Legislative Update: Statewide Audit of Child Care Scholarship System

February 10, 2026

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As many providers are aware, Michigan lawmakers have initiated a large-scale performance audit of the MiLEAP Child Development and Care (CDC) scholarship system. The audit is expected to begin in March.

This review follows a November 2025 report from the Auditor General that identified communication breakdowns between MiLEAP and child care providers — particularly around payment processing, eligibility notifications, and response timelines.

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What Is Being Examined?

Based on recent hearings, lawmakers appear to be focused on:

• Communication systems between MiLEAP and providers

• Payment delays and processing issues

• Kinship care eligibility and distribution of CDC funds

• Broader questions about oversight and fraud prevention
   

At this time, there is no confirmed finding of widespread provider wrongdoing. However, the political environment surrounding scholarship distribution has intensified, and scrutiny is increasing.

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CPAOM’s Position

• CPAOM supports transparency and accountability in any publicly funded system. At the same time, corrective action must be thoughtful and targeted.

• Providers did not design the scholarship system. Providers operate within the rules they are given.
   

Any reforms resulting from this audit must:

• Protect compliant providers

• Avoid broad payment disruptions

• Maintain care continuity for families

• Ensure that administrative failures do not become provider liabilities

 

Child care providers are essential economic infrastructure. Instability in scholarship systems directly affects Michigan’s workforce and local economies.

 

What CPAOM Is Doing

• CPAOM is actively engaged in Lansing and meeting with lawmakers to ensure that provider voices are included in this process.

• We are also conducting a provider-led audit initiative to document:

  • Real-world payment challenges

  • Administrative burdens

  • The personal and financial investment providers make daily to sustain care
     

Our goal is simple: decisions must reflect what is actually happening on the ground.