Trump Administration Freezes Child Care Funds Amid Fraud Allegations in Minnesota

Wed Dec 31 2025 16:19:27 GMT+0200 (Eastern European Standard Time)

The Trump administration has announced a freeze on child care funds to Minnesota, citing rampant fraud in government programs, while local officials push back against politicizing the issue.

On Tuesday, Deputy Secretary of Health and Human Services Jim O’Neill stated that the Trump administration is freezing child care funding to Minnesota and initiating an audit of day care centers following allegations of fraudulent activities. Minnesota Governor Tim Walz emphasized that this approach politicizes serious issues of fraud while the state continues to address them. The controversy stems from investigations into fraud involving day care centers, particularly those operated by the Somali community, with significant sums allegedly misappropriated from federal funds meant for child welfare. Governor Walz has announced an upcoming audit to clarify the extent of the fraud, while federal officials have implemented strict measures to prevent further misuse of funds.

President Donald Trump’s administration announced on Tuesday that it’s freezing child care funds to Minnesota and demanding an audit of day care centers following a series of fraud schemes involving government programs in recent years.

Deputy Secretary of Health and Human Services Jim O’Neill stated on social platform X that the decision is a response to blatant fraud that appears to be rampant in Minnesota and across the country.

Minnesota Governor Tim Walz criticized the move on X, stating that fraud is indeed a problem the state has worked to combat, but the administration is using it as a pretext to defund essential programs for residents. He’s politicizing the issue to defund programs that help Minnesotans, Walz said.

O’Neill referenced a right-wing influencer claiming that day care centers operated by Somali residents in Minneapolis had committed fraud totaling up to $100 million. In response, O’Neill demanded an audit encompassing attendance records, licenses, complaints, investigations, and inspections of these centers.

We have turned off the money spigot and we are finding the fraud, O’Neill said.

The announcement comes one day after U.S. Homeland Security officials conducted a fraud investigation in Minneapolis, questioning workers at unidentified businesses.

Past investigations have exposed a massive $300 million pandemic food fraud scheme related to the nonprofit Feeding Our Future, with 57 convictions stemming from activities that exploited federally funded programs for children.

Recent allegations reveal that up to half or more of the approximately $18 billion in federal funds supporting 14 programs since 2018 may have been unlawfully taken. With many of the defendants being Somali Americans, the U.S. Attorney’s Office for Minnesota highlighted that these fraud schemes target vulnerable populations.

O’Neill also announced that future payments through the Administration for Children and Families will now need evidence before disbursement, and the agency has launched initiatives to report fraud. Annually, Minnesota receives $185 million in child care funds to support over 19,000 children, an initiative under scrutiny due to this fraud investigation.

Governor Walz plans an audit by late January to provide clarity on these issues while asserting that significant efforts are underway to prevent further fraudulent activities. Additionally, Rep. Ilhan Omar encourages understanding and not blaming the entire Somali community for the actions of a few individuals.