A viral video has put a national spotlight on Minnesota’s child care network as allegations of widespread fraud swirl. Records show Minnesota has been trying to improve oversight of the Child Care Assistance Program (CCAP) payment system for more than a decade.
The day after Christmas, YouTuber Nick Shirley released a video accusing nearly a dozen child care centers of taking government assistance without actually providing a service in Minneapolis. The video primarily features him and a man only referred to as “David” going to various centers, demanding entry or information, then stating that the center was empty.
Shirley’s central claim is that each day care is billing the CCAP for children who are not really there; WCCO found the video’s broad claims are not proven.
While federal and state investigators are now looking into each of the centers featured by Shirley, audits completed in the past 10 years show that Minnesota has lacked the teeth to properly vet attendance records and go after possible fraudsters proactively.
In May of 2025, the federal Office of the Inspector General released an audit of 200 randomly selected child care assistance payments from 2023. The agency found that in 38 instances, “Minnesota did not comply with requirements related to attendance and payment for services.” The auditors extrapolated that to mean that the state was making at least one error in 11% of payments made to 1,155 centers in 2023.
“Minnesota’s limited oversight of attendance documentation at childcare centers resulted in overpayments to providers,” the audit states. “A lack of oversight to ensure accurate and complete attendance documentation could increase the risk of fraud, waste and abuse to the CCAP program.”
The Office of the Inspector General made recommendations, including “strengthening its monitoring program to include routine reviews of CCAP attendance records for accuracy.”
In a response included in the audit, the Department of Health and Human Services agreed with this recommendation and others. DHS wrote that it is expanding what’s called the Early and Often Program, which “aims to ensure that new child care centers meet the requirements of CCAP by increased monitoring of their attendance record-keeping practices and compliance with state statutes.”
Months prior, in January 2025, Department of Children, Youth and Families Commissioner Tikki Brown acknowledged there are gaps in their fraud detection system when it comes to accurate attendance numbers.
“We certainly need to investigate that more thoroughly to ensure that agencies do have as broad authority as possible to investigate fraud and act on all aspects of fraud. I don’t know that that’s fully present,” Brown said.
In 2019, a report by the Office of the Legislative Auditor showed that the Minnesota Department of Human Services established an investigatory team to go after child care providers suspected of fraud in 2013. The office reviewed explosive claims of fraud from 2013 to 2018, ultimately finding that prosecutors were able to “prove” between $5 to $6 million worth of fraud in those years.
More than a dozen Minnesotans were charged in state and federal cases, but not everyone was convicted. The OLA could not provide an exact estimate, but the agency believed that the true extent of the fraud was greater than the $6 million figure. The OLA spoke to prosecutors who said that there were sometimes issues with the quality of evidence gathered by DHS.
The OLA stated in this audit that the review had a “limited scope … We did not evaluate CCAP, nor did we fully assess the state’s efforts to prevent, detect, and investigate CCAP fraud.”
Consistent across both reports is the recommendation to install electronic attendance gathering tools to ensure that numbers are recorded in real time, reducing the ability for centers to report false numbers.
At a rally designed to push back on the Trump administration’s decision to freeze all federal CCAP payments this week, DFL Rep. Carlie Kotyza-Witthuhn said that those systems would be up and running this summer.
At that same rally, providers scoffed at the idea that the current system is simple to defraud. Maria Snyder, a St. Paul area provider, said that she is consistently getting surprise visits and audits from state inspectors who rigorously check her attendance records. She said that you can get citations on complete technicalities.
“Imagine my surprise at this narrative that it’s so easy to scam child care assistance,” Snyder said.
At a February 2025 meeting of the House Fraud Prevention and State Agency Oversight Policy Committee, officials said that DHS has a team of four investigators who look into CCAP.
Since 2020, the team has recovered about $2.4 million, referring on average five cases annually for criminal investigations since 2021. During the same time frame, DHS has stopped payments to 79 CCAP providers, according to the committee.
CBS News found that of the day cares that Shirley visited, all but two are licensed. State inspectors visited each of the licensed centers within the past six months, issuing citations related to violations like safety and staff training, but not fraud.
Inspectors with the federal Department of Homeland Security and the state visited each of the day cares in Shirley’s video.
One of the day cares, which showed WCCO security footage that owners said proves children were present the day Shirley was there, said that DHS asked for two months’ worth of attendance records. The results of these two investigations are not yet public.
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