The Trump administration is widening a federal freeze on child care funding beyond Minnesota as the U.S. Department of Health and Human Services (HHS) ramps up a nationwide review aimed at rooting out fraud.

Deputy HHS Secretary Jim O’Neill announced Tuesday that the agency froze all federal child care payments to Minnesota as officials investigate allegations of widespread fraud in the state’s subsidy system. The funding freeze will extend to other states as federal officials review how taxpayer dollars are used, according to multiple reports.

“HHS has a clear duty to verify the proper use of taxpayer funds,” spokesman Andrew Nixon said in a statement, as reported by the New York Post. “The documentation process exists to rule out fraud and confirm that funds are supporting legitimate child care providers.

Minnesota Gov. Tim Walz pushed back after the Trump administration moved to freeze federal child care funding in the state, accusing the White House of using fraud concerns to justify the action.

This is Trump’s long game.

We’ve spent years cracking down on fraudsters. It’s a serious issue – but this has been his plan all along.

He’s politicizing the issue to defund programs that help Minnesotans. https://t.co/7ByWjeXxu0

— Governor Tim Walz (@GovTimWalz) December 31, 2025

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“This is Trump’s long game. We’ve spent years cracking down on fraudsters. It’s a serious issue – but this has been his plan all along. He’s politicizing the issue to defund programs that help Minnesotans,” Walz wrote.

President Donald Trump said that investigators expect to uncover large-scale abuse elsewhere, including in California.

“There is more FRAUD in California than there is in Minnesota, if that is even possible,” Trump wrote on TRUTH Social. “When you add in Election Fraud, then they are tied for first. Two Crooked Governors, two Crooked States!”

The move follows viral footage that YouTuber Nick Shirley posted Friday showing several purported Somali-run daycare centers in Minnesota that appeared to have no children present during his visits, despite receiving state funds. KSTP reported that the Quality “Lerning” Center accumulated 95 violations cited by a Minnesota agency between 2019 and 2023.

Several state employees have accused Walz of retaliating against whistleblowers who flagged the schemes and as federal prosecutors pursued multiple cases, saying Walz bore responsibility for the fraud and rejected early warnings. Walz later acknowledged the problem during a Nov. 30 appearance on Meet the Press, saying Minnesota “attracts criminals.”

The HHS did not immediately respond to the Daily Caller News Foundation’s request for comment.

(Featured Image Media Credit: Screenshot/X/C-SPAN)

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