The U.S. Trump administration announced that it would suspend federal child care funding to Minnesota while calling for a detailed audit into alleged fraud in government assistance programs.
Deputy Secretary of Health and Human Services Jim O’Neill posted on X that the decision was prompted by “blatant fraud that appears to be rampant in Minnesota and across the country.”
Deputy Secretary Jim O’Neill Cites ‘Blatant Fraud’ Nationwide
O’Neill referenced a right-wing influencer who posted a video Friday claiming that Somali-run day care centers in Minneapolis had committed up to $100 million in fraud. O’Neill demanded that Governor Walz submit a full audit of these centers, including attendance records, licenses, complaints, investigations, and inspections.
“We have turned off the money spigot and we are finding the fraud,” O’Neill said.
Minnesota Governor Tim Walz Pushes Back Against Federal Move
Minnesota Governor Tim Walz responded on X, saying that while fraud is a serious concern the state has been addressing for years, the federal move is part of “Trump’s long game.”
“He’s politicizing the issue to defund programs that help Minnesotans,” Walz said.
Allegations Involve Somali-Owned Day Care Centers in Minneapolis
The allegations center on Somali-run day care centers in Minneapolis. O’Neill’s demand for an audit comes after claims that these centers committed fraud, prompting calls for a detailed review of licenses, attendance, complaints, and inspections.
The Trump administration has also introduced new nationwide requirements for child care funding. Payments through the Administration for Children and Families (ACF) will now need justification and a receipt or photo evidence before funds are released.
A fraud-reporting hotline and email have also been launched.
Federal Investigations Include Pandemic-Era Food Fraud Cases
The funding suspension comes amid ongoing federal investigations, including a $300 million pandemic-era food fraud case linked to the nonprofit Feeding Our Future. In that case, 57 Minnesota defendants were convicted for exploiting a state-administered, federally funded program designed to provide meals to children during COVID-19.
A federal prosecutor also alleged earlier this month that half or more of the roughly $18 billion in federal funds supporting 14 programs in Minnesota since 2018 may have been stolen. According to the U.S. Attorney’s Office for Minnesota, most defendants in child nutrition, housing services, and autism program schemes are Somali Americans.
New Nationwide Requirements for Child Care Funding Introduced
O’Neill, who is serving as acting director of the Centers for Disease Control and Prevention, said payments across the U.S. through the ACF will now require “justification and a receipt or photo evidence” before funds are released.
ACF provides $185 million in child care funding annually to Minnesota, according to Assistant Secretary Alex Adams.
“That money should be helping 19,000 American children, including toddlers and infants. Any dollar stolen by fraudsters is stolen from those children,” Adams said.
Adams added that when he spoke with the director of Minnesota’s child care services office, she could not say “with confidence whether those allegations of fraud are isolated or whether there’s fraud stretching statewide.”
Political Debate Intensifies Amid Accusations and Audit Demands
Trump has publicly criticized Walz’s administration over the fraud cases, highlighting the issues to target the Somali diaspora, which has the largest Somali population in the U.S., AP reported.
Walz, the 2024 Democratic vice-presidential nominee, said an audit due by late January should give a clearer picture of the fraud’s scope. He added that his administration is taking aggressive steps to prevent further abuse.
“He’s politicizing the issue to defund programs that help Minnesotans,” Walz said again.
Ilhan Omar Urges Caution, Warns Against Targeting Entire Community
Minnesota’s most prominent Somali American, Democratic U.S. Rep. Ilhan Omar, has urged people not to blame an entire community for the actions of a relative few.