Health officials freeze Minnesota child care payments

Federal Health and Human Services leaders on Tuesday paused all child care payments to Minnesota amid serious allegations of fraud. HHS Deputy Secretary Jim O’Neill and Assistant Secretary Alex Adams acknowledged serious and credible fraud allegations within Somali-run Minnesota childcare centers. The pair announced several preliminary safeguards being enacted to protect against blatant fraud in Minnesota and across the country.

Federal authorities believe that Minnesota allowed scammers and phony daycare centers to siphon off millions in taxpayer funding over the last decade, O’Neill said in a video message the two released Tuesday. The Minnesota Child Care Services office gets $185 million in annual federal child care funding, and the office’s director could not confidently say whether the alleged cases of fraud were isolated incidents, Adams said.

What kind of safeguards are being enacted?

• All states receiving funding from the federal Office of Administration for Children and Families under Adams must submit receipts, photo evidence, or other forms of justification before receiving payments.

• O’Neill also demanded that Gov. Tim Walz conduct a full audit of suspected centers. These thorough reviews must include student attendance records, complaints, facility licenses, and inspections, O’Neill said.

• Officials launched a public hotline dedicated to fraud tips. Parents, providers, and other public citizens are encouraged to submit any fraud tips to address@childcare.gov, Adams said.

What else are people saying?

• Vice President J.D. Vance praised the initial safeguards in a Tuesday statement. Requiring verification before releasing taxpayer money is one of the most important steps to end fraud, he said.

• The Department of Justice is executing search warrants and subpoenas right now, White House press secretary Karoline Leavitt said during a Wednesday interview. People will be arrested for fraud that lasted years under Walz’s leadership, she added.

• President Donald Trump released a Wednesday morning statement describing Walz as a crooked politician. Trump also accused California of more rampant fraud than Minnesota, characterizing both state leaders as fraudulent in a separate statement.

Dig deeper: Read my last report for more on the new fraud allegations among Somalis in Minnesota.