Trump freezes child care funding nationwide, predicts California will surpass Minnesota for fraud
WASHINGTON — The U.S. Department of Health and Human Services (HHS) is halting all future child care funding to states beyond Minnesota as it launches a nationwide review of potential fraud in state-administered programs. President Trump said his administration expects to uncover even larger amounts of fraud in states such as California.
The funding review began in Minnesota and will expand across the country while federal officials assess whether taxpayer dollars are being used appropriately. Until individual state allocations are verified, no additional funds will be released.
“HHS has a clear duty to verify the proper use of taxpayer funds,” agency 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.” He added that the requirements are meant to protect both families and providers and ensure the integrity of the program.
Child care centers nationwide receive funding through state programs that are matched by HHS. The department has already distributed billions of dollars to all 50 states this year.
HHS Deputy Secretary Jim O’Neill said Tuesday that the review process began with a pause on “all child care payments to the state of Minnesota.” The move followed the release of a viral video alleging widespread fraud at day care centers in the Twin Cities area. According to Alex Adams, assistant secretary of HHS’ Administration for Children and Families, Minnesota has received approximately $185 million in child care funding from HHS so far this year.
Federal prosecutors estimate that Minnesota has spent roughly $18 billion on state welfare services since 2018, with investigators believing that a significant portion may have been improperly obtained. The U.S. Attorney’s Office has pursued multiple fraud cases related to child care and nutrition programs in the state.
O’Neill accused state officials of allowing “millions of taxpayer dollars” to be directed to fraudulent day care operations over the past decade. YouTuber Nick Shirley drew widespread attention after posting a video documenting visits to Minneapolis-area child care centers that had reportedly received large sums of public funding but appeared to be closed or not serving children.
Under the new federal review, nonprofit organizations that previously received funding will be required to submit receipts and undergo audits examining attendance records, licenses, complaints, investigations, and inspection reports, O’Neill said.
HHS has also launched a fraud-reporting hotline and email address through ChildCare.gov.
“We have turned off the money spigot, and we are finding the fraud,” O’Neill said.
On Wednesday, President Trump commented on the issue on Truth Social, writing: “There is more FRAUD in California than there is in Minnesota, if that is even possible.”
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