President Donald Trump’s administration announced Tuesday that it is freezing federal child care funding to Minnesota and demanding audits of certain day care centers following multiple fraud schemes tied to government programs in recent years. The decision marks an escalation in federal oversight of Minnesota programs that receive child care assistance and comes amid broader investigations into misuse of public funds.
Deputy Secretary of Health and Human Services Jim O’Neill said on the social platform X that the funding freeze was prompted by what he described as “blatant fraud that appears to be rampant in Minnesota and across the country.” According to O’Neill, the administration is moving to stop payments while authorities work to identify improper activity within the system.
Federal and State Officials Clash Over Fraud Response
Minnesota Gov. Tim Walz responded publicly, also on X, disputing the administration’s framing of the issue. Walz said fraud is a serious problem that Minnesota officials have been addressing for years, but argued that the funding freeze fits into what he called “Trump’s long game.”
“He’s politicizing the issue to defund programs that help Minnesotans,” Walz said.
O’Neill pointed to claims made by a right-wing influencer who posted a video Friday alleging that day care centers operated by Somali residents in Minneapolis were involved in as much as $100 million in fraud. In response, O’Neill said he has demanded that Walz provide an audit of those centers, including attendance records, licensing documentation, complaints, investigations, and inspection reports.
“We have turned off the money spigot and we are finding the fraud,” O’Neill said.
The announcement followed activity by U.S. Homeland Security officials, who were in Minneapolis one day earlier conducting a fraud investigation. Officials visited unidentified businesses and questioned workers as part of that inquiry, though further details about those visits were not publicly released.
