,,ii #aaith ,,congress #b;d ,session ,s4 #diei ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #ad1 #bjbf,mr4 ,cassidy 7for himself and ,mr4 ,tuberville7 introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to amend the ,child ,care and ,development ,block ,grant ,act of #aiij to require that ,states pay child care providers on the basis of attendance1 to allow ,states to pay the providers through reimbursement1 and to establish requirements relating to error reports1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,strengthening ,transparency and ,oversight to ,prevent ,child ,care ,fraud ,act or the ,,stop ,child ,care ,fraud ,act4 #b4 ,payment practices and verification 7a7 ,state plan ,section #feh;,e of the ,child ,care and ,development ,block ,grant ,act of #aiij 7#db ,u4,s4,c4 #iheh;c7 is amended-- 7#a7 in subsection 7c77#b7-- 7,a7 subparagraph 7,k77i7-- 7i7 in subclause 7,,iii71 by striking and at the end2 7ii7 in subclause 7,,iv71 by striking the period and inserting 1 and2 and 7iii7 by at the end the following3 7,v7 require licensing inspectors conducting an onsite inspection under subclause 7,,ii7 to conduct a brief review of compliance with enrollment requirements by the child care provider involved2 2 7,b7 in subparagraph 7,n77i71 by adding at the end the following3 7,,iii7 ,changes in income ,the plan shall demonstrate that the ,state requires a parent referred to in subclause 7,i71 who experiences a change in the ongoing status of the parent as working or attending a job training or educational program or whose family experiences a change in family income1 shall report the change involved to the ,state not later than #ij days after the change4 2 7,c7 in subparagraph 7,s71 by striking clause 7ii7 and inserting the following3 7ii7 an assurance that the ,state will1 notwithstanding clause 7i71 provide payment under this subchapter to a child care provider based on an eligible child's verified attendance1 but support the fixed costs of providing child care services by delinking provider payments from the child's occasional absences by providing full payment if the child is absent for #f or fewer days in a month4 2 and 7,d7 by adding at the end the following3 7,w7 ,timing of billing and payment ,the plan shall describe how the lead agency for the ,state will establish payment practices that ensure timeliness of billing by and payment of child care providers under this subchapter by-- 7i7 requiring that such a provider submit a complete invoice within #i months after the date on which the provider delivers the services involved2 and 7ii7 paying within not more than #ba calendar days after the receipt of a complete invoice for services4 7,x7 ,verification of eligibility 7i7 ,verification ,the plan shall describe how1 if a parent seeks child care assistance for a child under this subchapter1 the ,state will verify 7without self-certification7 the eligibility of the child1 including verifying the income and assets of the child's family1 the size of the family involved1 the county or other political subdivision in which the child resides 7subject to paragraph 7#c77;,b77i771 that the individual for whom the parent seeks child care assistance is the child of the parent1 and whether the parent and the child either are citizens or are not ineligible for ,federal public benefits under title ,,iv of the ,personal ,responsibility and ,work ,opportunity ,reconciliation ,act of #aiif 7#h ,u4,s4,c4 #afja et seq474 7ii7 ,no presumptive eligibility ,the plan shall include an assurance that1 subject to paragraph 7#f71 the ,state will not consider a child to be presumptively eligible1 or allow the child to receive a child care subsidy prior to a full documentation and eligibility determination1 within the meaning of section #ih4ba7;e7 of title #de1 ,code of ,federal ,regulations 7as in effect on the day before the date of enactment of the ,,stop ,child ,care ,fraud ,act71 subject to subparagraph 7,i77i77,i7 and paragraph 7#c77;,b77i74 7,y7 ,verification of attendance with electronic authentication tools 7i7 ,definition ,the term electronic authentication tool means an electronic tool that authenticates the identity of a parent or other person dropping off or picking up a child from a child care provider1 such as a finger imaging device or an interactive voice response device4 7ii7 ,use ,the plan shall describe how the ,state will require a center-based eligible child care provider receiving assistance1 or a center-based eligible child care provider that receives a child care certificate1 under this subchapter to use electronic authentication tools1 including to verify attendance4 7,z7 ,integration and analysis of data from data systems ,the plan shall describe how the ,state will-- 7i7 integrate data from different data systems1 including records on child care providers 7including on licensing of child care providers1 subsidies for child