Child Care Fraud Confirmed by State Auditor’s New Report

On Mar. 13 the Office of the Legislative Auditor (OLA) released an extensive report on the allegations of fraud that have been a concern for years within the Child Care Assistance Programs (CCAP).

The Minnesota state auditor released on Mar. 13 a report on the CCAP fraud allegations that began after a report from Fox 9 revealed as much as $100 million in taxpayer money had fraudulently been shipped to Somalia, after being given to Minnesota Daycare facilities.

The report is able to identify a serious rift between Minnesota’s Department of Human Services (DHS) and the CCAP. The CCAP manager of investigations identified more than 100 daycare centers under review for fraudulent practices, pinpointing the fraud rate at 50 percent of the $217 million paid to these child care centers. DHS did not like these conclusions from CCAP and hired their own independent investigators.

OLA also makes it clear that there is still a possibility  showing that the taxpayer money given to the childcare centers “has been sent by individuals in Minnesota to Somalia or other foreign countries, and terrorists have obtained and used the money.”

The fraud concerns over Minnesota daycare providers have existed for years. The report finds concerns in 2017 where 67 percent of the CCAP funds, $146,217,382, went to the top 150 daycare providers where 100 of those 150 exhibited significant signs of fraud.

Among these concerns, the CCAP investigators also identified additional trends in the fraudulent CCAP centers that include identity falsification, false pay stubs, parent coercion and intimidation, and “staged” facilities for purposes of obtaining a CCAP license and in turn, money.  

Senate Majority Leader Paul Gazelka (R-Nisswa) commented on the report saying that it confirms suspicions of “widespread and rampant fraud.” He also points out that the fraudulent spending is “affecting not just the taxpayers, but the families that actually need assistance” adding that “Minnesotans are generous people, but they expect the government to be accountable to them.”

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