WASHINGTON — The US Department of Health and Human Services is freezing all future child care funding to states beyond Minnesota, with President Trump predicting his administration will find massive fraud in California.
The review of government funding started in Minnesota but will be expanded nationwide until feds can determine that no taxpayer dollars are being spent fraudulently.
“HHS has a clear duty to verify the proper use of taxpayer funds,” spokesman Andrew Nixon said in a statement. “The documentation process exists to rule out fraud and confirm that funds are supporting legitimate child care providers.
“These requirements help ensure the integrity of the program and protect both families and providers,” he added, noting that until individual state-level allocations can be vetted, no further funding will be disbursed.
Child care centers nationwide are funded by programs in state governments that receive matching allocations from HHS. The department has already allocated billions of dollars for funding in all 50 states this year.
HHS Deputy Secretary Jim O’Neill said Tuesday afternoon that the process began with the pausing of “all child care payments to the state of Minnesota” — the day after a viral video showed alleged fraud at day care centers in the Twin Cities.
The Gopher State has raked in $185 million from HHS coffers so far this calendar year, according to Alex Adams, the assistant secretary of HHS’ Administration for Children and Families.
In total, Minnesota shelled out $18 billion in state welfare services since 2018 — roughly half of which is believed to have fallen into the hands of fraudsters, according to the US Attorney’s office in the state.
Many were Somali-owned, with nearly 80,000 from the country residing in Minnesota.
On Tuesday, O’Neill accused state officials of having “funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade.”
YouTuber Nick Shirley got millions of views after posting a more than 40-minute video to X showing his visits to day care centers in Minneapolis that had allegedly received millions of taxpayer dollars — but didn’t appear to be serving children or were closed.
Now, the nonprofits previously reaping the benefits of the state’s lax enforcement will have to provide receipts to the feds as well as the findings of an audit of organizations’ “attendance records, licenses, complaints, investigations, and inspections,” O’Neill added.
HHS has also put out a hotline and an email address to help assist in the reporting of fraud at childcare.gov.
“We have turned off the money spigot and we are finding the fraud,” the HHS deputy secretary affirmed.
On Wednesday, Trump posted on his Truth Social: “There is more FRAUD in California than there is in Minnesota, if that is even possible.”
