Program integrity is essential in child care funding, where complex eligibility rules, provider participation, and multilayered payment systems can create opportunities for fraud, waste, and abuse (FWA) when rules are inconsistent, attendance reporting is unreliable, or oversight is reactive rather than proactive. In the following Q&A, Vimo child care consultant Carrie Gray – a former licensed child care center director and state child care subsidy program manager – shares her insights on common FWA risks, strategies for strengthening oversight, and the role thoughtful policy design and government support can play in safeguarding funding while effectively serving families.
In your experience, where does program integrity risk most often emerge in the child care space?
From my experience with state programs, risks often arise between different programs. Many, such as Medicaid, TANF, SNAP, and child care, operate in silos within their agencies, yet they typically serve the same families. A common issue is the lack of reporting and coordination across these programs. Families may report different information to each program to maintain eligibility. However, since TANF, Medicaid, SNAP, and child care have distinct eligibility guidelines, what qualifies for one program may not for another. For instance, reporting an additional household member might increase SNAP benefits but reduce child care eligibility because their income must be considered. This inconsistency in reporting across programs can lead to fraud.
Another area of risk is how child care agencies determine eligibility. A lot of them still require a significant amount of documentation upfront, which can be a barrier for families. When access is difficult, families may feel pressured to fudge or falsify information just to receive benefits. In some cases, policies and procedures are so strict for the customers being served that they unintentionally contribute to higher levels of fraud, as families are simply trying to access the program.
How does addressing risk upstream – during eligibility, authorization, or validation – change outcomes compared to relying primarily on post-payment review or audits?
Payment methods vary by state, with some issuing payments directly to providers and others to families, who then pay the providers. This can complicate the process of recouping improper payments – should the collection be from the family or the provider who received the payment? Consequently, accurately determining eligibility is crucial to ensure the validation of correct payments for child care assistance.
How do technology and operational practices need to work together to meaningfully reduce fraud, waste, and improper payments?
Alignment is essential, particularly as documentation requirements can create access barriers. Business process redesign (BPR) is crucial for determining the necessary steps to validate eligibility. This includes identifying acceptable documents, setting time frames for submission, and defining the methods by which families can provide these documents.
A lot of the work we’ve done has focused on redesigning those processes. Making policies more family friendly is a big piece of that, and it’s something we emphasize with the clients we serve when doing BPR work. The more family friendly and accessible the process is, the less potential there is for fraud.
A good example of this is Vimo’s Child Care Exchange (CCX). It provides strong checks and balances, and that’s been a huge success in Wyoming, where CCX was implemented last year under the name ECARES. It’s created a safety net and peace of mind for Wyoming, helping them be confident that they’re being good stewards of the federal funding they receive. As a small state, they don’t get much federal funding, so they have to be very thoughtful about how they spend it. CCX has given them added comfort in knowing that the money is being managed wisely. [For more details, see “CCX: Preventing Improper Payments,” below.]
There’s often concern that stronger controls may slow access or burden families and providers. How can programs strengthen integrity while still supporting timely, predictable access?
Balancing integrity and access involves making processes more straightforward and family-friendly. The Office of Child Care’s 2016 reauthorization required states to implement an online application, significantly improving accessibility. Enhancing this by allowing families to submit eligibility documentation directly through the online platform is crucial. Once you have a family’s attention, it’s important to maintain it and gather as much information as possible in one place.
We also see this with CCX, where families can receive eligibility immediately. States are moving toward presumptive eligibility, where families receive eligibility for the first 30 days and then have that time to provide any additional documentation. Putting those types of processes in place makes access easier for families and reduces fraud by streamlining verification.
On the back end, the work we’ve done with Wyoming includes connecting directly to sources like vital records and workforce data to validate information without requiring families to upload additional documentation. Going straight to the source, rather than relying on families to provide everything, results in more effective and efficient eligibility determinations.
For providers, payment has always been a big issue. This was something I dealt with constantly while working in a state’s child care subsidy program. Providers would submit attendance for what we called “ghost children” – children who were enrolled but not attending, or attendance submitted for days the child wasn’t actually there. There are a lot of scenarios where it’s hard to validate actual attendance and services rendered.
One thing that’s helped is having providers review and submit attendance themselves for payment and certify that, to the best of their knowledge, it’s accurate. When payments are made based on that certification, the state has a little more ground to go back and say, “Hey, you acknowledged this was correct, and we found that it wasn’t.” That makes it easier to monitor payments, recoup funds when needed, and be more proactive rather than reactive in payment validation.
When evaluating success in program integrity, what indicators matter most, beyond cost savings?
