The issue of child care fraud in Minnesota has resurfaced, following the release of a viral video that alleges significant wrongdoing within the state’s child care network. Minnesota’s Child Care Assistance Program (CCAP) has been under scrutiny for its oversight shortcomings for over a decade.
Overview of Allegations
In late December 2023, a YouTuber named Nick Shirley published a video accusing several day care centers in Minneapolis of improperly billing the government for services not rendered. The video features Shirley and an unidentified associate, examining various centers that they claim had no children present.
While Shirley’s video has garnered attention, local news outlets, like WCCO, have reported that his claims remain largely unsubstantiated. Despite this, investigations are now underway by both federal and state authorities.
Audit Findings and Recommendations
Recent audits have highlighted significant gaps in Minnesota’s monitoring systems. A report from the federal Office of the Inspector General released in May 2025 examined 200 randomly selected CCAP payments from 2023. The audit revealed that the state exhibited non-compliance in about 19% of the sampled records.
- 38 instances of non-compliance identified.
- 11% error rate in 2023 payments across 1,155 child care centers.
The report emphasized that inadequate oversight led to overpayments and increased the risk of fraud, recommending more stringent monitoring of attendance records.
State Response
The Minnesota Department of Health and Human Services acknowledged the need for improvement. They are expanding the Early and Often Program to enhance compliance among new child care centers. This program aims to better monitor attendance and ensure adherence to state requirements.
Commissioner Tikki Brown of the Department of Children, Youth and Families admitted in January 2025 that their fraud detection measures need further enhancement. She stressed the importance of wider investigative authority to address potential fraud effectively.
Historical Context
Fraud allegations in Minnesota’s child care system are not new. A 2019 report from the Office of the Legislative Auditor revealed that between 2013 and 2018, the state uncovered $5 to $6 million in fraud, though the total amount may be even higher, as many cases lacked sufficient evidence. Additionally, as part of their recommendations, both reports suggested the implementation of electronic attendance tracking systems to ensure accuracy in reporting.
Investigative Actions and Recoveries
Since 2020, Minnesota’s fraud investigation unit has reported recovering approximately $2.4 million, with four dedicated investigators overseeing an average of five new criminal cases per year. Payments to 79 CCAP providers have also been halted during this period.
Current Situation
Despite the ongoing investigations, the day care centers visited by Shirley have mostly maintained their licensing status, with state inspectors recently issuing citations for non-fraud related violations. As investigations continue, the results have yet to be made public.
As Minnesota navigates the complexities of child care assistance and fraud prevention, these developments underscore the urgent need for enhanced oversight mechanisms to protect both public funds and the welfare of children.
