Minnesota families and child care providers scramble as federal funds hang in balance
By Chelsea Bailey, Sarah Owermohle, CNN
(CNN) — In the days since the Trump administration announced it would freeze federal child care payments to Minnesota amid an alleged fraud investigation, fear and confusion have spread almost as fast as the viral video that launched the scandal.
Minnesota receives about $185 million annually in federal child care funding, supporting care for 19,000 children, according to the US Department of Health and Human Services. The state says the money helps cover the cost of routine child care for thousands of low-income families each month, allowing parents to work or attend school.
But HHS announced Tuesday it would freeze that funding – and it’s not clear if there are any alternate plans for families affected by the freeze.
“Funds will be released only when states prove they are being spent legitimately,” Deputy Secretary of HHS Jim O’Neill said Tuesday.
Now, families and child care providers are grappling with the cascade of consequences that may soon come if federal funding dries up.
“I’m a parent who receives federal funding for child care for my kiddo,” Deko Nor told reporters at a news conference at the Minnesota State Capitol in St. Paul on Wednesday.
“I’m currently a medical student, I rely on child care, I work,” she said. “If child care is cut, I’m unable to go to work, or go to school.”
A pause stretched on as Nor, who had to skip school to attend the news conference, grew too emotional to continue her remarks.
The child care providers who spoke at the capitol Wednesday said they adamantly opposed fraud and supported efforts to investigate and address any claims of wrongdoing.
But they also said they felt compelled to stand in support of the Somali providers who may be too afraid to speak up after Nick Shirley’s video claiming to find widespread fraud at Somali-run child care centers went viral.
The child care centers featured in the video were operating as expected when visited by investigators, the state Department of Children, Youth, and Families said in a news release Friday.
The agency gathered evidence and initiated further review, noting the investigation into four of the centers was ongoing, the report stated.
Minnesota’s Twin Cities are home to the nation’s largest population of Somalis, a community that has recently experienced heightened tensions over increased immigration enforcement and disparaging remarks from President Donald Trump.
Amanda Schillinger, director of Pumpkin Patch Childcare & Learning Center in Burnsville, Minnesota, said she feels the community is being “unfairly vilified.”
“The truth is Minnesota has guardrails in place to make defrauding the child care system extremely difficult,” she said. “Fraud is never acceptable; but cutting off child care funding to everyone in the state is not the answer, and it’s not acceptable.”
The Minnesota Department of Children, Youth, and Families doubled down on their commitment to preventing fraud and continuing to support families in the statement on Friday.
But, the agency warned, the distribution of “unvetted or deceptive claims and misuse of tip lines can interfere with investigations, create safety risks for families, providers, and employers, and has contributed to harmful discourse about Minnesota’s immigrant communities.”
Schillinger said 75% of the children who attend her program qualify for child care funding through the state.
“We can’t afford to continue to operate if we lose 75% of our enrollment,” she said at the news conference.
Child care workers ‘did what they should have’
Mary Solheim comes from a family of educators, and told CNN she’s spent the better part of the last 40 years working at a child care facility in Maplewood, just outside St. Paul.
She said she felt compelled to speak out after watching Shirley’s video, which has amassed over 100 million views online after it was shared by conservative figures.
In the video, Shirley, a 23-year-old content creator who has shared anti-immigrant and anti-Muslim videos in the past, approaches multiple child care centers that he claims are owned by Somalis and demands that they prove children are enrolled in the facilities.
Solheim said her first reaction upon seeing the video was to question why men with a microphone and camera were demanding to see children.
Then later, when two Somali women appear to be barricading the door to prevent Shirley and his team from gaining access, Solheim said she started to feel sick.
“They did what they should have done, which is to protect the children and keep the door shut,” she said of the day care workers.
Now, as the administration threatens to pull federal funding from the state, Solheim told CNN she’s worried her facility – which has operated for more than 40 years – may not be able to keep its doors open for the children and families who depend on it.
“We run on razor-thin budgets,” she said. “If that money is late, which sometimes it is, it may be a four-week wait after we’ve provided care (until we’re paid).”
Last month, the child care center’s furnace suddenly went out amid frigid temperatures, and needed to be replaced, she said, wiping out the last of the money in their reserves.
“If all funds are cut off, we are at about two to four weeks before we have to close.”
Cutting a ‘crucial piece of survival’
Maria Snider, director of the Rainbow Child Development Center in St. Paul, told reporters Wednesday that for many of the center’s families, federal child care assistance is a “crucial piece of survival.”