care providers1 and eligibility for those subsidies71 and employment records2 7ii7 use data analytics to clean1 analyze1 and interpret the data described in clause 7i71 particularly to identify anomalous patterns indicative of potential fraud by child care providers2 and 7iii7 analyze the robustness of the data integration described in clause 7i74 2 7#b7 by adding at the end of subsection 7c7 the following3 7#f7 ,exceptions to prohibition on presumptive eligibility ,the ,secretary may determine or specify that ,states may determine exceptions1 for emergency situations1 to the requirements in paragraph 7#b77,x77ii7 relating to presumptive eligibility and full documentation and eligibility determinations4 2 and 7#c7 by adding at the end the following3 7e7 ,posting ,state plans and related documents ,each ,state that receives a payment for the program carried out under this subchapter shall post1 on a publicly available website1 each ,state plan or ,state plan amendment proposed by the ,state or approved under this section for the ,state1 and each corrective action plan issued for the ,state due to ,state noncompliance with this subchapter 7including any failure described in section #feh;,i7b77#b77;,a774 7f7 ,regulations on attendance verification ,not later than #a year after the date of enactment of the ,,stop ,child ,care ,fraud ,act1 the ,secretary shall issue regulations that specify the manner in which a ,state shall verify attendance for purposes of subsection 7c77#b77,s77ii71 including the manner in which the ,state will require the use of electronic authentication tools to verify that attendance under subsection 7c77#b77,y74 ,such regulations shall take effect #a year after the date of issuance4 4 #c4 ,activities to improve quality ,section #feh;,g of the ,child ,care and ,development ,block ,grant ,act of #aiij 7#db ,u4,s4,c4 #iheh;e7 is amended-- 7#a7 in subsection 7a71 by inserting at the end the following3 7#d7 ,portion for quality and compliance activities ,of the funds reserved under paragraph 7#b77;,a71 the ,state shall set aside #c percent of the funds described in paragraph 7#a7 to carry out activities under subsection 7b77#aj74 2 7#b7 in subsection 7b7-- 7,a7 by redesignating paragraph 7#aj7 as paragraph 7#aa72 and 7,b7 by inserting after paragraph 7#i7 the following3 7#aj7 ,carrying out activities designed to improve the quality of child care services1 in accordance with ,state priorities1 and activities to meet ,state requirements for inspection1 monitoring1 and licensing of child care providers receiving funding under this subchapter4 2 and 7#c7 in subsection 7d77#b71 by inserting and in particular the activities carried out with funds set aside under subsection 7a77#d7 before the semicolon4 #d4 ,review of compliance ,section #feh;,i7b7 of the ,child ,care and ,development ,block ,grant ,act of #aiij 7#db ,u4,s4,c4 #iheh;g7b77 is amended-- 7#a7 by striking paragraph 7#a7 and inserting the following3 7#a7 ,review of compliance 7,a7 ,in general ,not less often than once every #c years1 the ,secretary shall review and monitor ,state compliance with this subchapter1 including with the plan approved under section #feh;,e7c7 for the ,state4 7,b7 ,heightened monitoring ,states designated as high-risk under subparagraph 7,c7 shall be subject to monitoring1 of that ,state compliance1 that is more frequent than the monitoring required under subparagraph 7,a71 with the frequency determined by the ,secretary4 7,c7 ,high-risk ,the ,secretary shall designate as high-risk any ,state with-- 7i7 unresolved or repeated audit findings under section #feh,k7b72 7ii7 an improper payment rate that exceeds #f percent1 as reflected in #b consecutive reports described in section #feh,k7a77#c77;,a77i72 or 7iii7 an improper payment rate that exceeds #i percent1 as reflected in such a report4 2 7#b7 in paragraph 7#b7-- 7,a7 in subparagraph 7,b7-- 7i7 by striking ,secretary may and inserting ,secretary shall2 and 7ii7 by striking subchapter1 and and inserting subchapter1 withholding of funds or a percentage reduction of funds from the ,state allotment for the following fiscal year1 or2 and 7,b7 in subparagraph 7,c71 by striking additional sanction being imposed under subparagraph 7,b7 and inserting additional sanction or penalty being imposed under subparagraph 7,b7 or 7,c72 7#c7 by redesignating paragraph 7#c7 as paragraph 7#e72 and 7#d7 by inserting after paragraph 7#b7 the following3 7#c7 ,penalties ,if the ,secretary determines that an amount shall be reimbursed1 deducted1 recouped1 withheld1 or reduced under subparagraph 7,a7 or 7,b7 of paragraph 7#b7 for a ,state1 the ,secretary shall increase that amount by adding a penalty equal to #e percent of the amount against the ,state4 7#d7 ,corrective action plans 7,a7 ,submission ,if the ,secretary finds under paragraph 7#b7 that a ,state has made an improper expenditure of funds1 and the ,secretary does not