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The Trump administration is cutting off all childcare payments to Minnesota and demanding a sweeping audit of day care centers as a ballooning fraud scandal engulfs the state’s human services system.
“We have frozen all child care payments to the state of Minnesota,” Deputy Health and Human Services Secretary Jim O’Neill wrote on X Tuesday afternoon, after a viral video investigating alleged fraud at day care centers drew national attention.
O’Neill said Minnesota has “funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade,” and laid out three moves to slam the door on what he calls an open vault.
The administration will require “a receipt or photo evidence” for payments made to states through the U.S. Administration for Children & Families (ACF).
O’Neill said he “demanded” Minnesota Gov. Tim Walz conduct a “comprehensive audit” of the highlighted centers — including “attendance records, licenses, complaints, investigations, and inspections.”
He specifically cited YouTuber Nick Shirley’s video published Friday, in which he visited day care centers across Minneapolis receiving millions in state funds that appeared to be closed or out of operation.
HHS also launched a hotline and email address for fraud tips at childcare.gov. “Whether you are a parent, provider, or member of the general public, we want to hear from you,” O’Neill said.
“We have turned off the money spigot and we are finding the fraud.”
Minnesota’s daycare system just got a new rule from Washington — no receipts, no cash.
🚨🇺🇸 BREAKING: HHS FREEZES ALL CHILDCARE PAYMENTS TO MINNESOTA OVER FRAUD
Deputy Secretary Jim O’Neill:
“We have frozen all child care payments to the state of Minnesota.”
HHS has taken three immediate actions:
-Activated “defend the spend” system for all ACF payments… pic.twitter.com/tltxl9bI01
— Mario Nawfal (@MarioNawfal) December 30, 2025
More over at The New York Post:
Trump admin halts all childcare payments to Minnesota after massive fraud allegations: ‘We have turned off the money spigot’ https://t.co/sdEXLahACd pic.twitter.com/UQv3jQ5sBy
— New York Post (@nypost) December 30, 2025
