1. (a) This subchapter establishes:

   1. (1) procedures for the Agency to issue fraud determinations and take appropriate corrective actions involving Commission-funded child care, including child care quality improvement activities, child care statewide initiatives, and child care special projects pursuant to the Agency's authority under Texas Labor Code, §§301.191, 301.192, and 301.201; and
   2. (2) requirement for a Board to develop procedures for the prevention of fraud by a parent, provider, or any other person in a position to commit fraud consistent with fraud prevention provisions in the Agency-Board Agreement.

2. (b) In this subchapter, a person commits fraud if, to obtain or increase a benefit or other payment, either for the person or another person, the person:

   1. (1) makes a false statement or representation that the person knew or should have known was false; or
   2. (2) fails to disclose a fact when the person knew or should have known the fact was material.
3. (c) A Board shall ensure that procedures for researching and fact-finding for possible fraud are developed and implemented to deter and detect suspected fraud for child care services in the workforce area.
4. (d) These procedures shall include provisions that suspected fraud is reported to the Agency in accordance with Agency policies and procedures.
5. (e) The Board shall report cases of suspected fraud identified by the Board to the Agency and shall conduct fact-finding in accordance with Agency policies and procedures.
6. (f) The Board shall review and complete fact-finding for all cases of suspected fraud that the Agency refers to the Board.
7. (g) The Board shall document all cases of suspected fraud, including cases referred to the Board, in the Agency's case management system. The Board shall include in this documentation information on fact finding, determinations, appeals, decisions, and improper payment recovery in accordance with Agency policies and procedures.
8. (h) The Agency retains jurisdiction over fraud cases and can intervene in a case if a Board fails to follow Agency policies and procedures or if a Board requires assistance.
9. (i) A Board must notify the Fraud Deterrence and Compliance Monitoring Division and receive approval before issuing a determination that removes, limits, or prohibits a provider from providing Commission-funded child care services due to a finding of fraud. A determination issued without the required approval cannot become final.

Source Note:The provisions of this §809.111 adopted to be effective January 29, 2007, 32 TexReg 336; amended to be effective October 1, 2016, 41 TexReg 7529; amended to be effective June 8, 2026, 51 TexReg 3809.