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- Governance for Children and Families (ACF) withheld approximately $17.7 million in federal child care funds from Minnesota in late 2023 due to allegations of widespread fraud, impacting access...
- The Administration for Children and Families, an agency within the U.S.
- Specifically, Minnesota officials identified irregularities involving the improper enrollment of ineligible children and the potential misuse of funds.
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The U.S. Governance for Children and Families (ACF) withheld approximately $17.7 million in federal child care funds from Minnesota in late 2023 due to allegations of widespread fraud, impacting access to affordable child care for families.
Administration for Children and Families (ACF) and the Funding freeze
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The Administration for Children and Families, an agency within the U.S. Department of Health and Human Services, paused payments to minnesota’s Child Care Development Fund (CCDF) grant in November 2023. This action stemmed from concerns raised by the state itself regarding potential fraudulent activity within the child care subsidy system.
Specifically, Minnesota officials identified irregularities involving the improper enrollment of ineligible children and the potential misuse of funds. The state self-reported these issues to the ACF, triggering a federal review and the subsequent withholding of funds.
According to a letter from the ACF to Minnesota Department of Human Services Commissioner Louise Parker, the agency steadfast that Minnesota had not met federal requirements for ensuring the integrity of its CCDF program.The Star Tribune reported the ACF requested a corrective action plan from Minnesota.
Minnesota Department of Human Services Response
The Minnesota Department of human Services acknowledged the issues and initiated an internal investigation. They also developed a corrective action plan to address the identified vulnerabilities and strengthen oversight of the CCDF program.
The state implemented several measures, including enhanced data analytics to detect fraudulent claims, increased audits of child care providers, and improved training for staff involved in administering the subsidy program.
On December 22, 2023, the ACF partially restored funding, releasing $14.5 million to Minnesota after reviewing the state’s corrective action plan. Reuters reported that approximately $3.2 million remained withheld pending further review.
Child Care Development Fund (CCDF) and Federal Oversight
The Child Care Development Fund is a federal program that provides financial assistance to low-income families to help them afford child care. States receive CCDF grants from the ACF and are responsible for administering the program according to federal guidelines.
The ACF has a duty to oversee the CCDF program and ensure that funds are used appropriately. This includes conducting audits, reviewing state plans, and taking action when fraud or mismanagement is suspected.
In fiscal year 2023, the CCDF received $8.5 billion in federal funding, supporting approximately 1.5 million children nationwide. The ACF published final allocations for the CCDF in December 2022.
Office of the Inspector General (OIG) Involvement
The Office of the Inspector General for the Department of Health and Human Services is also involved in investigating the allegations of fraud in Minnesota’s CCDF program. The OIG conducts independent audits and investigations to identify and prevent waste,fraud,and abuse in federal programs.
as of January 25, 2024, the OIG’s investigation is ongoing, and no findings have been publicly released. The OIG announced the investigation on December 1, 2023.