disqualify the ,state under that paragraph from receiving financial assistance1 then the ,secretary shall require the ,state to submit to the ,secretary for approval1 not later than the date that is #fj days after that finding1 a corrective action plan with an implementation date4 7,b7 ,failure to submit 7i7 ,extension of submission date ,a ,state may request from the ,secretary an extension of the submission date determined by the ,secretary under paragraph 7#a74 7ii7 ,withholding ,if the ,state fails to submit the plan by that submission date 7including any extension granted under clause 7i771 the ,secretary shall withhold funds for the program carried out under this subchapter for that ,state until the ,state submits the plan4 7,c7 ,failure to implement 7i7 ,in general ,subject to clause 7ii71 if the ,secretary determines that the ,state fails to implement the corrective actions in the plan by that implementation date1 the ,secretary shall withhold funds for the program carried out under this subchapter for that ,state until the ,secretary determines that the ,state has implemented those corrective actions4 7ii7 ,good faith exception ,if the ,secretary determines that the ,state is acting in good faith to implement the corrective actions as soon as is practicable1 the ,secretary may elect not to withhold funds1 or to postpone that withholding1 under clause 7i74 4 #e4 ,reports and audits 7a7 ,error report requirements 7#a7 ,in general ,section #feh,k7a7 of the ,child ,care and ,development ,block ,grant ,act of #aiij 7#db ,u4,s4,c4 #iheh;i7a77 is amended by adding at the end the following3 7#c7 ,error reports 7,a7 ,rulemaking ,the ,secretary shall issue regulations to1 at a minimum-- 7i7 ensure that1 in calculating1 preparing1 and submitting reports of errors1 under subpart ,k of part #ih of title #de1 ,code of ,federal ,regulations 7or a successor regulation71 in the administration of grant funds appropriated or made available under this subchapter1 ,states include suspected and verified cases of fraud as improper payments2 7ii7 require any ,state with an improper payment rate that exceeds #f percent1 as reflected in a report described in clause 7i71 to submit to the ,secretary for approval a comprehensive corrective action plan1 as well as submitting to the ,secretary subsequent reports describing progress in implementing the plan2 and 7iii7 require each ,state to conduct case reviews and submit reports described in clause 7i7 to the ,department of ,health and ,human ,services according to a staggered #b-year cycle established by the ,secretary such that each ,state will be selected once1 and only once1 in every #b years1 notwithstanding subchapter ,,iv of chapter #cc of title #ca1 ,united ,states ,code4 7,b7 ,availability ,the ,secretary1 on receiving a report described in subparagraph 7,a71 shall post the report on a publicly available website4 ,the ,secretary shall also post on that website any corrective action plan that is described in this subchapter and approved for a ,state that is described in section #feh;,e7e74 7,c7 ,,gao review ,the ,comptroller ,general of the ,united ,states shall-- 7i7 review fraud and improper payments that-- 7,i7 involve funds described in subparagraph 7,a77i72 7,,ii7 are committed at the ,state1 local or regional level1 as appropriate2 and 7,,iii7 are covered in sources including reports described in subparagraph 7,a77i7 and corrective action plans submitted to the ,secretary by ,states2 and 7ii7 offer recommendations to the ,inspector ,general of the ,department of ,health and ,human ,services and to the ,secretary for additional oversight4 7,d7 ,state ,in this paragraph1 the term ,state means any of the #ej ,states1 the ,district of ,columbia1 and the ,commonwealth of ,puerto ,rico4 4 7#b7 ,interim final rule ,not later than #a year after the date of enactment of this ,act1 the ,secretary shall promulgate an interim final rule amending sections #ih4ajj through #ih4ajb of title #de1 ,code of ,federal ,regulations1 as in effect on ,january #ab1 #bjbf1 to promulgate the regulations required under section #feh,k7a77#c77;,a7 of the ,child ,care and ,development ,block ,grant ,act of #aiij 7#db ,u4,s4,c4 #iheh;i7a77#c77;,a771 as added by paragraph 7#a74 7b7 ,audits ,section #feh,k7b7 of the ,child ,care and ,development ,block ,grant ,act of #aiij 7#db ,u4,s4,c4 #iheh;i7b77 is amended-- 7#a7 by striking paragraph 7#c7 and inserting the following3 7#c7 ,submission of audit report and corrective action plans 7,a7 ,appeal of audit findings 7i7 ,filing ,not later than #fj days after the ,state receives the independent auditor's report under paragraph 7#b71 the ,state may file with the ,secretary an appeal of the audit findings contained in the report4 7ii7 ,decision ,not later than #abj days after the filing of the appeal1 the ,secretary shall issue a decision on the appeal1 specifying whether any audit findings