Minnesota faces deadline to provide child-care fraud probe data to US

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Minnesota has less than a week to meet a federal deadline for documents tied to a child-care fraud probe that is affecting the state’s eligibility for additional funding, the Minnesota Department of Children, Youth and Families said in an email shared with The Associated Press. The state agency said the information is due Jan. 9 and that federal officials have warned Minnesota could lose funding if the state does not provide what they are seeking.

In the same email, Minnesota described the steps it has taken in response to fraud accusations that surfaced after a viral video posted online. The agency said inspectors conducted spot checks and reviews of nine child-care centers in the week after the influencer video was posted, and that officials found several of the accused centers “operating as expected.” The email added that one center had not yet been open at the time of the spot checks, and that investigations continued at four of the centers.

Minnesota’s email also addressed how providers and families were expected to respond while federal funding remains frozen. The agency instructed child-care providers and families relying on the frozen federal child-care program to continue the program’s “licensing and certification requirements and practices as usual,” and it did not say recipients themselves needed to take action or provide the requested information. In a brief passage included in the email, the state agency said, “We recognize the alarm and questions this has raised,” adding that it learned of the freeze at the same time other people did, based on social media.

The Minnesota case is part of a broader effort by the Trump administration to freeze child-care funds to Minnesota and other states as it reviews allegations that federal child-care money has been used fraudulently. The email said federal officials did not send a formal communication to Minnesota until late Tuesday night, after Health and Human Services Deputy Secretary Jim O’Neill posted about the freeze on X.

The state’s deadline was highlighted as members of Congress prepared to scrutinize the allegations further. The U.S. House Committee on Oversight and Government Reform said it will hold a hearing Wednesday about the allegations of fraudulent use of federal funds in Minnesota, and an HHS spokesperson said the federal child-care fraud hotline has received more than 200 tips.

In Minnesota, the controversy has also prompted political criticism and a warning about social-media claims. Minnesota Democrats said the Trump administration was playing politics and hurting families and children, while the Department of Children, Youth and Families said in a Friday press release that it conducts regular oversight activities for the child-care program and cited “55 related open investigations involving providers.” The department said “distribution of unvetted or deceptive claims and misuse of tip lines can interfere with investigations” and contribute to harmful discourse about immigrant communities.

Maria Snider, director of a child-care center in St. Paul and vice president of the Minnesota Child Care Association, said providers typically receive payment at least three weeks after services are provided. She said some 23,000 children and 12,000 families receive funding from the targeted child-care program each month on average, and she described the financial effects of funding uncertainty for centers operating on thin margins. “For a lot of centers, we’re already running on a thin margin,” Snider said, adding that even a 10% to 15% share of children receiving child-care assistance can represent “a dip in your income.”

Federal officials have described the scope of the data request, and Minnesota said it was not yet clear how much information the state already had. According to the email, the U.S. Administration for Children and Families asked Minnesota for data spanning 2022 to 2025, including identifying information of recipients of child-care funds, a list of providers who receive the funds, how much each receives, and “information related to alleged fraud networks and oversight failures.” The email said HHS would provide more information by Jan. 5, but it also said Minnesota did not know the full impact because it remained unclear what kinds of funding restrictions the state might face.

Minnesota said HHS indicated five child-care centers that receive funds from the child-care program or Temporary Assistance for Needy Families would have to provide “specific documentation” such as attendance, inspections and assessments. At the same time, the state said it lacked clarity about what the federal review would ultimately mean for payments tied to the frozen program, leaving the practical outcome uncertain for providers and families who depend on subsidized child care.