The Department of Health and Human Services (HHS) has halted federal child care payments to Minnesota, following serious fraud allegations. Deputy Secretary Jim O’Neill made the announcement on social media, stating that “blatant fraud” has been prevalent in Minnesota and across the nation.
Details of the Fraud Allegations
O’Neill’s statements were spurred by a video from conservative YouTuber Nick Shirley. In the video, Shirley claims several Minnesota day care centers receiving state funds are not providing services. In response, HHS has identified these centers and demanded a thorough audit from the state.
A Comprehensive Audit Required
- Attendance records
- Licenses
- Complaints
- Investigations
- Inspections
CBS News conducted its investigation into the centers highlighted by Shirley. They found that almost all but two of the centers held active licenses, and state regulators had inspected all active locations in the past six months. Although there were several citations for safety and cleanliness, there was no evidence of fraud.
Political Reactions
The actions from HHS have sparked political responses. A spokesperson for Minnesota Governor Tim Walz claimed the governor has been addressing fraud for years. They accused the federal administration of politicizing the issue, suggesting it aims to undermine government programs that aid residents.
Funding Measures Implemented
Effective immediately, HHS will require justification and photographic evidence before disbursing any payments from its Administration for Children and Families. Annually, Minnesota receives approximately $185 million in child care funds.
Impact on Child Care Assistance Program
The Child Care Assistance Program in Minnesota, which aids around 23,000 low-income children, is significantly funded by federal dollars. For the fiscal year ending September 2026, federal contributions were expected to reach $218 million, supplemented by $155 million from the state.
Federal Investigations Underway
O’Neill’s announcement coincided with a visit from Homeland Security agents to numerous sites in Minneapolis. DHS Secretary Kristi Noem described this as part of a significant investigation into child care fraud.
History of Fraud Issues in Minnesota
In recent years, Minnesota has faced several fraud schemes affecting public assistance programs. Federal prosecutors reportedly estimated up to $9 billion in fraudulent payments from the Medicaid service in the state. Instances of fraudulent claims have garnered national attention, particularly from high-profile figures such as former President Trump.
Governor Walz continues to assert the state’s commitment to addressing fraud while navigating the complex landscape surrounding these serious allegations.
