Minnesota has less than 1 week to provide documents to US government in child care fraud probe

Minnesota officials have less than one week to provide the Trump administration with information about providers and parents who receive federal child care funds or risk losing potentially millions of dollars in federal funding, state officials said Friday.

In an email sent Friday to child care providers shared with The Associated Press by multiple providers, Minnesota’s Department of Children, Youth, and Families said it has until Jan. 9 to provide a set of verifying information about recipients. The announcement earlier this week by the Trump administration that it would freeze child care funds to Minnesota and the rest of the states comes after a series of fraud schemes at Minnesota day care centers, many run by Somali residents. The move came after a right-wing influencer alleged there were widespread abuses.

The Administration for Children and Families, a division of the U.S. Department of Health and Human Services, provides $185 million in child care funds annually to Minnesota, federal officials have said.

The email instructed providers and families who rely on the frozen federal child care program to continue the program’s “licensing and certification requirements and practices as usual.” It does not say that recipients themselves need to take any action or provide any information.

“We recognize the alarm and questions this has raised,” the email said. “We found out about the freezing of funds at the same time everyone else did on social media.”

The state agency added that it “did not receive a formal communication from the federal government until late Tuesday night,” which was after Health and Human Services Deputy Secretary Jim O’Neill posted about the freeze on X. All 50 states will have to provide additional levels of verification and administrative data before they receive more funding from the Child Care and Development Fund, which is designed to make child care affordable for low-income families.

Minnesota is a target

The U.S. House Committee on Oversight and Government Reform will hold a hearing Wednesday to discuss the allegations of fraudulent use of federal funds in Minnesota. An HHS spokesperson said that the child care fraud hotline put up by the federal agency earlier this week has received more than 200 tips.

Minnesota has drawn ire from Republicans and the Trump administration over other fraud accusations.

Administration for Children and Families Assistant Secretary Alex Adams told Fox News on Friday that his agency sent Minnesota a letter last month asking for information on the child care program and other welfare programs by Dec. 26, but didn't get a response. The state did not immediately respond to a request for comment. Small Business Administration Administrator Kelly Loeffler posted Thursday on X that the agency suspended 6,900 Minnesota borrowers of COVID-19 era loans because of suspected fraud. Trump has also targeted the state's large Somali community with immigration enforcement actions and called them “garbage.”

Minnesota Democrats say the Trump administration is playing politics and hurting families and children as a result. Minnesota's Department of Children, Youth and Families said in a press release Friday that inspectors conduct regular oversight activities for the child care program, noting that there are 55 related open investigations involving providers

It is unclear how recipients will be impacted

Maria Snider, director of a child care center in St. Paul and vice president of advocacy group Minnesota Child Care Association, said providers currently get paid at least three weeks after services are provided. Some 23,000 children and 12,000 families receive funding from the targeted child care program each month on average, according to the state.

“For a lot of centers, we’re already running on a thin margin,” she said. “Even centers where 10 to 15% of their kids are on childcare assistance, that’s a dip in your income.”

Any child who attends a child care center with attendees who receive federal funding could be impacted, Snider said.

According to the Friday email from Minnesota’s Department of Children, Youth, and Families, HHS sent a letter to Minnesota asking for data from 2022 to 2025, including identifying information of all recipients of the child care funds, a list of all providers who receive the funds, how much they receive and “information related to alleged fraud networks and oversight failures.” It’s unclear whether Minnesota already has the data the administration is asking for.

HHS said 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, according to the email.

HHS said it would provide Minnesota with more information by Jan. 5, but the state agency wrote that it’s unclear what kinds of funding restrictions it faces.

“Our teams are working hard to analyze the legal, fiscal, and other aspects of this federal action,” the email says. “We do not know the full impact.”