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- Allegations of fraud in Minnesota prompted changes in how Health and Human Services provides child care funding across the U.S.
A freeze to federal child care subsidies has been announced by the Trump Administration which could affect families across Mississippi. Yet, the impact remains unknown at this point.
The move was made last week after a YouTuber posted a video alleging fraud was occurring at several child care centers in the state of Minnesota.
U.S. Deputy Secretary of Health and Human Services Jim O’Neill followed with a video posted to social media on December 30 announcing all funding in the Child Care and Development Fund would not be paid until receipts or other proof is provided.
In his video, O’Neill cited the move as being due to reports from “intrepid journalists” who made “incredible allegations of extensive fraud in Minnesota’s child care programs.”
He went on to state that “we believe” those centers have been siphoning millions of tax dollars over the past 10 years.
“Today we have taken three direct actions against the blatant fraud that seems to be rampant in Minnesota,” O’Neill said.
The three actions included activating a system called “Defend the Spend,” which affects supplemental child care payments from the Administration for Children and Families provided across the nation.
“Starting today we require a justification receipt or photo evidence before we make a payment,” O’Neill said.
The second action involved sending a letter to Minnesota Governor Tim Walz (D) demanding a full review of child care centers to include records concerning attendance, licensing and complaints, to name a few.
Lastly, the department established a hotline and website where reports of alleged fraud can be reported by the general public.
With the nationwide freeze in child care funding, states across the nation are expressing concern.
Mark Jones, Chief Communications Officer for the Mississippi Department of Health and Human Services, said Mississippi received about $170 million in funding last year. When asked how this move will affect the state, Jones said the agency is awaiting more information from the federal government.
“We have had no official communication regarding the pause and how it will work,” Jones told Magnolia Tribune.
The U.S. Department of Health and Human Services stated Monday that it will now work with the Administration for Children and Families to roll back provisions from the 2024 Child Care and Development Fund rule that mandated states pay providers without verification of attendance or proof child care was provided.
“Congress appropriated this funding to support working families and ensure children have safe places to grow and learn,” Health and Human Services Secretary Robert F. Kennedy, Jr. said in a statement. “Loopholes and fraud diverted that money to bad actors instead. Today, we are correcting that failure and returning these funds to the working families they were meant to serve.”
Changes to the Health and Human Services’ rules will restore attendance based billing, remove the mandatory nature of upfront billing, and restore voucher flexibility. The voucher flexibility will restore parent choice by no longer steering states to contracts, HHS stated.
“Paying providers upfront based on paper enrollment instead of actual attendance invites abuse,” O’Neill said. “In Minnesota, we’ve seen credible and widespread allegations of fraudulent daycare providers who were not caring for children at all. The reforms we are enacting will make fraud harder to perpetrate.”
According to HHS, the public has 30 days to submit comments concerning the rule changes.
Jeremy Pittari
