What Happens If You Fail a North Carolina Daycare Inspection

There Is No Single Pass or Fail

DCDEE inspections are not scored as a binary pass or fail. Instead, the consultant documents every compliance issue they find and calculates a Visit Compliance Score — a percentage that reflects how many standards your program met during that particular visit.

A score of 100% means the consultant found zero deficiencies. A lower score means one or more areas were out of compliance. The DCDEE tracks your scores over a rolling 18-month window, and your compliance history average must stay at or above 75% to maintain your license.

So a bad inspection does not automatically close your doors. What it does is lower your rolling average, trigger corrective action requirements, and potentially start a chain of consequences if the deficiencies are severe or repeated.

Levels of Enforcement Action

The DCDEE's response to inspection deficiencies follows an escalation ladder:

Written Notice of Violation: For minor or first-time deficiencies — a missing document in a child's file, an expired fire extinguisher, an incomplete drill log — the consultant issues a written notice specifying what needs to be corrected and by when. You get a defined timeline set by the notice to fix the problem and demonstrate compliance.

Administrative Action: Under 10A NCAC 09 .2201, the DCDEE can issue formal actions such as written warnings, provisional or probationary licenses, suspension, revocation, or denial for more serious or repeated violations. These actions go on your compliance record.

Provisional License: If your compliance history score falls below 75% or the consultant identifies safety hazards that cannot be immediately resolved, the DCDEE can convert your standard license to a provisional license. A provisional license is a conditional operating permit — you can continue to operate, but you are subject to additional monitoring, more frequent inspections, and a specific corrective action plan with hard deadlines.

A provisional license also affects your star rating. Programs on a provisional license cannot hold or apply for a rating above one star, which means you lose eligibility for subsidy payments (three-star minimum required).

License Suspension or Revocation: For the most severe violations — imminent danger to children, substantiated abuse or neglect, refusal to cooperate with the investigation — the DCDEE can suspend or revoke your license entirely. A summary suspension can result in immediate closure; revocation is a formal administrative process that includes the right to appeal.

What Gets Flagged Most Often

The deficiencies that home daycare operators encounter most frequently during DCDEE inspections tend to be documentation and maintenance issues, not safety emergencies:

• Missing or expired records — a child's health assessment not on file before admission or within 30 days after admission, an expired CPR certificate, background check letters nearing expiration without renewal in progress
• Incomplete drill logs — fire drills that were conducted but not documented with date, time, length of the drill, and operator signature
• Medication storage — medications not in a locked container, expired medications still on the shelf, or missing parent authorization forms
• Outdoor area maintenance — protective surfacing displaced or deteriorated under play equipment, fence damage, or standing water in the play area
• Documentation gaps — unsigned incident reports, missing daily attendance entries, or an outdated Written Plan of Care

How to Recover

If you receive a written notice of violation, the corrective action process is straightforward:

1. Fix the deficiency within the timeline the consultant specified
2. Document the correction — take dated photos, file the updated paperwork, replace the expired equipment
3. Notify your consultant in writing that the correction is complete
4. Prepare for a follow-up visit — the consultant may schedule a re-inspection to verify the correction, especially for safety-related items

The goal is to get your compliance score back on track before it drags your 18-month rolling average below 75%. A single bad visit can be offset by subsequent clean inspections, so the fastest recovery path is to address every cited deficiency immediately and make sure nothing new appears on the next visit.

For operators who want to prevent inspection issues rather than recover from them, the North Carolina daycare licensing guide includes a pre-inspection self-audit checklist that mirrors the DCDEE consultant's actual evaluation categories.

See more North Carolina guides →