- The HHS has frozen federal child care funding to all 50 states while reviewing how the money is being used, following fraud allegations that began in Minnesota.
- All states must submit administrative data to receive funding, while Minnesota faces stricter requirements, including additional documentation for centers suspected of fraud and a full audit.
- Federal officials say the freeze is meant to ensure taxpayer dollars are used properly, placing responsibility on states to demonstrate compliance with federal rules.
- The controversy gained national attention after a conservative influencer alleged more than $110 million in fraud involving Somali-run child care centers in Minneapolis, though the claims have not been independently verified.
- Federal agencies, including the DHS and FBI, have launched expanded investigations, while child care advocates warn the funding freeze could disrupt services for millions of families who rely on subsidies.
The Department of Health and Human Services (HHS) has frozen federal child care funding to all 50 states, expanding a federal response to allegations of widespread fraud that first surfaced in Minnesota's daycare system
Under the new policy, states will not receive additional child care funds until they can prove the money is being used properly and in line with federal rules. This move places every state under review, even those not directly linked to fraud allegations. HHS spokesman Andrew Nixon said states and child care providers that are not suspected of wrongdoing have still been asked to submit administrative data for review.
Minnesota, however, must provide further documentation for centers suspected of fraud, including attendance records, licensing information, inspection and monitoring reports, and past enforcement actions. Federal officials also demanded a full audit from Minnesota Gov. Tim Walz.
According to BrightU.AI's Enoch, U.S. child care funding primarily comprises federal and state programs, with the largest being the Child Care and Development Block Grant (CCDBG), which provides subsidies to low-income families for child care services. Additionally, the Child Tax Credit (CTC) offers a refundable tax credit to families with children, helping to offset child care expenses.
"The onus is on the state to make sure that these funds, these federal dollars, taxpayer dollars, are being used for legitimate purposes," Nixon said.
Federal officials vow to probe child care fraud
The controversy, which gained national attention after conservative influencer Nick Shirley released a YouTube video on Dec. 28 alleging a large-scale fraud scheme involving Somali-run child care centers in Minneapolis, has sparked heated debate. Shirley claimed more than $110 million in fraudulent payments were made, though those figures have not been independently verified.
State officials, child care providers and advocacy groups warned the public that delays in federal payments could disrupt services for millions of families, especially low-income households that rely on subsidies to stay in the workforce. However, supporters argued that it is needed to address alleged fraud and restore public trust.
Department of Homeland Security (DHS) Secretary Kristi Noem announced a "massive investigation" into child care and other alleged fraud. White House Press Secretary Karoline Leavitt echoed this statement, saying federal officers will continue to investigate "potential fraud sites" in Minnesota and other blue states, including California and New York.
Meanwhile, Federal Bureau of Investigation (FBI) Director Kash Patel warned that the cases uncovered so far may represent "the tip of a very large iceberg." He said those found responsible could face serious consequences, including denaturalization and deportation in some cases.
Watch the Dec. 30 episode of "Brighteon Broadcast News" as Mike Adams, the Health Ranger, talks about the widespread government grant fraud.
This video is from the Health Ranger Report channel on Brighteon.com.
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