Speaking in a video alongside Health and Human Services Assistant Secretary for the Administration for Children and Families (ACF) Alex Adams, deputy secretary for the Department of Health and Human Services (HHS) Jim O’Neill declared that Minnesota is “on the clock” to provide much needed information about its child care programs, and if it does not it will be fully cut off.
As background, in late December of 2025, O’Neill noted the accusations of fraud centering on Minnesota and explained that he was taking action to stop such fraud from occuring, saying, in part, “I have activated our defend the spend system for all ACF payments. Starting today, all ACF payments across America will require a justification and a receipt or photo evidence before we send money to a state”.
At that time, O’Neill also said, “Intrepid journalists have made shocking, incredible allegations of extensive fraud in Minnesota’s childcare programs,” adding, “We believe the state of Minnesota has allowed scammers and fake daycares to siphon millions of taxpayer dollars over the past decade.”
Now, Minnesota has apparently refused to follow up on that demand by providing the information, as O’Neill noted in a new video and post released on X. Summarizing the situation in the caption of the post, O’Neill said, “We asked Minnesota for evidence that child care funding goes to legitimate providers. Six weeks later, they still have not sent this information. Now we are demanding.
In the video itself, Adams reiterated that point, noting that Minnesota has refused to comply with reasonable government demands about the fraud matter, and as such it is now demanding rather than asking for such information. He said, “We are no longer asking, we are demanding. Since Minnesota refused to comply with their federally approved state plan and regulations, ACF has sent a preliminary notice of non-compliance to Minnesota.”
O’Neill, chiming back in, explained that Minnesota has been given sixty days to comply by turning over the required information, and if it doesn’t do so, it will face significant penalties, including getting the federal taxpayer tap turned off. “We put Minnesota on the clock,” O’Neill said. He then added, “If their response is insufficient, we’ll pursue full penalties under the law against the state.”
That wasn’t all. O’Neill also noted that Minnesota is given $20 billion annually by the federal government, and that it has, up until now, been trusted to deal with fraud on its own, a state of things that is no longer the case because of the massive amount of fraud that Minnesota long allowed. “Every dollar that the state diverts into fraud is stolen from the intended Minnesota recipient. The status quo was to trust the state to stop fraud. That clearly did not work,” O’Neill said.
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Concluding, O’Neill added that the Minnesota fraud situation will be cracked down upon by HHS in an extremely thorough manner, and he will ensure that such healthcare programs are no longer a way for fraudsters to steal from taxpayers. He said, “We will continue to pursue every credible lead, and we will restore integrity to programs that serve America’s most vulnerable people.”
Watch him and Adams here: