APPENDIX C:  STATES VERIFICATION CHECKS OF NEW CCDF PROVIDERS     
The tables below contain data regarding verification checks that States conduct for all, some, or none 
of their new CCDF providers prior to issuing payments.  Figure C1 displays the number of States that 
conducted eight verification checks for four types of CCDF providerschild care centers, family homes, 
group homes, and child homes.23  Figures C2 through C5 display data for 12 verification checks by each 
of the provider types. 
 
 Figure C1:  Number of States Performing Verification Checks of New Providers, by Provider Type 
50
45
40
35
30
25
20
15
10
5
0
Verify the Verify provider Verify Conduct onsite Perform State Check State Check State sex Require
identity of address compliance with visits to criminal child abuse offender fingerprinting
provider all State laws providers background database(s) registry(ies)
through pertaining to checks
document child care
review providers
D
All Centers All Group Homes All Family Home Providers All Child Home Providers
Source:  OIG analysis of States responses to OIG survey on CCDF program integrity, 2016.     
 
More Effort Is Needed To Protect the Integrity of CCDF (OEI-03-16-00150)  19 | P age 
   Figure C2:  Number of States that Conducted Checks on New Centers (n=49) 
Perform State criminal background checks
Verify the licensing status
k Check State child abuse database(s)
c
e
h Verify compliance with all relevant State laws
C
n  Verify the identity of provider
o
ati Verify the address
c
rifi Check State sex offender registry(ies)
e
V Require fingerprinting
f 
o
e  Conduct onsite visits
p
Ty Perform FBI criminal background checks
Check the U.S. System for Award Management (SAM)
Check the List of Excluded Individuals and Entities
0 5 10 15 20 25 30 35 40 45 50
Number of States
N=
Conducted for All Centers Conducted for Some Centers Conducted for No Centers
Source:  OIG analysis of States responses to OIG survey on CCDF program integrity, 2016.     
 
Figure C3:  Number of States that Conducted Checks on New Group Home Providers (n=43) 
Verify the licensing status
Check State child abuse database(s)
Perform State criminal background checks
k
c
e Verify compliance with all relevant State laws
h
C
n  Verify the identity of provider
o
ati Check State sex offender registry(ies)
c
rifi Conduct onsite visits
e
V
f  Verify the address
o
e  Require fingerprinting
p
y
T Perform FBI criminal background checks
Check the List of Excluded Individuals and Entities
Check the U.S. System for Award Management (SAM)
0 5 10 15 20 25 30 35 40 45 50
Number of States
N=
Conducted for All Group Homes Conducted for Some Group Homes Conducted for No Group Homes
Source:  OIG analysis of States responses to OIG survey on CCDF program integrity, 2016. 
 
More Effort Is Needed To Protect the Integrity of CCDF (OEI-03-16-00150)  20 | P age 
  Figure C4:  Number of States that Conducted Checks on New Family Home Providers (n=49) 
Check State child abuse database(s)
Perform State criminal background checks
Verify the licensing status
k
c
e Verify the identity of provider
h
C
n  Verify compliance with all relevant State laws
o
ati Verify the address
c
rifi Check State sex offender registry(ies)
e
V
f  Require fingerprinting
o
e  Perform FBI criminal background checks
p
y
T Conduct onsite visits
Check the List of Excluded Individuals and Entities
Check the U.S. System for Award Management (SAM)
0 5 10 15 20 25 30 35 40 45 50
Number of States
N=
Conducted for All Family Homes Conducted for Some Family Homes Conducted for No Family Homes
Source:  OIG analysis of States responses to OIG survey on CCDF program integrity, 2016. 
   
Figure C5:  Number of States that Conducted Checks on New Child Home Providers (n=47) 
Verify the identity of provider
Perform State criminal background checks
k
ec Check State child abuse database(s)
h
C Check State sex offender registry(ies)
n 
o Verify compliance with all relevant State laws
ti
a
c Verify the address
fi
ri Verify the licensing status
e
V
f  Require fingerprinting
o
e  Perform FBI criminal background checks
p
y
T Conduct onsite visits
Check the U.S. System for Award Management (SAM)
Check the List of Excluded Individuals and Entities
0 5 10 15 20 25 30 35 40 45 50
Number of States
N=
Conducted for All Child Home Providers Conducted for Some Child Home Providers Conducted for No Child Home Providers
Source:  OIG analysis of States responses to OIG survey on CCDF program integrity, 2016. 
 
 
More Effort Is Needed To Protect the Integrity of CCDF (OEI-03-16-00150)  21 | P age 
  APPENDIX D:  PROGRAM INTEGRITY RESULTS BY STATE, 20151 
Total Number of  Total Number of  Total Number of  Total Number of 
State  Referrals to Law  Clients  Providers  Program Violations 
Enforcement  Disqualified  Disqualified   and Errors 
Alabama   0  0  0  124 
Alaska   0  43  6  351 
Arizona   27  0  13  Unknown 
Arkansas   1  Unknown  0  Unknown 
California   Unknown  Unknown  Unknown  716 
Colorado   Unknown  Unknown  9  772 
Connecticut   0  7  0  377 
Delaware   Unknown  Unknown  Unknown  Unknown 
District of Columbia  Not Reported  Not Reported  6  Not Reported 
Florida   576  113  106  20,241 
Georgia   91  92  5  940 
Hawaii   Not Reported  Not Reported  Not Reported  Not Reported 
Idaho   Unknown  214  214  112 
Illinois   Unknown  Unknown  Unknown  392 
Indiana   14  6  95  66 
Iowa   03  Unknown  Unknown  862 
Kansas   7  0  0  372 
Kentucky   0  0  0  1,459 
Louisiana   0  0  4  4 
Maine   0  Unknown  Unknown  Unknown 
Maryland   15  15  0  15 
Massachusetts   0  Unknown  0  2842 
Michigan   91  51  197  Unknown 
Minnesota   Unknown  Unknown  0  Unknown 
Mississippi   Unknown  1  1  1232 
Missouri   Unknown  Unknown  Unknown  Unknown 
Montana   0  0  0  0 
Nebraska   Unknown  0  55  Unknown 
Nevada   Unknown  Unknown  Unknown  Unknown 
New Hampshire   14  0  0  25 
New Jersey   0  Unknown  1  Unknown 
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  Total Number of  Total Number of  Total Number of  Total Number of 
State  Referrals to Law  Clients  Providers  Program Violations 
Enforcement  Disqualified  Disqualified   and Errors 
New Mexico   4  4  0  Unknown 
New York   Unknown  Unknown  16  Unknown 
North Carolina   Unknown  Unknown  Unknown  Not Reported 
North Dakota   0  14  0  Unknown 
Ohio   0  0  14  902 
Oklahoma   4  0  2  97 
Oregon   Unknown  0  17  516 
Pennsylvania   Unknown  76  147  2952 
Puerto Rico  0  Unknown  Unknown  Unknown 
Rhode Island   Unknown  Unknown  0  Unknown 
South Carolina   0  0  0  Unknown 
South Dakota   0  5  2  18 
Tennessee   Unknown  0  12  16 
Texas   13  Unknown  Unknown  Unknown 
Utah   8  120  11  236 
Vermont   0  0  2  176 
Virginia   Unknown  5  18  587 
Washington   500  3  Unknown  9,3192 
West Virginia   0  91  0  725 
Wisconsin   1  0  31  725 
Wyoming   Not Reported  Not Reported  Not Reported  Not Reported 
Source:  OIG analysis of States responses to OIG survey on CCDF program integrity, 2016.  
1 Unknown means that the States response was Do Not Know to the OIG survey question regarding program integrity results; Not Reported 
means that the State did not respond to the OIG survey question. 
2 The State provided an overall total number of program violations and errors, but did not know the specific number for one or more of the types of 
violations and errorsi.e., intentional, unintentional, and administrative. 
3 Iowa reported zero for the total number of referrals to law enforcement, but noted that it makes possible fraud referrals directly to the Iowa 
Department of Inspections & Appeals. 
 
   
 
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  APPENDIX E:  IMPROPER PAYMENT INFORMATION AND ERROR RATES BY STATE 
The table below contains data States reported to ACF on their most recent Error Rate Reportsthe 
Improper Authorizations for Payment Reports (ACF-402) or the Improper Payments Reports (ACF-404).  ACF 
requires States to complete the Error Rate Review process to assess the accuracy of client eligibility 
determinations by conducting a standardized case record review of a sample of 271 or 276 casesi.e., client 
filesfrom a 12-month period.  ACF uses the information States report to generate a national error rate for 
the CCDF program.  Seventeen States completed the ACF-402 for FY 2012, 18 States completed the ACF-404 
for FY 2013, and 17 States completed the ACF-404 for FY 2014.  The Payment Error Rate provided in the 
table is the percentage of the total dollar amount of payments for a States sampled cases that were 
improper payments.  
 
Percentage of  Total  Amount of 
Fiscal  Payment   Sampled Cases  Overpayment  Overpayment 
State 
Year  Error Rate  with a   Amount for  State Expects to 
Payment Error  Sampled Cases  Recover 
Alabama   2013  3.37%  10.14%  $2,170  $1,961 
Alaska   2013  2.83%  12.68%  $2,986  $2,508 
Arizona   2014  0.07%  1.45%  $38  $0 
Arkansas   2014  0.03%  2.54%  $27  $0 
California   2013  5.82%  14.86%  $8,420  $0 
Colorado   2013  6.65%  13.65%  $7,096  $0 
Connecticut   2012  3.77%  11.59%  $2,796  $0 
Delaware   2014  16.35%  21.01%  $19,308  $0 
District of Columbia  2012  0.41%  5.80%  $593  $593 
Florida   2014  3.78%  17.75%  $2,831  $523 
Georgia   2013  3.08%  4.71%  $2,585  $2,585 
Hawaii   2012  22.78%  36.59%  $13,865  $1,386 
Idaho   2012  3.50%  15.22%  $1,504  $932 
Illinois   2013  0.25%  3.26%  $104  $50 
Indiana   2013  0.52%  0.36%  $552  $0 
Iowa   2014  5.50%  22.83%  $5,184  $1,413 
Kansas   2013  4.97%  17.75%  $3,246  $1,136 
Kentucky   2012  0.20%  2.54%  $85  $0 
Louisiana   2014  1.35%  3.62%  $768  $0 
Maine   2012  9.77%  34.78%  $6,698  $6,698 
Maryland   2012  0.23%  6.52%  $150  $150 
Massachusetts   2014  2.11%  5.80%  $3,649  $3,649 
Michigan   2012  30.07%  42.75%  $24,083  $4,537 
 
         
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  Percentage of  Total  Amount of 
Fiscal  Payment   Sampled Cases  Overpayment  Overpayment 
State 
Year  Error Rate  with a   Amount for  State Expects to 
Payment Error  Sampled Cases  Recover 
Minnesota   2012  18.91%  31.88%  $24,280  $3,625          
Mississippi   2014  36.43%  42.39%  $27,375  $0 
Missouri   2012  19.68%  29.35%  $16,594  $16,594 
Montana   2012  9.67%  21.01%  $9,254  $0 
Nebraska   2012  17.87%  19.20%  $45,783  $0 
Nevada   2013  0.73%  2.90%  $333  $0 
New Hampshire   2013  6.58%  11.23%  $6,942  $0 
New Jersey   2012  27.42%  29.71%  $20,006  $6,000 
New Mexico   2012  4.50%  18.12%  $3,123  $1,520 
New York   2014  7.91%  18.12%  $11,933  $10,000 
North Carolina   2012  0.42%  1.81%  $36  $82 
North Dakota   2013  2.71%  5.80%  $1,882  $1,882 
Ohio   2014  2.70%  10.51%  $2,792  $1,396 
Oklahoma   2013  4.90%  11.96%  $2,995  $0 
Oregon   2014  5.94%  22.46%  $5,693  $5,693 
Pennsylvania   2013  0.34%  2.54%  $470  $0 
Puerto Rico  2013  2.25%  8.33%  $1,089  $1,089 
Rhode Island   2014  0.73%  0.72%  $963  $963 
South Carolina   2012  3.98%  12.68%  $5,145  $0 
South Dakota   2014  0.04%  0.72%  $17  $0 
Tennessee   2014  0.54%  0.36%  $524  $0 
Texas   2013  2.20%  12.32%  $1,591  $0 
Utah   2014  2.55%  13.04%  $1,517  $1,517 
Vermont   2013  2.94%  7.61%  $3,078  $0 
Virginia   2014  7.50%  15.58%  $7,720  $0 
Washington   2013  0.61%  3.26%  $596  $596 
West Virginia   2013  9.91%  14.13%  $4,601  $0 
Wisconsin   2014  2.45%  7.61%  $2,814  $1,990 
Wyoming   2012  26.42%  43.12%  $28,302  $0 
 
Source:  States Error Rate Reports, 2012-2014. 
     
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  APPENDIX F:  AGENCY COMMENTS  
 
