St Paul, Dec 31 (.) The US Department of Health and Human Services has frozen federal child care funding to Minnesota, citing concerns regarding widespread fraud, a move that has prompted a sharp response from state officials and intensified political tensions over public assistance programmes.
Deputy HHS Secretary Jim O’Neill announced the decision in a post on X, alleging that “blatant fraud … appears to be rampant in Minnesota and across the country”. “We have turned off the money spigot and we are finding the fraud,” he wrote.
O’Neill linked the action to a video by conservative YouTuber Nick Shirley, which claimed that nearly a dozen Minnesota day care centres receiving public funds were not actually providing services.
He said federal officials had identified the centres named in the video and demanded that the state conduct a “comprehensive audit”, including reviews of attendance records, licences, complaints, investigations and inspections.
State officials have pushed back against the move, noting that a good chunk of the allegations were as yet unsubstantiated.
According to state records cited by CBS News, all but two of the day care centres mentioned hold active licences, and regulators had visited all active locations within the past six months. While inspectors issued citations related to safety, cleanliness and compliance issues, there were no findings of fraud.
Minnesota Governor Tim Walz accused the federal government of politicising the issue. “This is Trump’s long game,” he wrote on social media, and criticising the White House.
“We’ve spent years cracking down on fraudsters. It’s a serious issue — but this has been his plan all along. He’s politicising the issue to defund programmes that help Minnesotans.”
O’Neill said with immediate effect, all payments from HHS’s Administration for Children and Families would require additional documentation nationwide, including justification and receipts or photographic evidence, before funds are released.
The Administration for Children and Families sends about $185 million in child care funding to Minnesota each year, according to the body’s chief, Alex Adams.
Minnesota’s Child Care Assistance Programme, which subsidises day care for around 23,000 children from low-income families, relies heavily on federal support. In the current fiscal year ending September 2026, the federal contribution was projected at $218 million, alongside $155 million from the state.
The funding freeze followed a series of enforcement actions. On Monday, agents from the Department of Homeland Security visited dozens of sites in Minneapolis as part of what DHS Secretary Kristi Noem described as a “massive investigation on child care and other rampant fraud”.
In recent years, Minnesota has been grappling with repeated scrutiny over fraud scheme allegations involving public assistance programmes.
Dozens of people have been convicted in a case involving the theft of nearly $250 million from a federally funded child nutrition programme during the pandemic. Prosecutors have also brought cases related to Medicaid-supported autism services and housing stabilisation initiatives.
Federal prosecutors have estimated that fraudulent payments linked to Minnesota’s Medicaid system could total $9 billion or more, a figure Walz has disputed.
The issue has drawn national attention, with Trump highlighting that a substantial number of defendants in recent cases are of Somali descent.
Walz has defended the state’s oversight efforts while pledging continued action against fraud, warning that broad funding cuts risk harming vulnerable families rather than addressing criminal behaviour. . . .