WASHINGTON – U.S. Senator Mike Lee (R-UT) cosponsored the Payment Integrity Act led by Senator Ted Cruz (R-TX) to address massive childcare fraud cases. The bill requires states to base funding for childcare providers on actual attendance rather than on reported enrollment, and allows states to grant payments retroactively rather than in advance. Senator Rick Scott (R-FL) also cosponsored the legislation.

“Support for childcare should go to real kids, not empty rooms,” said Senator Mike Lee. “Fake childcare operations are stealing funding from the ones who are actually taking care of America’s children in need. Our bill will address this massive fraud by granting funding based on actual attendance rather than reported enrollment, and allowing states to pay retroactively instead of in advance. This is the due diligence that should have been implemented all along.”

“Programs in Minnesota for welfare and childcare were designed to channel resources into protecting vulnerable children, but were treated like an open ATM by criminals,” said Senator Ted Cruz. “The mass fraud in Minnesota shows that American taxpayers can no longer rely on local and state politicians to prevent abuses, because those politicians often have electoral and partisan incentives to look the other way. My legislation reduces the risk of the waste and fraud we’ve seen, and ensures that resources are provided to children and families who need it.”

“I’m proud to join Senator Ted Cruz in cosponsoring the Payment Integrity Act to restore common sense and accountability to our child care system after we’ve seen astounding reports of fraud and abuse,” said Senator Rick Scott. “Hardworking American taxpayer dollars should only go toward services that are actually provided, not thrown carelessly without checking. This bill ensures the federal government is held accountable as stewards of tax dollars and reduces fraud and waste, so we can safeguard the critical resources for the families who truly depend on this support.”

Background

In Minnesota, 118,831 children ages five and under are eligible for CCDBG assistance, yet only 11,718 of those children — roughly 10% — received this support in 2025. As a result, the individuals exposed in Minnesota who stole upwards of $9 billion from American taxpayers did not merely commit financial fraud — they also diverted limited child care assistance away from families who genuinely need it.

The U.S. Department of Health and Human Services recently proposed this rule to rescind a Biden-era rule that reduced oversight and heightened the likelihood of waste, fraud, and abuse in federally funded child care. The Payment Integrity Act would codify the proposed language to restore attendance-based billing and would no longer require that providers be paid in advance.

Read exclusive coverage by Fox News here.

Read the full bill text here.

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