The BareStory
Minnesota state regulators announced that nine child care centers targeted by recent fraud allegations were found to be "operating as expected" following on-site inspections conducted this week. The Minnesota Department of Children, Youth and Families (DCYF) reported that children were present at eight of the nine facilities, noting that the remaining site had not yet opened for the day when investigators arrived.
The state inspections were prompted by a viral video from an independent journalist alleging that several centers were receiving government payments while appearing inactive. Following these claims, the U.S. Department of Health and Human Services (HHS) froze federal child care funding for Minnesota on Dec. 30. Federal officials have given the state until Jan. 9 to provide verifying information regarding fund recipients, warning that failure to meet the deadline could result in the loss of federal support.
Department of Homeland Security agents also launched an inquiry in Minneapolis, described by Secretary Kristi Noem as a "massive investigation" involving inspections of more than 30 sites. State officials estimated the frozen federal funding totals approximately $185 million annually. Additionally, new federal requirements now obligate all states to submit verification before receiving further child care disbursements.
While the DCYF’s recent compliance checks found the facilities operational, the agency confirmed that four of the nine centers remain under active investigation. The department noted it currently has 55 open investigations involving providers receiving money through the Child Care Assistance Program. According to the state, the nine centers highlighted in the video were allocated more than $17 million in funding for fiscal year 2025.
How it may affect me
As a U.S. reader:
• New federal mandates now require every state to submit verification before receiving child care disbursements, potentially affecting funding processes and administrative timelines across the country.
• Minnesota families relying on the $185 million annual federal support face potential service interruptions if state officials fail to provide required recipient data by the January 9 deadline.
• Taxpayers may see increased federal scrutiny of social service spending as agencies launch large-scale investigations to ensure allocated funds are supporting active, legitimate facilities.
