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Published On: Fri, Jan 2nd, 2026

HHS Assistant Secretary: Minnesota Child Care Services Could Not Tell Me With Confidence If Fraud Is Isolated Or Statewide

Health and Human Services Deputy Secretary Jim O’Neill and Assistant Secretary Alex Adams announced on Tuesday new requirements Minnesota must meet to qualify for federal reimbursement of child care payments. Gov. Walz responded and accused the Trump HHS of “politicizing the issue to defund programs that help Minnesotans.”

JIM O’NEILL, HEALTH AND HUMAN SERVICES DEPUTY SECRETARY: Hello, I’m HHS Deputy Secretary Jim O’Neill. I’m here with Assistant Secretary Alex Adams. Alex oversees the Administration for Children and Families. Intrepid journalists have made shocking and credible allegations of extensive fraud in Minnesota’s child care programs. We believe the state of Minnesota has allowed scammers and fake daycares to siphon millions of taxpayer dollars over the past decade. ALEX ADAMS, HHS ASSISTANT SECRETARY, ADMINISTRATION FOR CHILDREN AND FAMILIES: My office, ACF, provides Minnesota $ 185 million in child care funds each year. That money should be helping 19,000 American children, including toddlers and infants. Any dollar stolen by fraudsters is stolen from those children. Yesterday, I spoke directly with the Director of the Minnesota Child Care Services Office. She could not tell me with confidence whether those allegations of fraud are isolated or whether there’s fraud stretching statewide. O’NEILL: Today, we have taken three direct actions against the blatant fraud that seems to be rampant in Minnesota. First, I have activated our Defend the Spend system for all ACF child care payments across America. Starting today, we require a justification, receipt, or photo evidence before we make a payment. Second, I have just signed and sent a demand letter to Governor Walz. I required a full 360 review of these centers. This includes attendance records, licenses, complaints, investigations, and inspections. ADAMS: And third, we’ve launched a dedicated fraud reporting hotline and email address at childcare.gov. Whether you’re a parent, a provider, a member of the public, we want to hear from you. Let me be crystal clear. ACF expects every state to uphold the highest standards of oversight, monitoring, and accountability for federal dollars. Minnesota is no exception. O’NEILL: We’re committed to holding bad actors accountable. Regardless of rank or office, anyone who is involved in perpetrating this fraud against the American people should expect to be prosecuted to the fullest extent of the law.

Gov Walz. responds:


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