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Childcare Subsidy Funding Delays, Risk Irreparable Harm to Families and the Economy
Children of America CEO Ted Hockenberry Calls on State and Federal Leaders to Pursue Targeted, Collaborative Solutions That Protect Working Families Without Disrupting Access to Care
On behalf of Children of America (COA), our CEO Ted Hockenberry, has reached out to several state representatives to express serious concern regarding recent federal actions impacting childcare subsidy payments. While proposed funding freezes have been publicly associated with specific states – including Minnesota, California, Illinois, and New York. The activation of “Defend the Spend” by the U.S. Department of Health and Human Services for all CCDF grantees introduces payment delays that may affect every state. These delays will persist while states are required to defend their spend, creating widespread uncertainty and disruption across the childcare system.
“While we support strong accountability and effective fraud prevention, broad payment delays or freezes risk causing immediate and irreparable harm to working families, childcare providers, and the broader economy that depends on reliable access to care.”
For more than 25 years, Children of America has served hundreds of thousands of children and families across 18 states, providing high-quality early childhood education and care. Childcare subsidies are not discretionary programs; they are essential infrastructure that allows parents to work, employers to operate, and communities to function. Even short – term payment disruptions create cascading consequences:
Families lose care → Providers struggle to meet payroll & operating costs → Parents are forced out of the workforce.
The childcare sector comprises thousands of compliant, mission-driven operators – corporate providers, franchise systems, regional groups, and independent centers alike. Applying broad, systemic payment delays or freezes in response to fraud concerns unfairly penalizes responsible providers and the families they serve. When families are harmed, all of us are harmed.
As leaders in this space, we believe there is a better path forward. Fraud does exist, and it must be addressed—but in a way that is targeted, data-driven, and collaborative, rather than disruptive to care delivery.
Collaboration with providers like Children of America can help states adopt procedures to strengthen oversight by:
- Leveraging artificial intelligence and advanced analytics to identify anomalies in billing, attendance, and ratios.
- Validating subsidy claims through payroll records and staffing schedules, cross-referenced against licensed ratios and enrollment.
- Implementing risk-based audits rather than broad punitive measures.
- Partnering with experienced operators to design practical controls that protect public funds without destabilizing families or providers.
We respectfully urge federal and state leaders to reconsider approaches that rely on payment delays or funding freezes and instead pursue solutions that enhance accountability while preserving access to care. The childcare system is already under significant strain; further disruption risks long-term damage to workforce participation and economic stability.
Children of America stands ready to participate in discussions, pilot programs, or advisory efforts to help strengthen fraud prevention while ensuring continuity of care for the families who depend on these programs to work and contribute to their communities.
About Children of America
Children of America operates across 18 states: Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Maryland, Massachusetts, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Texas, Virginia, and Wisconsin.
For more information, visit www.childrenofamerica.com.
