Minnesota Counters Viral Child Care Fraud Claims, Confirming Kids Were Present During 8 of 9 Inspections

Minnesota officials have pushed back against widespread online claims suggesting rampant fraud in federally funded child care programmes. 'Investigators confirmed the centers were operating as expected, gathered evidence and initiated further review,' said the Minnesota Department of Children, Youth and Families (DCYF).

Sent on 2 January 2026, the email from the department disclosed that they had performed spot checks on nine child care centres mentioned in a viral social media post. They pointed out that children were present at eight of those locations. The department clarified that the last facility to be inspected was found to be closed for the day, so there were no children present at the time.

The letter, seen by multiple media outlets including The Associated Press, was sent to child care providers. DCYF urged them to maintain regular programme operations and indicated that no immediate action was required from the recipients.

This was issued amid escalating scrutiny from the United States Department of Health and Human Services (HHS), which has demanded extensive documentation from Minnesota to continue releasing federal child care funds.

Officials have clarified that the regular inspections are a standard part of their oversight process and do not indicate any widespread fraudulent activity. They emphasised their dedication to evidence-driven evaluations that safeguard families and reduce interruptions to vital services.

Viral Video Sparks National Scrutiny

The dispute stems from a highly shared online video by content creator Nick Shirley. There, he visited several child care centres in the Minneapolis area and reported apparent discrepancies between federal payments and what he described as a lack of visible activity at the sites.

Shirley's video, which has garnered millions of views across various platforms, swiftly captured national interest. It was cited by certain federal officials as purported evidence of the misappropriation of taxpayer funds.

In light of the widespread attention surrounding these allegations, HHS expressed concern regarding possible fraudulent activities. It revealed new requirements for enhanced verification from Minnesota and all other states aiming to obtain Child Care and Development Fund payments. The agency is requesting detailed information, such as attendance records, licensing details, and inspection reports, to validate the authenticity of child care subsidies.

Minnesota's position is that the federal demands were communicated late — after social media postings — and that the push for documentation is broad and affects all states, though the spotlight remains on Minnesota.

$185 Million Funding Under Threat

State officials are now under a strict deadline — set for 9 January 2026 — to deliver comprehensive details regarding providers and families benefiting from federal child care funds. Not meeting this requirement could put at risk approximately $185 million (£137.5 million) in yearly funding that provides care for around 23,000 children from about 12,000 families throughout Minnesota.

Child care providers and advocates are voicing significant worries regarding the possible impacts of payment delays or freezes. Industry representatives warn that many operate on narrow margins, and any disruption to federal subsidies could lead to layoffs, reduced services, or even closures.

Maria Snider, a child care director in St Paul, emphasised that even small reductions in funding can lead to a dip in their income that jeopardises sustainability.

Meanwhile, critics of the federal response have characterised the actions as politicised. They argued that they unfairly target providers and families based on unverified social media content rather than substantive evidence.