The Department of Health and Human Services is freezing $10 billion in federal funds tied to child care programming in five Democratic-led states over allegations of fraud, an HHS official confirmed to the media.
The official said the states affected by the freeze are California, Colorado, Illinois, Minnesota, and New York.
Administration links move to fraud concerns and stricter oversight
The funding action comes as the Trump administration has been emphasizing tougher controls and expanded documentation requirements for child care funding, with the stated goal of reducing waste, fraud, and abuse.
HHS has also announced changes to how states can pay child care providers under the Child Care and Development Fund, including shifting back toward attendance-based billing and removing requirements that encouraged paying providers in advance of services.
Broader reporting changes followed earlier Minnesota-focused scrutiny
In late December, the administration’s focus on alleged fraud in Minnesota’s child care system also led to nationwide reporting adjustments, after officials initially signaled more targeted action. A department spokesperson later said the response centered on tightened documentation requirements and audits, rather than an outright funding freeze specific to Minnesota.
