Recent changes to the Supplemental Nutrition Assistance Program (SNAP), coupled with the federal government shutdown, have caused major operational disruptions for states and counties. This occurred just as new financial accountability measures tied to payment error rates were taking effect.

In response, APHSA has joined the National Governors Association, National Association of Counties, National Conference of State Legislatures, and several others in urging Congress to include provisions in the anticipated upcoming Continuing Resolution that would help states and counties stabilize operations, maintain program integrity, and continue effective partnerships.

Governors in five states were notified that the Administration for Children and Families (ACF) is freezing at least $7.35 billion in the Temporary Assistance for Needy Families (TANF) program, $2.4 billion in the Child Care and Development Fund (CCDF), and $869 million in Social Services Block Grant Program (SSBG) funds over allegations of fraud. California, Colorado, Illinois, Minnesota, and New York have filed a lawsuit and a hearing on a temporary restraining order is being held today. This story is ongoing, and we will provide updates as new information becomes available.

If you have questions or suggestions on how we can best support you, please reach out to Lexie Kuznick, APHSA Director of Policy and Government Relations.

ACF Activates Defend the Spend System for CCDF

ACF has recently activated the Defend the Spend system for CCDF. Defend the Spend is an initiative launched under Executive Order 14222 and will require all states to provide additional justification for their funding. This shift was made at the same time a fraud-reporting process was also announced.

Comment Open to Proposed Changes to CCDF Rules

ACF has proposed rescinding several CCDF policy requirements that include 7% co-payment caps for families, prospective child care provider payments, designated direct-service grant and contracts, and enrollment-based provider payment requirements. The comment period for this proposed rule is open through February 4, 2026.

DOJ Launches New National Fraud Enforcement Division

The administration has signed an executive order announcing plans to create a new Department of Justice (DOJ) division focused on national fraud enforcement. The division will be led by a new assistant attorney general and aims to strengthen DOJ’s ability to investigate and prosecute fraud impacting federal programs, federally funded benefits, and private citizens. This effort will include coordinating with multiple agencies and districts to identify potential fraud.

USDA Issues Updated Terms and Conditions for Federal Awards

The U.S. Department of Agriculture (USDA) released its General Terms and Conditions for Federal Awards, effective December 31, 2025. It establishes the standard legal, administrative, and financial rules that all recipients and subrecipients of USDA grants and cooperative agreements must follow. These terms outline key requirements—from internal controls, conflict of interest policies, and financial management to compliance with environmental, immigration, and public access laws—meant to deliver consistent oversight across federal assistance programs. 

ACF Releases New Pilot Option for CFSR

ACF has released Child and Family Services Reviews (CFSR) Technical Bulletin (TB) #14, introducing a new pilot approach for any states at any stage of CFSR round 4. The bulletin supports ACF’s broader A Home for Every Child initiative—launched under Executive Order 14359—to refocus program improvement efforts on outcomes such as prevention, foster home capacity, and timely permanency. TB #14 gives states the option to join a pilot that emphasizes key results and streamlines Program Improvement Plan (PIP) requirements. These updates aim to help states target resources toward meaningful performance improvements rather than lengthy compliance processes.

Additional Guidance on SNAP Food Restriction Waiver Implementation

FNS has issued guidance on how the recent SNAP food restriction waivers will be implemented and enforced by retailers. The waivers—which have been approved for 18 states—allow limiting use of SNAP benefits for non-nutritious items like candy and sugary drinks. This requires retailers in those states to update systems, train staff, and comply with each state’s rules. The provided guidance aims to ensure consistent compliance across in-store and online SNAP transactions.

USDA and HHS Announce Updates to U.S. Nutrition Policy

USDA together with the Department of Health and Human Services (HHS) released the 2025–2030 Dietary Guidelines for Americans. The guidelines, which are meant to provide advice on what to eat and drink to meet nutrient needs, promote health, and prevent disease, are updated every five years. These new guidelines focus on whole, nutrient-dense foods with an emphasis on meat protein and dairy as well as fruits, vegetables, healthy fats, and whole grains. It also sharply reduces reliance on highly processed foods, added sugars, and artificial additives.

USDA ERS Releases 2024 Data on Food Security Trends

USDA’s Economic Research Service (ERS) recently published a report titled, "Household Food Security in the United States in 2024," using data collected in the December 2024 Current Population Survey Food Security Supplement (CPS-FSS). The report estimates that 86.3% of U.S. households were food secure throughout all of 2024, meaning they had consistent access to enough food for active, healthy lives. About 13.7% of households experienced food insecurity at some point during the year, facing uncertain or limited access to adequate food. A smaller subset—5.4% of households—suffered very low food security, where one or more members had reduced food intake and disrupted eating patterns due to limited resources.

Comments Open for SNAP Rules for Lottery/Gambling Winnings Reporting

USDA is seeking comments on a proposal which clarifies that households with substantial lottery or gambling winnings must report those winnings and will be ineligible for SNAP benefits until they meet the program’s income and resource limits. States would be required to work with gaming entities to identify individuals with significant winnings and share that information with SNAP agencies. The comment period for this proposal is open through January 21, 2026.

USDA Releases FY 2026 Discretionary Exemption Allocations for SNAP ABAWDs

USDA’s Food and Nutrition Service (FNS) released its Fiscal Year (FY) 2026 allocations of discretionary exemptions for able-bodied adults without dependents (ABAWDs). Under federal rules ABAWDs can generally receive SNAP benefits for only three months in a 36-month period unless they meet work requirements or qualify for exemptions. The Fiscal Responsibility Act of 2023 limits how many unused exemptions may be carried over, so for FY 2026 state agencies may only carry over unused exemptions earned for FY 2025.

Comments Open for Standardized Grant Application Package for FNS Programs

FNS is seeking public comment on a proposal to create a uniform grant application package for its non-entitlement discretionary grant programs. This package would include common requirements like program narratives, budget details, and standard federal forms with the aim of streamlining the application process and improving consistency across grant opportunities. The comment period for this proposal is open through January 29, 2026.

FNS Shares Findings of SNAP Risk Assessment Study

FNS released a study examining how state agencies use risk assessment tools to identify SNAP cases that are more likely to have payment errors and to help target review resources more effectively. The research found that fewer than half of responding states currently use these tools, with others either discontinuing them or not implementing them at all, and that motivations and methods vary across agencies. The study also looked at the effectiveness of the tools in reducing payment errors and identified opportunities and best practices to enhance their design and use. The full findings offer insights for FNS and state partners on strengthening risk assessment practices.

ACF Announces the Release of Over $250 million

ACF's Office of Community Services (OCS) announced the release of over $250 million of federal fiscal year 2026 (FFY26) regular block grant funding to eligible Community Service Block Grant (CSBG) grant recipients—including to state, tribal, and territorial grant recipients—under a continuing resolution. This funding, which was made available December 12, 2025, reflects allocations available through January 30, 2026, while Congress continues appropriations for federal programs. Any extension of this funding period beyond January 30, 2026, will depend on further congressional action.

CMS Announces Award of $50 Billion Under Rural Health Transformation Program

The Centers for Medicare & Medicaid Services (CMS) announced the award of $50 billion through the Rural Health Transformation Program. The program is intended to expand access to care in rural areas, strengthen the rural health workforce, modernize facilities and technology, and support care models that bring quality health care closer to rural homes. First-year awards will average $200 million per state as the program provides funding to all 50 states.