Amidst growing concerns over federal child care funding, North Carolina officials are taking a proactive stance. Attorney General Jeff Jackson and Department of Health and Human Services Secretary Dev Sangvai addressed recent reports about potential federal funding freezes but clarified that the state has yet to receive any formal notification regarding such measures.
The Child Care and Development Fund (CCDF), a federal initiative managed by the U.S. Department of Health and Human Services, plays a crucial role in assisting low-income families by covering child care costs, thereby enabling parents to work or pursue education. These funds are vital for states, as they help reimburse child care providers, offset costs for eligible families, and uphold basic safety and quality standards. In North Carolina, subsidy payments are issued to providers post-attendance submission, making the HHS notification sent on Monday, Jan. 5, 2026, non-applicable to the state.
States utilizing CCDF resources are required to align with federal compliance through monitoring and reporting processes. This includes offering subsidy compliance training, conducting unannounced visits to review attendance records, providing technical assistance, investigating fraud cases, and implementing corrective action plans. Furthermore, the NCDHHS Division of Child Development and Early Education (DCDEE) collaborates with the Office of Internal Auditor to enhance fraud detection and prevention measures, ensuring that any identified overpayments are returned to the state.
“If fraud is discovered here, we will pursue it aggressively and make sure those responsible face consequences,” asserted Attorney General Jeff Jackson. “That’s what our fraud prosecutors do every day. When people steal taxpayer money, they’re stealing from kids and families. We have zero tolerance for it, and we’ll use every tool we have to stop it. The North Carolina Department of Health and Human Services has been a reliable partner in past efforts to uncover and stop fraud, and that partnership has helped us save taxpayers millions of dollars.”
“Our priority is making sure North Carolina’s children and families have access to the care and resources they need to thrive,” stated NC Health and Human Services Secretary Dev Sangvai. “We are committed to strong oversight so child care dollars are used appropriately and reach the families they are intended to support. We are working closely with our federal partners to protect funding and minimize any disruption for children, families, and providers.”
“We must protect taxpayers to make sure their hard-earned money goes to provide important services like child care, not to line some crook’s pockets,” remarked Governor Josh Stein. “As Attorney General, I led the Medicaid Investigations Division, which has recovered more than $1 billion for the Medicaid program and obtained nearly 700 criminal convictions in fraud and abuse cases since its inception. We will continue to partner with the federal government to fight fraud and preserve child care funding.”
The NCDHHS provides several avenues for reporting suspected fraud in the Subsidized Child Care Assistance Program:
- Contact the NCDHHS DCDEE Fraud Complaint Intake Unit at (800) 859-0829 (in-state) or (919) 814-6300. Calls can remain anonymous.
- Email concerns to webmasterdcd@dhhs.nc.gov.
- Send mail to DCDEE 2201 Mail Service Center, Raleigh, NC 27699-2200.
Recent efforts by the NCDOJ to curb fraud include:
- The conviction of a service dog seller who deceived families by selling untrained dogs, resulting in $353,000 in restitution.
- A $4.7 million judgment against a behavioral health company co-owner for fraudulent billing practices.
- The shutdown of a scam charity operation that misappropriated $45 million raised for women with breast cancer.
Read More Here
