State and Local Fiscal Policy

HHS has frozen CCDF child‑care payments nationwide and issued Minnesota a preliminary notice of non‑compliance, giving the state 60 days to turn over attendance, licensing, inspection and payment records (including receipts or photos) or face full penalties, while ACF has an on‑site team and HHS officials say Minnesota failed to respond to prior requests. The move — spurred in part by a viral YouTube video alleging daycare fraud and accompanied by broader federal audits and funding freezes — has escalated criminal probes and political pressure even as state officials say many inspected centers were operating as expected and have launched audits and other corrective steps amid concerns about harm to families and Somali providers.