Children at Risk, the Early Education Leaders Coalition, and the North Texas Early Education Alliance appreciate Lieutenant Governor Patrick’s Interim Charge and the Committee’s prioritization of child care program integrity through this timely hearing.

The subsidized child care program in Texas is like Texas itself – large, varied, and essential to our economy. It supports working families, enables employers to maintain a stable workforce, and ensures children have safe learning environments while their parents work or pursue education.

Texas takes the stewardship of public dollars seriously. The state operates one of the strongest child care systems in the country. The CCS program serves over 150,000 children annually while maintaining an improper payment rate of approximately 0.43 percent – well below the national average of 3.55% and far under the 10% federal threshold for corrective action.

It is important to distinguish between fraud and improper payments. Fraud involves intentional misrepresentation, while improper payments are often the result of administrative or timing issues, such as documentation gaps or eligibility updates. In Texas, most improper payments fall into this latter category and are identified and corrected through existing oversight systems.

This performance reflects a system intentionally designed to balance strong fiscal oversight with access for working families. Texas employs a comprehensive, multi-layered approach to prevent, detect, and correct misuse of funds:

• Shared accountability structure: Oversight is distributed across the Texas Workforce Commission (TWC), 28 Local Workforce Development Boards, and contracted providers.
• Rigorous up-front eligibility verification: Families must meet strict income and work requirements, verified at enrollment and regularly revalidated.
• Data monitoring and analytics: Systems identify unusual attendance or billing patterns early.
• On-site monitoring: Regular, in-person visits confirm attendance and provider compliance.
• Centralized tracking and enforcement: The Program Integrity Reporting and Tracking System (PIRTS) ensures investigations, recovery of funds, and accountability.

Together, these safeguards ensure that improper payments are identified, corrected, and deterred – while maintaining program access for eligible families.

While Texas’ framework safeguards against fraud, the following targeted improvements can further strengthen transparency, efficiency, and accountability:

• Most urgently, resolve technological challenges with TWC’s Child Care Services platform (TX3C), including periodic data visibility issues and coding errors contributing to improper payments
• Require the timely publication of publicly available, board-level CCS data, including children served and those on waiting lists, disaggregated by priority level, age, and zip code
• Expand the capability of state and local CCDF contractors to better leverage technology, including artificial intelligence, to improve efficiency in detecting improper payments or fraud
• Establish an interagency workgroup to develop and implement a comprehensive Early Childhood Integrated Data System to ensure publicly funded programs are aligned and outcomes-driven
• Require biennial audits of intake and eligibility contractors
• Establish standardized financial and programmatic accountability across all local workforce boards and their contractors
• Conduct a comprehensive analysis every ten years of how federal and state child care funds are distributed across workforce boards, including population shifts and labor market changes

Texas’s CCS system is large and complex. The opportunity before us is to strengthen the current operations. These recommendations will improve transparency, modernize oversight, and ensure that public investments in child care continue to deliver for Texas families, employers, and taxpayers.

We respectfully request your support for these recommendations & child care for Texans. 

Children At Risk
Early Education Leaders Coalition
North Texas Early Education Alliance