HHS Freezes Child Care Funding Amid Fraud Allegations
The Department of Health and Human Services (HHS) has decided to halt federal child care funding across all states in the U.S. This decision came after the Trump administration imposed a freeze on Minnesota’s program, triggered by ongoing allegations of extensive fraud.
On Wednesday, HHS spokesperson Andrew Nixon communicated to ABC News that states will only receive funding if they certify its lawful use. Future payments will necessitate proper justification, alongside receipts or photographic proof to confirm legitimate use of funds before any disbursement.
This announcement follows an investigation by independent journalist Nick Shirley, who reported discovering $110 million in fraudulent activities after visiting several child care centers in Minneapolis. During these visits, she found that many facilities were in a state of disrepair despite having received significant amounts from state and federal programs.
Nixon also mentioned that those receiving funds without any suspicion of wrongdoing are now required to submit “administrative data” for HHS evaluation.
“It’s the states’ duty to ensure that these funds, which are taxpayer dollars, are utilized for rightful purposes,” he emphasized. He went on to explain that if there are suspicions of wrongdoing, recipients must provide more extensive documentation to the federal government, including records of attendance, permits, inspection reports, and details of any complaints or investigations.
This announcement came shortly after HHS Deputy Secretary Jim O’Neill revealed on Tuesday that the agency would suspend child care payments to Minnesota. O’Neill detailed three measures the department plans to implement to tackle “blatant fraud” believed to be widespread both in Minnesota and across the nation.
O’Neill explained that ACF payments nationwide will now require valid reasons along with receipts or photographic evidence prior to any funds being sent to states.
He also called for a thorough audit of Minnesota’s daycare centers, seeking attendance records, licensing documents, as well as any complaints, investigations, and inspection results.
“We have established a dedicated fraud reporting hotline and email,” he stated, directing individuals—parents, healthcare providers, or anyone else—to share any relevant information. “We are shutting off the flow of funds related to fraud,” he added.
Department of Homeland Security (DHS) Secretary Kristi Noem and FBI Director Kash Patel mentioned that HHS is implementing additional safeguards, emphasizing that the ongoing investigation into the fraud is being conducted jointly by DHS and the FBI.
“Homeland Security Investigations is actively examining child care and related fraud incidents in Minneapolis,” Noem posted on X.
Patel discussed the FBI’s commitment to pursuing indictments and convictions linked to the $250 million fraud scheme known as “Feeding Our Future.” He remarked that the bureau has quickly deployed personnel and resources to Minnesota to dismantle this significant fraud operation affecting federal programs.
“The FBI sees this as just the start of uncovering extensive fraud. We will keep tracking the funding and ensure children’s safety; this investigation is still underway,” Patel remarked, adding that some individuals may be referred to immigration authorities for potential denaturalization or deportation proceedings if applicable.
