HHS froze all childcare payments to Minnesota on December 30, 2025, after allegations of fraud surfaced. The U.S. Department of Health and Human Services took the step amid ongoing federal probes into misuse of funds at some daycare centres.
Deputy Secretary Jim O’Neill announced the freeze on social media. He cited serious claims that taxpayer money went to fraudulent operations over years.
The action affects about $185 million in annual federal aid for childcare in the state. Payments stop until proof shows legitimate use.
The move came days after a video by conservative YouTuber Nick Shirley went viral. Shirley visited several centres in Minneapolis, many described as Somali-run.
He showed buildings that looked empty or closed during business hours. One had a sign misspelling “learning” as “learing”. Public records, he said, showed millions in subsidies despite few or no children present.
Views on the video topped tens of millions quickly. Figures like Vice President JD Vance and others shared it. Vance called it an example of broader issues. Andrew Tate offered support to Shirley online.
HHS also started new rules nationwide. States now need receipts or photos to justify spending before getting funds. They launched a hotline for fraud tips. O’Neill demanded a full audit from Governor Tim Walz on the centres in the video.
Minnesota officials pushed back. The Department of Children, Youth, and Families said inspections found no fraud proof yet. Some centres had violations but stayed licensed.
One showed surveillance of parents dropping kids off the same day Shirley visited. State leaders called the freeze political.
This ties to bigger fraud cases in Minnesota. Earlier schemes, like Feeding Our Future, stole hundreds of millions from child nutrition programmes during Covid.
Many charged had Somali ties, though not all. Federal estimates suggest billions lost across social services since 2018.
The FBI and DHS already investigated related claims. They surged resources before the video, officials said. No new charges from Shirley’s sites yet.
Community groups worry about stigma. Minnesota has the largest Somali population in the U.S. Leaders say individual crimes don’t reflect everyone. Some centres defended locked doors as safety measures.
Low-income families use the Child Care Assistance Program. It helps parents work or study. A freeze could hit providers and families if it is long.
HHS said funds are released when states show proper spending. Broader checks aim to stop waste everywhere.
Reactions split. Some praise quick action against fraud. Others see targeting and rushed judgement.
Probes continue. Audits ordered. Minnesota plans its reviews. Taxpayers watch closely. Money for kids should reach them, many say. This case tests that.
As the year ends, focus stays on accountability. Results from checks will matter most.
