Federal child care payments to Minnesota were frozen Tuesday after the deputy secretary of the Department of Health and Human Services announced a crackdown on what he described as widespread fraud in daycare funding.
“We have frozen all child care payments to the state of Minnesota,” said Deputy HHS Secretary Jim O’Neill, citing “serious allegations” that the state routed millions of taxpayer dollars to fraudulent daycare operations over the past decade.
In the post, O’Neill said the agency has triggered new controls for Administration for Children and Families payments nationwide. Beginning Tuesday, he said, ACF payments will require documentation before money is sent to states, including justification and “a receipt or photo evidence.”
O’Neill also said he and ACF chief Alex Adams identified individuals tied to “excellent work” by online investigator Nick Shirley, and he said he demanded Minnesota Gov. Tim Walz order a comprehensive audit of the centers. O’Neill said the audit request covers attendance records, licensing documents, complaints, investigations and inspection reports.
In addition, he said a dedicated fraud-reporting hotline and email address have been launched through childcare.gov for parents, providers and members of the public.
O’Neill did not provide a timeline for how long the Minnesota funding freeze will remain in place or specify the amount of funding affected.
