The Department of Health and Human Services on Tuesday announced that it has frozen all federal childcare funding for the state of Minnesota, citing rampant fraud allegations largely attributed to the Somali community. 

In a post on X, Deputy HHS Secretary Jim O'Neill wrote that "You have probably read the serious allegations that the state of Minnesota has funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade," which resulted in the following:

1. I have activated our defend the spend system for all ACF payments. Starting today, all ACF payments across America will require a justification and a receipt or photo evidence before we send money to a state.

2. Alex Adams and I have identified the individuals in @nickshirleyy 's excellent work. I have demanded from @GovTimWalz
 a comprehensive audit of these centers. This includes attendance records, licenses, complaints, investigations, and inspections.

3. We have launched a dedicated fraud-reporting hotline and email address at https://childcare.gov Whether you are a parent, provider, or member of the general public, we want to hear from you.

Starting immediately, all HHS payments to Minnesota "will require a justification and a receipt or photo evidence before we send money to a state."

"Funds will be released only when states prove they are being spent legitimately," O'Neill said in a follow-up comment.

Following viral footage from journalist Nick Shirley which showed nearly a dozen Minnesota day care centers that had no children in attendance during the middle of the day, despite receiving state funds to provide services. O'Neill said that HHS has identified the centers featured in Shirley's video and demanded that the state carry out a "comprehensive audit," including "attendance records, licenses, complaints, investigations and inspections."

And just so you know how the MSM is playing it, CBS News writes: 

CBS News conducted its own analysis of day care centers mentioned by Shirley. All but two have active licenses, according to state records, and all active locations were visited by state regulators within the last six months. The analysis found dozens of citations for safety, cleanliness and other issues, but no recorded evidence of fraud.

...

In recent years, Minnesota has grappled with a litany of alleged fraud schemes targeting the state's public assistance programs. Dozens of people have been convicted as part of a scheme to bilk nearly $250 million from a federally backed child nutrition program during the pandemic, and federal prosecutors have charged people with defrauding Medicaid-supported autism services and housing stabilization programs.

So...

> alleged (Somalian) fraud schemes

> dozens (of Somalians) convicted

> regulators say no fraud in (Somalian) daycare centers

Sure CBS, state regulators in a state with rampant fraud far beyond Shirley's findings - are doing just great.

According to a spokesman for governor Tim Walz, "The governor has been combatting fraud for years while the President has been letting fraudsters out of jail.  Fraud is a serious issue. But this is a transparent attempt to politicize the issue to hurt Minnesotans and defund government programs that help people."

Indeed, Walz thinks he's got it all figured out!

Minnesota receives hundreds of millions in federal dollers annually to support its Child Care Assistance Program, which subsidizes daycare for around 23,000 children from low-income families. In 2026, HHS was expected to kick in $218 million, while the state will kick in $155 million, according to state projections.