The U.S. Department of Health and Human Services has frozen all federal child care payments to Minnesota following allegations of fraud involving day care providers in the state, a senior HHS official said Tuesday.
Deputy HHS Secretary Jim O’Neill said in a social media post that the agency has halted payments from the Administration for Children and Families to Minnesota and is also tightening documentation requirements for child care payments nationwide. Under the new measures, states will be required to provide justification and supporting evidence, such as receipts or photographs, for reimbursement requests.
The action follows the circulation of a viral online video posted by conservative influencer Nick Shirley, which alleges fraudulent practices at child care centers in Somali communities in Minneapolis. The claims made in the video have not been independently verified, and Minnesota officials have disputed the allegations.
In his post, O’Neill said the agency is responding to what he described as widespread fraud in child care programs and called on Democratic Governor Tim Walz to conduct a comprehensive audit of the facilities identified in the video.
Walz pushed back against the move, accusing the Trump administration of politicizing the issue. In a social media response, he said Minnesota has spent years working to address fraud and argued that the payment freeze was part of a broader effort to cut funding for social programs.
State officials earlier this week also challenged the claims made in Shirley’s video, which runs more than 40 minutes and shows visits to day care facilities that Shirley said appeared empty despite receiving public funds. Minnesota authorities questioned whether the footage was taken during operating hours.
Tikki Brown, commissioner of the Minnesota Department of Children, Youth and Families, said the state takes fraud allegations seriously but raised concerns about the methods used in the video. She said each of the facilities mentioned had been inspected within the past six months as part of routine licensing reviews and that children were present during unannounced state visits.
Brown added that state inspectors were conducting additional visits to the sites referenced in the video to assess the concerns raised.
The Minnesota Department of Children, Youth and Families did not immediately respond to requests for comment.
The issue has drawn attention from other federal agencies. Homeland Security Secretary Kristi Noem said her department is investigating potential fraud involving child care and other programs, while FBI Director Kash Patel said the bureau has increased resources in Minnesota following past discoveries of large-scale fraud.
Patel cited the dismantling of a $250 million scheme involving federal food assistance during the COVID-19 pandemic, uncovered in earlier investigations. Charges related to that case have continued to be filed this year.
President Donald Trump has also publicly criticized alleged fraud in Minnesota during recent cabinet meetings, including comments about the state’s Somali community.
A senior federal prosecutor in Minnesota said earlier this month that investigations have uncovered extensive financial misconduct tied to public assistance programs in the state.
