Children watch television at ABC Learning Center in Minneapolis, Minn., on Wednesday, Dec. 31, 2025. (AP Photo/Mark Vancleave)
WASHINGTON (AP) — President Donald Trump’s administration said Monday that it’s planning to tighten rules for federal child care funds after a series of alleged fraud schemes at Minnesota day care centers run by Somali residents.
A Department of Health and Human Services spokesman also reiterated the funding is on hold to all states until they provide more verification about the programs.
The plans to change the policies came the same day that Minnesota Gov. Tim Walz, the 2024 Democratic vice presidential nominee who has said the Trump administration is politicizing the issue, announced he’s ending his reelection campaign.
Here are some things to know about these moves:
Rule change plans announced
Health and Human Services announced Monday that it plans to change federal rules around the program, which serves lower-income families. As of last year, it was subsidizing care for about 1.3 million children.
Among the proposed changes: It would allow states to pay providers based on attendance rather than merely enrollment and pay providers after care is delivered rather than in advance.
“Paying providers upfront based on paper enrollment instead of actual attendance invites abuse,” Health and Human Services Deputy Secretary Jim O’Neill said in a statement.
When advanced payments were required in a 2024 rule change, officials said it would make child care centers more likely to serve families that use the subsidies.
Most states received waivers to delay implementing parts of the 2024 rules and many did not start the advance payments immediately.
Rule changes usually take at least several months to make and include a public comment period.
More verification needed for all states to get child care funds
All 50 states will have to provide additional levels of verification and administrative data before they receive more funding from the Child Care and Development Fund, according to an HHS spokesperson.
Minnesota will have to provide even more verification for child care centers that are suspected of fraud, such as attendance and licensing records, past enforcement actions and inspection reports.
In his social media post last week, O’Neill said all Administration for Children and Families payments nationwide would require “justification and a receipt or photo evidence” before money is sent.
That announcement came after a right-wing influencer posted a video last month claiming he had found that day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud.
The departments that administer the programs in California, Georgia, Iowa, Oregon and Washington all said Monday that they have not received guidance on how to comply with the requirements O’Neill announced.
Cindy Lenhoff, director of National Child Care Association, warned Monday that pausing payments to providers could cause some to close, and keep parents from being able to work.
“Withholding funds from complaint providers will not fix fraud,” she said. “It will only destabilize an already fragile system.”
Walz says Trump is politicizing the issue
Several Democrats including Walz accused Republicans of playing political games, and Walz doubled down Monday when he announced he would end his reelection campaign.
“Even as we make progress in the fight against the fraudsters, we now see an organized group of political actors seeking to take advantage of a crisis,” he said.
Walz touted the state’s efforts to crack down on fraud over the last several years, including with the help of the federal government. But now, he said the Trump administration’s move to withhold child care funding from the state shows “they’re willing to hurt our people to score cheap points.”
“They and their allies have no intention of helping us solve this problem, and every intention of trying to profit off of it,” Walz said.
Minnesota child care centers are alarmed
Maria Snider, director of the Rainbow Child Development Center and vice president of advocacy group Minnesota Child Care Association, said last week that fear is rising among families — many of which are living paycheck to paycheck — and child care centers that rely on the federal funding. Without child care system tuition, centers may have to lay off teachers and shut down classrooms, she said.
The Administration for Children and Families provides $185 million in child care funds annually to Minnesota, according to Assistant Secretary Alex Adams.
Ahmed Hasan, director of the ABC Learning Center that was one of those featured in the video by the influencer, said on Wednesday that there were 56 children enrolled at the center. Since the video was posted, Hasan, who is Somali, said his center has received harassing phone calls making staff members and parents feel unsafe.
He said the center is routinely subject to checks by state regulators to ensure they remain in compliance with their license.
“There’s no fraud happening here,” Hasan told The Associated Press. “We are open every day, and we have our records to show that this place is open.”
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