Mass. child care payments unaffected by federal fraud allegations

Massachusetts is not facing disruption to its $293 million share of federal child care payments after the Trump administration announced a nationwide freeze last week in response to fraud allegations in Minnesota, a top state official said Monday.

On Dec. 30, U.S. Health and Human Services deputy secretary Jim O’Neill announced the Administration for Children and Families froze all payments to Minnesota and that payments throughout the US would require “justification and a receipt or photo evidence” before funds are sent to states.

The changes are meant to address “the blatant fraud that appears to be rampant in Minnesota and across the country,” O’Neill said in a Dec. 30 post on X.

“Funds will be released only when states prove they are being spent legitimately,” he said in the post.

Massachusetts officials have not received any new guidance from the Administration for Children and Families related to Child Care Financial Assistance funds, Early Education and Care Commissioner Amy Kershaw said Monday during an appearance on “The 9:30 Call,” a virtual call hosted by Strategies for Children that gathers early childhood and care system stakeholders. The Bay State is also not facing any disruptions in payments to Child Care Financial Assistance, which helps low-income families pay for child care.

“Obviously we are incredibly concerned about families across the country and in Minnesota who may lose access to Child Care Financial Assistance based on acts by the federal government,” Kershaw said.

The state appropriates funds for the Child Care Financial Assistance program, which the Department of Early Education and Care manages, at the beginning of the fiscal year. Then the state seeks reimbursement from the federal government. Kershaw noted funds have already been appropriated for fiscal 2026, which ends June 30.

The federal announcement came after a video surfaced on YouTube alleging fraud in child care in Somali communities in Minnesota. Kershaw said none of those allegations have been proven. She also said there have been similar videos posted in Massachusetts and other states like Ohio, California and Washington.

“Intrepid journalists have made shocking and credible allegations of extensive fraud in Minnesota’s child care programs,” O’Neill said in a YouTube video posted on Dec. 31. “We believe the state of Minnesota has allowed scammers and fake day cares to siphon millions of taxpayer dollars over the past decade.”

O’Neill said he has sent a letter to Minnesota Gov. Tim Walz demanding a “full 360 review” of child care centers including attendance records, licenses, complaints, investigations and inspections. The Administration for Children and Families also launched a dedicated fraud reporting hotline and email address, Alex Adams, assistant secretary of the agency, said in the video.

A Department of Health and Human Services spokesperson said the federal “Defend the Spend” initiative applies to all states. The initiative, launched last year through the Department of Government Efficiency, has been expanded to include ACF payments, according to a Dec. 30 post on X from user “DOGE_HHS” and reposted by DOGE. Since March 2025, the initiative only applied to HHS discretionary payments.

Over the coming days, the system will expand to “support itemized receipts and photographic evidence, and make all data/receipts, where possible, available to the public,” the agency said in the post.

Funding for Massachusetts Child Care Financial Assistance totals about $1.087 billion for fiscal 2026, according to a December report from the Massachusetts Taxpayers Foundation. In fiscal year 2025, the program covered more than 66,000 children. The state covers most of the costs and in recent years, funds from a statewide income surtax instituted in 2023 have gone toward the program. In fiscal 2026, federal funds accounted for more than an anticipated $293 million of the program, according to the state.