Despite reports that the Trump Administration is freezing child care funding to all 50 states after alleged daycare center fraud in Minnesota, North Carolina has not received any official notice of such action.
North Carolina Attorney General Jeff Jackson and North Carolina Department of Health and Human Services (NCDHHS) Secretary Dev Sangvai responded to those reports in a press release issued Monday by Jackson’s office.
An official from the US Department of Health and Human Services (HHS) told ABC News on Dec. 31 that it would pause the funding aid, stating that the funds will be released “only when states prove they are being spent legitimately.”
The accusations stem from an online video showing the alleged fraud in child care centers in Somali communities in Minneapolis. Other reports state that investigators found fraud schemes masquerading as daycare centers, medical providers, food assistance programs, and others, allegedly taking billions in government funding.
State officials, including Democratic Gov. Tim Walz, denied the accusations, but the two-time governor and vice presidential candidate for Kamala Harris’ 2024 presidential campaign, announced Monday that he would not be seeking re-election. Minnesota Republican lawmakers said his decision doesn’t leave him off the hook for the scandal.
“If fraud is discovered here, we will pursue it aggressively and make sure those responsible face consequences,” Jackson said in the press release. “That’s what our fraud prosecutors do every day. When people steal taxpayer money, they’re stealing from kids and families. We have zero tolerance for it, and we’ll use every tool we have to stop it.”
The Child Care and Development Fund (CCDF), the federal grant program administered by DHS, helps low-income families pay for child care. States use the funds to reimburse child care providers, subsidize care costs for eligible families, and ensure that basic safety and quality standards are met.
Jackson also noted that North Carolina issues subsidy payments to child care providers after attendance is submitted, and an HHS announcement on Monday that it would be rescinding a series of Biden-era child care rules that required states to pay providers before verifying any attendance didn’t pertain to the Tar Heel State.
CCDF requires states to have monitoring and reporting processes aligned with federal funding compliance expectations, including subsidy compliance training for child care providers, random monitoring visits reviewing attendance and arrival/departure records, targeted technical assistance, investigations for reported cases of fraud, and corrective action plans to support providers with compliance.
The NCDHHS Division of Child Development and Early Education (DCDEE) also works closely with NCDHHS’s Office of Internal Auditor to establish and enforce additional measures to identify and decrease the occurrence of fraud.
“Our priority is making sure North Carolina’s children and families have access to the care and resources they need to thrive,” Sangvai said in the release. “We are committed to strong oversight so child care dollars are used appropriately and reach the families they are intended to support. We are working closely with our federal partners to protect funding and minimize any disruption for children, families, and providers.”
The NCDOJ included in the press release that any complaint or concerns about potential fraud can be filed by calling (800) 859-0829 (for in-state callers only) or (919) 814-6300 to reach NCDHHS and the DCDEE Fraud Complaint Intake Unit (calls can be made anonymously); email [email protected], or send a letter to: DCDEE 2201 Mail Service Center, Raleigh, NC, 27699-2200.