Snider said her mother opened the center in 1998 because she saw a need for affordable full-time child care, and they have since remained proud to welcome families who might require child care funding assistance.
“We believe that every child deserves access to high-quality early learning,” Snider said. “Many of the families at my center are one paycheck away from becoming homeless – I’m not exaggerating.
“I’m generally scared for what happens next if funding is stopped, and I can’t help but think that this is part of a larger designed plan and strategy to cut public funding.”
“This is Trump’s long game,” Minnesota Gov. Tim Walz said in a social media post on Tuesday. “We’ve spent years cracking down on fraudsters. It’s a serious issue – but this has been his plan all along. He’s politicizing the issue to defund programs that help Minnesotans.”
State officials convened Wednesday to assess the potential impacts and timing of the funding freeze, Clare Sanford, chair of government relations for the Minnesota Child Care Association, told CNN.
Families typically qualify for child care assistance after providing job information such as tax records, pay stubs and work schedules, showing they meet the income requirements, Sanford said.
Once qualified, parents can enroll their children with licensed providers who participate in the program. Those providers then bill the county on a two-week cycle, providing attendance records for the eligible children, she said.
The federal government foots roughly half of those costs on a sliding scale of payments to county and state officials; in the 2025 fiscal year, the Health and Human Services Department provided about $185 million to Minnesota’s child care assistance program.
O’Neill said all future payments to any states “will require a justification and a receipt or photo evidence before we send money.”
Snider told reporters her mom called her after seeing O’Neill’s posts about receipts.
“We’re a family-owned business so my mom called me and said, ‘Well, write to them and tell them whatever they want we’ll send!’ And we will!” Snider said. “We want kids to be able to come to our centers.”
“I have no problem complying with anything that they want.”
A DOGE-era policy returns
HHS spokesperson Andrew Nixon told CNN the requirements O’Neill referenced include “administrative data” for centers not suspected of committing fraud.
The child care centers under scrutiny must provide additional documentation including attendance records, inspection records, internal state discrepancies and any complaints the center received, Nixon said.
“These requirements help ensure the integrity of the program and protect both families and providers,” Nixon said. “The onus is on the state to provide additional verification, and until they do so, HHS will not allow the state to draw down their matching funds.”
Minnesota Attorney General Keith Ellison said his office is “exploring all our legal options to ensure that critical childcare services do not get abruptly slashed based on pretext and grandstanding.”
“This hasty, scorched earth-attack is not just wrong, it may well be illegal, and my team and I remain committed to protecting the people of Minnesota to the fullest extent of the law,” Ellison said in a statement on Wednesday.
The HHS announcement revives a “Defend the Spend” initiative launched by the US Department of Government Efficiency Service in early 2025. The bid to slash federal funding required HHS grantees, including certain child care programs funded through the Administration for Children and Families, to justify each transaction.
For Head Start, for instance, the requirements meant “short summaries outlining the purpose of the funds” for each request, per a webinar about the changes. The webinar instructs providers to “allow for extra time between when payments are due and when the request is submitted.”
Those requirements have been expanded across ACF programs including child care assistance, HHS said Tuesday through its DOGE account on X. The agency will expand its systems to allow “itemized receipts and photographic evidence” and work to make the receipts available to the public, it said.
Somali American community pleads for change
As state leaders and administration officials sparred over the intricacies of federal funding, the manager of a Somali-run day care in Minneapolis said he received a concerning phone call earlier this week.
Nasrulah Mohamed said Nokomis Daycare Center in Minneapolis experienced a break-in. The day care center was not featured in the viral video, according to the Minnesota chapter of the Council on American-Islamic Relations.
“As we walked around the day care, we saw that our office door was broken into as well,” he said at a news conference streamed by local news station KMSP on Wednesday,
“Unfortunately, we saw that there was important documentation, enrollment of the children and also employee documentation that was gone.”
CNN has reached out to the day care for comment and additional information, but did not immediately hear back.
Mohamed said the break-in was “devastating,” as is the influx of “hateful messages” they’ve received since Shirley’s video.
“This is frightening and exhausting,” he said.
“I want to say that there are hundreds of Somali day cares that are out there, and we all help our children and everyone in our community,” Mohamed said. “I want to say no intimidation is going to stop us.”
But a parent whose children attend the day care center said she is scared.
“Being a Somali American, I was always told that it is safe here and that you are welcome here, and this is no longer the story that I feel and my kids feel,” the mom said through an interpreter.
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