(NewsNation) — The Trump administration is freezing some child care funds to all states until they can prove the funds are being spent legitimately.
“This is true for the CCDF program specifically,” Department of Health and Human Services spokesperson Andrew Nixon confirmed to NewsNation.
The program in question is the Child Care and Development Fund, a federal-state partnership providing subsidies to help low-income families pay for child care so parents can work or go to school.
The decision comes amid fraud investigations in Minnesota, where NewsNation has been on the ground. HHS says it has “turned off the money spigot” and is “finding the fraud.”
Additionally, HHS is requiring that all payments from its Administration for Children and Families to states across the country receive prior justification and a receipt or photo evidence.
HHS Deputy Secretary Jim O’Neill said Tuesday on the social platform X that the move is necessary amid “blatant fraud that appears to be rampant in Minnesota.”
In fiscal 2024, the federal government provided more than $172 million to Minnesota’s Child Care and Development Fund, according to the state’s Department of Children, Youth and Families. The department noted that Minnesota spent more than $31 million of that funding to “improve the quality and availability of child care” last fiscal year.
DHS has posted videos from several sites where fraud is suspected. All this comes after recent attention focused on Somali-run day care centers in Minneapolis, like the Learning Center day care, which was quiet when NewsNation visited on New Year’s Eve.
Separately, Republicans on the House Oversight Committee announced that they have invited Minnesota’s Democratic Gov. Tim Walz and Minnesota Attorney General Keith Ellison to testify in Washington.
Walz has ignored calls from Republicans to resign and has defended his record helping to prosecute fraud in the state.
Republican state Rep. Kristin Robbins, who will also be testifying, told NewsNation that other states need to be vigilant.
“Other states should be looking at their Medicaid-funded programs for these signs of fraud,” she said. “The red flags are multiple services by one provider, and it’s an easy barrier to entry, not a lot of checks on the providers.”
Robbins said she hopes other states are doing more on oversight than Minnesota has been.
“My concern is that once they figured out the business model, that [fraud] has been exported to other states,” she said.
Another red flag Robbins identified is large clusters of health care companies in one location.
NewsNation visited one building that has 22 different home and community-based health care companies registered.
When NewsNation entered the four-story building to find the companies, many appeared to be window and door fronts with nothing behind them.
At a different location in St. Paul, another building resembling a warehouse is home to 60 registered home and community health care organizations.
Another building, which appears to be on the radar of authorities, is home to 37 businesses, 17 of which are home health care organizations.