Noncompliance due to fraud

Section 658I(b) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858g(b)) is amended— (1) by redesignating paragraph (3) as paragraph (4); and (2) by inserting after paragraph (2) the following: (3) Noncompliance due to fraud (A) Definition In this paragraph, the term final determination of fraud means a judicial decision or administrative order, for which all rights to appeal have been exhausted or waived, that determines that a child care provider— (i) knowingly submitted a false statement or documentation to obtain funds appropriated under any authority and available under this subchapter; (ii) misrepresented ownership of, enrollment at, attendance at, or services provided through a program of child care services, or the eligibility of the provider to provide such a program, to obtain such funds; (iii) to obtain such funds, operated without State licensing that is required under section 658E(c)(2)(F); (iv) made a knowing and improper expenditure of such funds; or (v) engaged in any other conduct related to such funds that constituted fraud under Federal or State law. (B) Reimbursement If the Secretary finds that there has been a final determination of fraud by a child care provider that received funds described in subparagraph (A)(i) from a State, the Secretary shall notify the State of the finding and shall require that the State reimburse the Secretary for the financial assistance that was the subject of the determination of fraud (referred to in this paragraph as financial assistance obtained through fraud), that the Secretary deduct from the administrative portion of the State allotment for the following fiscal year an amount that is less than or equal to the financial assistance obtained through fraud, or a combination of such options. (C) Additional sanctions If the Secretary makes a finding described in subparagraph (B), the Secretary may, in addition to imposing the sanctions described in such subparagraph, impose other appropriate sanctions, including recoupment of money improperly expended for purposes prohibited or not authorized by this subchapter, and disqualification from the receipt of financial assistance under this subchapter. (D) Mandatory permanent debarment (i) Debarment If the Secretary makes a finding described in subparagraph (B), the Secretary shall permanently debar the provider from participating in, or receiving financial assistance under, any Federal child care assistance program funded in whole or in part by the Department of Health and Human Services. (ii) No reinstatement No person may waive, reverse, or reduce the period or scope of a debarment made under clause (i). No child care provider, subject to such a debarment, may regain eligibility to participate in or receive financial assistance under a program described in clause (i) by changing the name of the provider or the program offered by the provider, by reorganizing, by merging with another entity, or by repaying the financial assistance that is the subject of the final determination of fraud. (iii) State compliance A State that receives funds described in subparagraph (A)(i) shall deny such participation, and such financial assistance, to any child care provider debarred under clause (i). (E) Mandatory referral for Federal criminal investigation and prosecution If a debarment made under subparagraph (D) is based on an administrative order, the Secretary shall refer the matter, including the administrative record containing the final determination of fraud, the order, and any supporting documentation, to the Attorney General to initiate a Federal criminal investigation and, if warranted, prosecution for fraud under chapter 47 of title 18, United States Code..