Accountability and oversight are essential. So is building a child care system that works for families and caregivers

Across the country, families, providers, and communities rely on child care systems that are expected to be both dependable and affordable. When those systems face uncertainty, whether from breakdowns in oversight, delays in payments, or shifts in funding administration, the effects ripple quickly across entire communities. Providers worry that payment delays could force them to close their doors. Families worry about losing the care they rely on to show up at work. Employers and local governments feel the strain through broader workforce disruptions.

Over the past two weeks, increased federal scrutiny of child care subsidy programs in several states has brought renewed attention to how child care funding is administered and safeguarded. This attention reflects growing concerns around payment integrity and oversight.

It has also brought into focus a deeper reality: systems designed decades ago are being asked to carry far more weight than they were built for.

Founded in 2017, Upwards operates the nation’s largest network of licensed and vetted child care providers and serves as modern child care infrastructure for governments, employers, families, and providers—from frontline workers and military families to municipalities and statewide programs.

Since the beginning, our work has been guided by a clear principle: child care systems must protect public investment while also meeting the real needs of families and providers who depend on them.

As Upwards’ CEO and Co-Founder Jessica Chang puts it: “Accountability and accessibility are not competing goals. Oversight is important, but it is not the full vision. Inefficiencies point to a broader need to modernize the entire child care ecosystem so payments move predictably, administrative burdens are reduced, and real families can fully access the support that exists.”

What’s happening with child care funding right now

In recent days, federal agencies have begun applying additional review and verification requirements to certain child care subsidy programs in a limited number of states.

• The U.S. Department of Health and Human Services (HHS) has temporarily restricted access to certain social services program funds in a limited number of states, including Minnesota, as part of a federal review related to program integrity and compliance.
• Similar actions affecting child care and related funding streams, including the Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant (SSBG), have been reported in New York, California, Illinois, and Colorado. In response, the affected states have initiated legal action seeking to lift the restrictions.

These actions do not represent a nationwide suspension of CCDF funding. Instead, they reflect increased documentation, verification, and review requirements that states must meet before accessing federal funds.

Why oversight alone isn’t enough

Fraud at any level is unacceptable and takes critical child care resources away from the families who depend on them most. The current focus on attendance verification and compliance protections is important. But oversight, while essential, addresses only one part of the challenge, and does not guarantee efficient delivery or full use of the support available. Families and providers still face everyday barriers to reliable, accessible care.

For families, those barriers include:

• Onerous, manual application processes
• Slow response times
• Lack of visibility into status or waitlists
• Payment and approval delays that force families to forgo subsidies altogether

For providers:

• 30 to 60 day payment cycles after care has already been provided, making payroll and cash-flow planning difficult and unpredictable;
• paperwork burdens that strain small businesses operating on razor-thin margins;
• many providers, focused on care and education, ultimately opt out of subsidy programs because they lack the time or resources to manage administrative requirements, limiting access to quality care for families who rely on subsidies

These issues existed long before recent headlines, but they now sit at the center of whether child care funding can function as intended.

What needed child care modernization looks like

Across the industry, government leaders are exploring how technology and process improvements can reduce fraud while simultaneously making programs easier to use. This includes:

At Upwards, we’ve spent the past eight years building systems with these principles in place, strengthening accountability while improving how families find and access care, how programs are administered, and how payments are verified and delivered.

In practice, that looks like:

• Real-time verification and accountability as part of configurable program designs:
  Eligibility and attendance are confirmed by both parents and providers before payments are released, ensuring funds are used as intended without creating delays for families who qualify.
• Transparent, intuitive experiences for families:
  Application portals provide clear status updates and wait times measured in hours, not days, so families aren’t left guessing or forced to forgo care.
• Accelerated, more predictable, payments for providers:
  By reducing payment lag from 30-60 days to near-real-time reimbursement, providers can focus on care rather than worrying about cash flow to meeting payroll.
• Reduced administrative burden:
  Modernized processes and compliance tools make it easier for small providers to participate in subsidy programs without hiring additional staff or spending long hours.
• Better subsidy utilization:
  Traditional subsidy waitlists prioritize families based on when they first applied, even if that application is years old and circumstances have changed or children have aged out. Intelligent matching prioritizes families based on real-time need and eligibility, helping funding reach families who can use it now and enabling providers to fill open seats.

These aren’t theoretical benefits. In California’s Upwards-operated FCCHEN program, families now receive eligibility decisions in days rather than months. Dual real-time attendance tracking, verified by both providers and parents, ensures compliance while guaranteeing providers are paid when care is delivered. This helps providers keep slots filled and create child care jobs, while families maintain continuity of employment or school enrollment.

A moment of opportunity

This period of increased oversight and disruption is challenging. But it also presents an opportunity and responsibility to rethink how child care systems are designed.

“Strong oversight matters,” said Jessica Chang, CEO of Upwards. “But it only works when families and providers can actually use the system built to support them. Modernized child care infrastructure can protect public dollars while removing everyday barriers that keep families and providers from thriving.”

Child care is not a side issue. It is one of the largest household expenses and a cornerstone of economic productivity, family stability, and community resilience. Building systems that are both accountable and usable is not just a technical upgrade. It is a high-ROI investment in the workforce, families, and the economy.