Feds freeze Minnesota child‑care funds amid fraud probe
The Trump administration’s Department of Health and Human Services has frozen all federal child care payments to Minnesota, halting roughly $185 million per year in funding for state child care assistance while federal investigators and a U.S. House oversight committee intensify probes into alleged large‑scale fraud in Minnesota‑administered programs. The House Committee on Oversight and Government Reform has scheduled a Jan. 7 hearing titled “Oversight of Fraud and Misuse of Federal Funds in Minnesota: Part I” and invited Gov. Tim Walz and Attorney General Keith Ellison to testify at a Feb. 10 session, as scrutiny focuses on child care centers and broader use of federal dollars in programs that serve about 20,000 children monthly and more than 3,000 providers statewide. Walz’s office criticized the committee’s record of “circus hearings,” while federal officials point to years of FOX 9 reporting and recent viral allegations as catalysts for the current crackdown and surge of federal agents in Minnesota.
📌 Key Facts
- HHS Assistant Secretary Alex Adams says his office provides Minnesota with about $185 million in federal child care funds annually and has now frozen all such payments during a fraud investigation.
- Minnesota’s Child Care Assistance Program served roughly 20,000 children in an average month in 2024 at a total cost of $306.6 million, with more than 3,000 providers enrolled statewide.
- The U.S. House Oversight Committee will hold a Jan. 7 hearing on “Oversight of Fraud and Misuse of Federal Funds in Minnesota: Part I,” and has invited Gov. Tim Walz and AG Keith Ellison to testify at a Feb. 10 follow‑up hearing.
- A viral video published in December alleging widespread child‑care fraud, combined with earlier FOX 9 investigations dating back to 2015, has helped trigger intensified federal scrutiny and an influx of federal officers in Minnesota.
- Walz’s spokesperson said the governor is “always happy to work with Congress” but accused the committee of having a history of “circus hearings that have nothing to do with the issue at hand.”
📊 Relevant Data
Somalis represent about 2% of Minnesota's total population in 2024.
By the numbers: Minnesota's Somali population, according to Census data — KTTC
Most defendants in Minnesota's recent fraud cases, including those involving child care programs, are of Somali descent.
Surge in federal officers in Minnesota focuses on alleged fraud at day care centers — ABC News
The poverty rate among Somali Minnesotans is 27.9% in 2024.
Latest Data on Somali Minnesotans 2024 — Empowering Strategies
31.2% of Somali Minnesotans receive food stamps (SNAP) in 2024.
Latest Data on Somali Minnesotans 2024 — Empowering Strategies
More than half (52%) of children in Somali immigrant homes in Minnesota live in poverty, compared to 8% of children in native-born households.
Somali Immigrants in Minnesota — Center for Immigration Studies
Fears of being labeled racist helped provide cover for fraudsters in Minnesota's programs, contributing to lax oversight.
How fears of being labeled 'racist' helped 'provide cover' for the exploding Minnesota fraud scandal — Fox News
The Minnesota Department of Education failed to act on warning signs of fraud prior to the COVID-19 pandemic, which included policy waivers that may have facilitated fraudulent activities in related programs.
Minnesota Department of Education: Oversight of Feeding Our Future — Office of the Legislative Auditor