Minnesota Governor Tim Walz criticized the Trump administration this week after federal officials paused certain child care payments amid expanded scrutiny of alleged fraud in state social services programs. “This is Trump’s long game,” Walz wrote on X, arguing the freeze politicized an issue the administration supposedly does not prioritize, while hurting working Minnesotans who rely on these programs.
The Department of Health and Human Services (HHS) froze payments after Deputy Secretary Jim O’Neill demanded an audit in response to allegations raised in a viral video by YouTuber Nick Shirley. Going forward, HHS announced that all payments from the Administration for Children and Families to states will require prior justification, including receipts or photo documentation. The Department of Homeland Security has also deployed agents to Minneapolis, and the Small Business Administration paused grants to the state.
The investigation stems from long-running concerns over fraud in Minnesota’s social services programs. Since 2022, the Department of Justice has charged 98 individuals connected to fraud in 14 state programs, with alleged losses totaling billions, though confirmed cases may amount to around $218 million. Walz ordered a third-party audit in October and appointed Tim O’Malley to oversee program integrity.
Shirley’s viral video highlighted multiple child care centers, claiming over $110 million in taxpayer funds were misused. One facility, Quality Learning Center, appeared empty despite being licensed for 99 children and having received $1.9 million in state funding in 2025 alone.
Republicans argue the state failed to prevent widespread fraud and call for congressional oversight, while Democrats, including Walz, emphasize the potential impact on families relying on child care programs. The House Oversight Committee plans hearings in the coming weeks to examine the allegations and review systemic safeguards.
As federal scrutiny continues, Minnesota faces a delicate balancing act: ensuring accountability and preventing fraud while maintaining critical services for families and avoiding political escalation.