HHS freezing child care payments to all states after Minnesota fraud allegations: Official – ABC News
The Trump administration halted child care funding to all states following fraud allegations centered on daycare centers in Minnesota, with HHS officials stating funds will resume only when states demonstrate legitimate spending. Deputy HHS Secretary Jim O’Neill characterized the alleged fraud as “blatant” and “rampant” across the country, demanding Minnesota Governor Tim Walz conduct a comprehensive audit of identified facilities. The freeze expanded requirements for all child care funding recipients nationwide, mandating administrative data submission and additional documentation including attendance records, licensing reports, and inspection findings.
The federal action was triggered by an unverified online video posted by conservative influencer Nick Shirley alleging fraud in Somali community child care centers in Minneapolis. ABC News has not independently verified Shirley’s claims, which included footage of allegedly empty facilities during business hours. Minnesota state officials disputed the video’s methodology and findings, with Department of Children, Youth and Families Commissioner Tikki Brown questioning whether the footage was captured during operational times.
Minnesota officials documented that state unannounced visits to all facilities named in the video found children present and confirmed each site had been inspected within six months as part of routine licensing procedures. Governor Walz characterized the federal freeze as part of Trump’s strategy to defund assistance programs, stating Minnesota has actively pursued fraud investigations independent of the administration’s pressure. The state emphasized it takes fraud concerns seriously while questioning the video’s investigative standards.
FBI Director Kash Patel and Homeland Security Secretary Kristi Noem announced expanded investigations into alleged child care fraud and other federal program abuses, with Patel citing a $250 million fraud scheme involving federal food aid uncovered during the COVID-19 pandemic. U.S. Attorney’s Office prosecutor Joe Thompson described the scale of alleged Minnesota fraud as “staggering,” though unrelated fraud investigations in the state predated the viral video and Trump administration’s current response.
The funding freeze applies to all states despite allegations being localized to Minnesota, with HHS tightening documentation requirements for the Administration for Children and Families across the nation. The Trump administration has linked the child care fraud allegations to broader claims of systematic fraud nationwide, though the specific evidence supporting nationwide fraud in child care funding remains unsubstantiated beyond the Minnesota video.