Feds freeze Minnesota child-care funds; state launches added on‑site checks at 55 providers
Federal officials have frozen Minnesota’s child-care funds amid allegations from senior HHS leaders — echoed by increased congressional scrutiny — that scammers and fake daycares siphoned millions over the past decade. In response, Minnesota’s Department of Children, Youth and Families says its Office of Inspector General, working with BCA agents, will begin immediate on‑site compliance visits at 55 providers now under investigation (including four featured in a viral video), and that DCYF and providers learned of the HHS freeze at the same time as the public while the state has until Jan. 9 to provide additional information.
📌 Key Facts
- HHS has frozen federal child‑care funding to Minnesota, with senior HHS officials (ACF Assistant Secretary Alex Adams and Deputy Secretary Jim O’Neill) alleging scammers and fake daycares siphoned millions over the past decade.
- Minnesota’s Department of Children, Youth and Families (DCYF) and providers learned of the HHS funding freeze at the same time as the public; the state has until Jan. 9 to provide additional information to HHS or risk further penalties or restrictions.
- State officials say 55 child‑care providers receiving program funding are currently under investigation, including four of the sites shown in a viral December video.
- DCYF’s Office of Inspector General will immediately begin additional on‑site compliance visits at child‑care centers in collaboration with Minnesota BCA agents; the state has launched added on‑site checks focused on the 55 providers under investigation.
- Despite the federal funding freeze, DCYF is instructing CCAP providers and families to continue program requirements and normal practices while the investigation proceeds.
📊 Relevant Data
Somali refugees began resettling in Minnesota in the early 1990s following the Somali Civil War, facilitated by voluntary agencies (VOLAGS) such as Lutheran Social Services and Catholic Charities, drawn by job opportunities, affordable housing, and existing community networks.
How did MN get the nation's largest Somali population? — Star Tribune
A federal audit found that Minnesota's Child Care Assistance Program (CCAP) had deficiencies in verifying provider billings against attendance records, increasing the risk of fraud, waste, and abuse, with an estimated $7.8 million in improper payments identified in a sample.
Federal audit reveals oversight flaws in Minnesota's child care payments — FOX 9
Somali Minnesotans generate over $500 million in annual income and contribute approximately $67 million in state and local taxes each year, with an overall economic impact estimated at $8 billion through jobs and spending.
Somali Minnesotans drive economic growth, pay $67M taxes annually — KSTP
Records indicate Minnesota has been addressing fraud warnings in the Child Care Assistance Program (CCAP) for over a decade, with more than 60 suspected fraud cases in 2013 alone, highlighting long-standing oversight issues.
Records reveal Minnesota's long history with day care fraud warnings — CBS News
In recent Minnesota fraud investigations, many of the child care centers under scrutiny are run by Somali immigrants, with federal probes focusing on alleged schemes exploiting programs like CCAP, amid claims of widespread fraud totaling potentially $9 billion across social services.
Minn.'s Somali social-services scammers may have stolen $9 billion — New York Post
📰 Source Timeline (2)
Follow how coverage of this story developed over time
- DCYF’s Office of Inspector General will immediately begin additional on-site compliance visits at child care centers, in collaboration with Minnesota BCA agents.
- State officials say 55 child care providers receiving program funding are currently under investigation, including four of the sites highlighted in the viral December video.
- DCYF and providers learned of the HHS child-care funding freeze at the same time as the public; the state has until Jan. 9 to provide additional information to HHS or risk further penalties or restrictions.
- Despite the federal freeze, DCYF is instructing CCAP providers and families to continue program requirements and practices as usual while the investigation proceeds.
- Senior HHS officials, including ACF Assistant Secretary Alex Adams and Deputy Secretary Jim O’Neill, publicly allege that Minnesota allowed scammers and fake daycares to siphon millions over the past decade.