   
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ENDNOTES 
1 ACF, Office of Child Care, What We Do.  Accessed at http://www.acf.hhs.gov/programs/occ/about/what-we-do 
on May 4, 2016.  45 CFR 98.2 provides definitions for the types of CCDF child care providers.  The regulation uses 
the term in-home providers; however, ACF uses the term child home providers.  In the current regulation, 
group home providers are defined as a provider type.  However, in ACFs December 2015 Notice of Proposed 
Rulemaking, it has proposed to delete the group home designation, see 80 Fed. Reg. 80474, 80569 (December 24, 
2015).   
2 As defined in ACFs CCDF State plan template for FY 2014-2015, a subrecipient (including a subcontractor and/or 
subgrantee) is a non-Federal entity that expends Federal awards (contract or grant) received from another entity 
to carry out a Federal program.  It does not include a vendor, nor does it include an individual who is a beneficiary 
of such a program.  For example, a subrecipient may be a local agency that acts as a resource for families and 
assists with CCDF eligibility determinations.  
3 ACF, Office of Child Care, FUNdamentals of CCDF Administration, ch. 4, Section C on Direct Services Through 
Certificates and Contracts.  
4 OIGs Office of Audit Services has published a series of reports examining States use of CCDF targeted funds.  
These reports are available at http://oig.hhs.gov/. 
5 A program is classified as susceptible to significant improper payments if it has annual improper payments 
greater than $10 million and over 2.5 percent of all payments made under that program.  For more details, see 
Issuance of Appendix C to OMB Circular A-123.  Accessed at 
https://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a123/a123_appx-c.pdf on 
April 28, 2016.   
6 Department of Health and Human Services Fiscal Year 2015 Agency Financial Report, p. 205.  Accessed at 
http://www.hhs.gov/sites/default/files/afr/fy-2015-hhs-agency-financial-report.pdf on April 28, 2016.   
7 OIGs Office of Audit Services published 19 reports in this series.  A link to all 19 reports are available at 
http://oig.hhs.gov/oas/child-care/.    
8 Throughout this report, we use the term States to refer to the CCDF lead agencies for the 50 States, the 
District of Columbia, and Puerto Rico. 
9 ACF, Program Instruction CCDF-ACF-PI-2010-06, August 26, 2010.  Accessed at 
http://www.acf.hhs.gov/programs/occ/resource/pi-2010-06 on May 4, 2016. 
10 Prior to the Child Care and Development Block Grant Act of 2014, States submitted CCDF plans every 2 years, to 
cover a 2-year CCDF plan period.  ACF, Office of Child Care, CCDF Plans.  Accessed at 
http://www.acf.hhs.gov/programs/occ/plans on May 4, 2016. 
11 In the CCDF plan template, ACF defines program violations as intentional and unintentional client and/or 
provider violations as defined by the State.  In the CCDF plan template, administrative errors are defined as areas 
identified through error rate reviews performed by States. 
12 Section 5 of the Child Care and Development Block Grant Act of 2014, P.L. No. 113-186, amending Section 658E 
of the Child Care and Development Block Grant Act of 1990. 
13 Examples of other Government databases that States may match data to include those of the Department of 
Labor and the Internal Revenue Service.  Examples of other Government programs that States may match data to 
include Medicaid and the Temporary Assistance for Needy Families programs.   
14 One of the 17 States reported that it did not make any CCDF referrals to law enforcement in 2015.  Instead, the 
State made possible fraud referrals directly to the States Department of Inspections & Appeals for investigation.  
15 As stated in 80 Fed. Reg. 80475 (December 24, 2015), many States administer the CCDF program through the 
use of subrecipients that have taken on programmatic responsibilities, including providing services on behalf of 
the lead agency.  For example, some lead agencies operate primarily through a county-based system, while others 
devolve decision-making and administration to local entities such as workforce boards, school readiness 
coalitions, or community-based organizations such as child care resource and referral agencies.   
16 OIGs review of States most recent Error Rate Reports included 17 reports for FY 2012, 18 reports for FY 2013, 
and 17 reports for FY 2014.     
17 States submitted FY 2012 Error Rate Reports using the Improper Authorizations for Payment Report (Form 
ACF-402) and submitted FY 2013 and FY 2014 reports using the Improper Payments Report (Form ACF-404). 
 
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18 Department of Health and Human Services Fiscal Year 2015 Agency Financial Report, p. 205.   
19 45 CFR  98.60(i). 
20 OIG data collection interview with ACF staff, February 8, 2016. 
21 The CCDF Grantee Internal Controls Self-Assessment Instrument may be accessed online at 
http://www.acf.hhs.gov/programs/occ/resource/grantee-internal-controls-self-assessment-instrument; the most 
recent best practices document regarding States' strategies to reduce improper payment errors may be accessed 
online at https://childcareta.acf.hhs.gov/resource/states-strategies-reduce-improper-payment-errors-ccdf. 
22 80 Fed. Reg. 80474, 80569 (December 24, 2015). 
23 Not all States recognize group homes as a separate provider type.    
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  ACKNOWLEDGMENTS 
This report was prepared under the direction of Linda Ragone, Regional Inspector General for 
Evaluation and Inspections in the Philadelphia regional office, and Tara Bernabe, Deputy Regional 
Inspector General. 
Amy Sernyak served as the team leader for this study.  Other Office of Evaluation and Inspections staff 
from the Philadelphia regional office who conducted the study include Maria Johnson, Karolina Pater, 
and Margot Adams.  Philadelphia regional office staff who provided support include Tanaz Dutia, 
Conswelia McCourt, Jacqualine Reid, and Stefanie Vance.  Central Office staff who provided support 
include Melicia Seay, Sherri Weinstein, Althea Hosein, Joanne Legomsky, and Christine Moritz.  Other 
OIG staff who provided support include Jane Cys and Jessica Swanstrom. 
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