Texas Gov. Greg Abbott has directed state agencies to investigate and strengthen safeguards against potential fraud in Texas’ subsidized child care program, citing concerns raised by alleged misuse in other states and recent federal actions affecting child care payments.
Texas Gov. Greg Abbott on January 5 ordered a statewide review of potential fraud risks in the state’s Child Care Services Program, directing the Texas Workforce Commission (TWC) to work with the Texas Health and Human Services Commission (HHSC) on additional anti-fraud measures.
In a letter addressed to TWC Chairman Jose A. “Joe” Esparza and HHSC Executive Commissioner Stephanie Muth, Abbott said Texas already conducts audits and in-person visits and pointed to what he described as a low “improper payment” rate in Texas of 0.43% compared with Minnesota’s “approximately 11%,” citing “most recently available federal data.” Abbott said schemes like those “uncovered in Minnesota” can harm taxpayers and families waiting for child care assistance.
Abbott directed the agencies to identify “high-risk” providers and conduct additional site visits to ensure compliance with state and federal rules. He also ordered a review of data collection and other controls intended to prevent and detect fraud, including steps to ensure providers are “accurately and verifiably” reporting the number of children enrolled.
The letter also calls for reviews of oversight by Local Workforce Development Boards to ensure standards are applied uniformly statewide, with corrective actions and additional training for boards that do not meet program standards.
To increase public reporting and enforcement, Abbott instructed the agencies to enhance access to online reporting tools and a hotline for Texans to report suspected fraud. He also ordered that completed provider fraud investigations be referred to state or federal prosecutors “as appropriate.”
Abbott requested a progress report by January 30, 2026, and a final report by February 27, 2026.
The Texas directive follows recent federal actions focused on child care payment oversight. The U.S. Department of Health and Human Services said in late December it was freezing federal child care payments to Minnesota amid fraud allegations and that additional verification requirements would apply to child care funding nationwide.