I don’t think we’ll ever be able to say that fraud is 100 percent gone, right? People who commit fraud are clever, and they tend to find new ways around whatever measures are put in place. So for me, one of the biggest indicators of success is simply reducing the amount of fraud and making it harder to take advantage of the program.
Another important indicator of success is maintaining the integrity of state policies. This means making sure policies are regularly reviewed, monitored, and adjusted based on what agencies are seeing in practice. While 100% case monitoring would represent best practice, it’s not feasible for all states. Even so, increasing the percentage of case reviews significantly strengthens oversight, helping to ensure proper eligibility determinations and accurate payments. When outcomes reveal areas where eligibility requirements or policies could be tightened, states must be able to respond, supported by ongoing and meaningful monitoring to keep policies sound and effective.
Success is further demonstrated by the ability to serve more families. When programs avoid paying out fraudulent claims, those funds can be redirected to provide services to families awaiting care. Thus, strong program integrity is not only about cost savings; it directly supports access for families who need services the most.
Is there an increase in public trust if you put those measures in place and can clearly show measurable reductions in fraud?
Absolutely. It also fosters trust at the governmental level. States must report to the federal government on all aspects related to the Child Care and Development Fund (CCDF) and the block grant. This reporting encompasses more than child care subsidies; it includes provider licensure, payments, and quality initiatives linked to provider outcomes.
Since all these activities are funded through the same block grant, integrity measures strengthen more than just eligibility determinations. They uphold the integrity of all expenditures across the grant. Demonstrating, with data, that fraud is being reduced reinforces trust with federal partners and shows that states are managing these funds responsibly.
Looking ahead, what design principles do you believe will matter most for states seeking to strengthen program integrity across human services?
I think one of the most important design principles is the constant review of policies and the outcomes states are seeing around eligibility. That includes regularly auditing provider payments and making sure states are continuing to be good stewards of the funding they receive.
You can’t put policies in place and then never go back and look at them again. States need to be willing to modify or adjust policies based on trends they’re seeing and what the data is telling them, so program integrity efforts stay effective over time.
You mentioned earlier that any new policies or controls can be exploited by someone determined to commit fraud. How do agencies stay vigilant while still supporting families?
Absolutely. Now more than ever, unfortunately – when times are tough, our programs tend to see increased demand. People are struggling more than they have in recent years, and they’re trying to find new and creative ways to make ends meet because they need support. Agencies have to be cognizant of that reality. It’s important not to let concerns about fraud tarnish interactions with families or shape assumptions about their intentions. At the same time, agencies can’t afford to be blindsided or ignore the ways policies might be taken advantage of. It’s really a balancing act – making sure public funds are being used responsibly, but also not putting up unnecessary barriers for families who genuinely need access to services.
As demand for services grows and caseloads increase, staff capacity to monitor everything can become limited. How can agencies address that challenge?
Right, it is definitely a struggle. Agencies can’t always complete every check and balance because staff capacity and time are limited. That makes it even more important to build in regular review processes – quarterly, semi-annually, or on whatever schedule works – to make sure they’re staying on top of things and maintaining program integrity.
How is government support for states important in strengthening program integrity and ensuring effective use of funds?
In my experience, having overseen the child care program at the government level for a long time, I’ve seen the Office of Child Care make significant strides in supporting states. They’ve provided a lot of resources, including fraud toolkits that agencies can use to implement fraud safety nets and other measures. They’ve also consistently provided technical assistance to help agencies improve integrity practices.
I think it’s really important for agencies to have a strong partnership with the Office of Child Care and the Administration for Children and Families. That collaboration helps ensure that best practices are maintained and that agencies receive the support they need. At the end of the day, it’s about being good stewards of the funding while continuing to provide services to families.
CCX: Preventing Inappropriate Payments
Vimo’s Child Care Exchange (CCX), launched in Wyoming in 2025 as ECARES, was designed to make child care subsidies easier to access for families and providers – while including strong controls to prevent improper payments and reduce fraud. Among the solution’s key measures:
- Enrollments and authorizations are issued only to providers who are licensed or DFS-exempt and have acknowledged receiving subsidies.
- Providers receive attendance sheets based on parent-submitted schedules and must verify each child’s attendance before payments are processed.
- Payments cannot be processed for any provider without a valid Vendor Customer Number linked to their facility.
- After payments are issued by DFS, detailed records are posted to each provider’s ECARES account for review and reconciliation.
- Families who believe an incorrect payment has been made to a provider can dispute it and notify DFS for further investigation.
Through these layered checks and balances, ECARES significantly reduces the risk of improper or fraudulent payments, strengthening the integrity of child care subsidy distribution.
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