shall be removed from the report and1 if so1 which findings4 ,the ,state shall use the updated auditor's report1 after making the removals specified by the ,secretary1 for purposes of subparagraphs 7,b7 and 7,c74 7,b7 ,submission of report and plan ,not later than #cj calendar days after the ,state receives the independent auditor's report under paragraph 7#b7 or1 in the event of an appeal under subparagraph 7,a71 not later than #ij calendar days after the ,secretary's decision is issued on the appeal1 the ,state shall submit-- 7i7 to the legislature of the ,state and1 if applicable1 to the ,indian tribe or tribal organization involved-- 7,i7 a copy of the auditor's report2 and 7,,ii7 for approval1 a corrective action plan to address each negative audit finding included in the auditor's report for the current reporting2 and 7ii7 to the ,secretary1 a copy of the auditor's report and 7for approval by the ,secretary7 the corrective action plan4 7,c7 ,contents of corrective action plan ,the corrective action plan shall include the name of the contact person responsible for the corrective action1 the corrective action to be taken1 and the anticipated completion date1 which shall be not later than #a calendar year after the ,state received the independent auditor's report under paragraph 7#b74 ,if the ,state does not agree with #a or more audit findings in the report or believes corrective action is not required1 the corrective action plan shall include a detailed explanation of the reasons4 2 and 7#b7 by adding at the end the following3 7#e7 ,inspector general report ,not less often than every #b years1 the ,inspector ,general of the ,department of ,health and ,human ,services shall prepare and submit to the ,secretary a report on ,states that fail audits under this subsection1 and shall include recommendations for ,states that need additional monitoring and technical assistance4 4 7c7 ,database on providers ,section #feh,k of the ,child ,care and ,development ,block ,grant ,act of #aiih 7#db ,u4,s4,c4 #iheh;i7 is amended by adding at the end the following3 7c7 ,database on providers under ,administration for ,children and ,families 7#a7 ,state reports ,if a ,state1 or providers in a ,state1 receive ,federal funding through a program administered by the ,administration for ,children and ,families1 the ,state shall provide annual reports to the ,assistant ,secretary of the ,administration for ,children and ,families4 ,each such report shall name the individuals who served as providers under such a program but are disqualified by the ,state from receiving ,federal funding through the program because the providers were found by a court to have committed fraud in carrying out the program4 7#b7 ,database ,the ,secretary1 acting through the ,assistant ,secretary of the ,administration for ,children and ,families1 shall maintain a database of the providers named in such a report4 ,the ,secretary shall list a provider in the database for the period of the provider's disqualification by the ,state4 7#c7 ,prohibition on funding listed providers ,the ,secretary shall1 when approving an application for ,federal funding under such a program-- 7,a7 from a ,state1 prohibit the ,state from using any of the ,federal funding for a provider listed in the database2 and 7,b7 from a provider1 prohibit the provider from receiving the ,federal funding if listed in the database4 4 #f4 ,eligibility ,section #feh,p7#d7 of the ,child ,care and ,development ,block ,grant ,act of #aiij 7#db ,u4,s4,c4 #ihehn7#d77 is amended-- 7#a7 by striking subparagraph 7,b7 and inserting the following3 7,b7 whose family assets do not exceed #ejj1jjj 7as determined by the ,state involved71 excluding the net value of a family farm described in subparagraph 7,b71 or a commercial fishing business and related expenses described in subparagraph 7,d71 of section #dhj7;f77#b7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhgvv7f77#b772 and 2 and 7#b7 by striking subparagraph 7,c7 and inserting the following3 7,c7 who-- 7i7 resides in a family that is headed by a person who is the child's parent1 who is working or attending a job training or educational program1 and that has a family income that does not exceed #he percent of the ,state median income for a family with the same number of children headed by a person1 based on the most recent data that is published by the ,bureau of the ,census2 7ii7 resides in a family that is headed by two persons who are the child's parents1 and who work a combined total of at least #dj hours per week1 with a family income that does not exceed #he percent of the ,state median income for a family with the same number of children headed by two persons1 based on the most recent data that is published by the ,bureau of the ,census2 or 7iii7 is receiving1 or needs to receive1 protective services and resides with a parent or parents not described in clause 7i7 or 7ii74 4