Minnesota officials on Friday said the state has less than a week to hand over data to the U.S. government as part of a child care fraud review that followed a Trump administration decision to freeze federal child care funds. In an email sent to providers and shared with The Associated Press by multiple providers, the state’s Department of Children, Youth and Families said it has until Jan. 9 to provide information about recipients of the funds, along with other requested details tied to alleged fraud.
The state’s message came as investigators conducted limited spot checks and reviews of nine child care centers this week in response to viral allegations posted online last week by a right-wing influencer, and Minnesota said those inspections did not identify operational issues at several sites. Minnesota said one of the centers was not yet open at the time of the spot checks, and it said investigations were ongoing at four of the other centers.
Minnesota’s email also instructed providers and families relying on the federal child care program to continue the program’s “licensing and certification requirements and practices as usual.” It said the recipients themselves did not need to take any action or provide information to the state as part of the frozen-funds development.
“We recognize the alarm and questions this has raised,” the email said, adding that the agency learned of the freezing of funds at the same time many people did after the announcement circulated on social media. The department also said it “did not receive a formal communication from the federal government until late Tuesday night,” after Health and Human Services Deputy Secretary Jim O’Neill posted about the freeze on X.
Federal officials have said the funds freeze affects Minnesota and the rest of the states as the administration seeks additional verification and administrative data from states before releasing more money from the Child Care and Development Fund, a program intended to make child care affordable for low-income families. The Friday email described what the federal government asked Minnesota to provide, including identifying information of recipients, a list of providers who receive the funds, how much they receive, and information related to alleged fraud networks and oversight failures.
According to the email, the U.S. Department of Health and Human Services said five child care centers that receive funds through the child care program or Temporary Assistance for Needy Families would have to provide “specific documentation” such as attendance, inspections and assessments. The email also said HHS told Minnesota it would provide more information by Jan. 5, but the state agency wrote that it was unclear what kinds of funding restrictions it faces.
The dispute is also drawing attention on Capitol Hill. The U.S. House Committee on Oversight and Government Reform said it will hold a hearing Wednesday to discuss allegations of fraudulent use of federal funds in Minnesota. An HHS spokesperson said a child care fraud hotline set up earlier this week had received more than 200 tips.
In interviews, providers and advocacy groups raised concerns about how quickly shifting federal requirements could affect day-to-day operations. Maria Snider, director of a child care center in St. Paul and vice president of the Minnesota Child Care Association, said providers are paid at least three weeks after services are provided, and that even small percentage changes in child care assistance can affect centers’ finances.
Snider said providers may be exposed indirectly if children who attend a center are among those receiving federal support tied to the freeze. She said some centers already operate on thin margins, and she described how a dip in income tied to participating children could strain budgets.
Minnesota’s child care agency said in a Friday press release that inspectors conduct regular oversight activities for the child care program and that it noted there are 55 related open investigations involving providers. The department also warned that distributing “unvetted or deceptive claims” and misuse of tip lines can interfere with investigations and create safety risks for families, providers and employers, and it said such claims have contributed to harmful discourse about immigrant communities.
State and federal officials acknowledged that it remains unclear exactly how recipients will be impacted by the freeze and the data requests, including whether any funding restrictions will apply immediately to specific centers or families. The Minnesota email said the state did not yet know the full impact of the federal action and that its teams were analyzing the legal, fiscal and other aspects.