Idaho lawmakers call for freeze on $14M in childcare funds cmid national fraud concerns

BOISE, Idaho (KIFI) — Two Idaho Republican lawmakers are calling on the federal government to put a pause on the release of $14 million in childcare funding until the state boosts its fraud prevention, citing "systemic vulnerabilities" and high-profile fraud allegations in other states.

In a letter sent Dec. 31 to the U.S. Department of Health and Human Services (HHS), Rep. Josh Tanner and Sen. Brian Lenney requested an immediate pause on "all solicitations, contract issuances, and disbursements authorized under Senate Bill 1206" The lawmakers argue that Idaho must implement more rigorous fraud-prevention rules before the state continues distributing the grants and subsidies intended to boost childcare in the state.

Key Concerns

The lawmakers are requesting that HHS work with Idaho to:

• Develop a comprehensive fraud-prevention and enforcement plan addressing enrollment verification, financial transparency, inspection protocols, and coordination with the Attorney General
• Review prior childcare grant and subsidy disbursements, as appropriate, to identify potential fraud, misuse, or noncompliance and assess recovery options
• Provide a briefing to the Legislature outlining safeguards, implementation timelines, findings, and any recommended statutory or regulatory changes.

"Proceeding with additional disbursements without strengthened safeguards would present unnecessary risk to taxpayers," Tanner and Lenney wrote, pointing to inadequate inspection controls and limited financial oversight as key concerns.

Minnesota Fraud Allegations and Background

The push for a freeze is largely driven by recent reports of daycare fraud in Minnesota. Those allegations gained national attention following a viral video by YouTuber and citizen journalist Nick Shirley, boosted by Vice President JD Vance and billionaire Elon Musk, which claimed several Minnesota-based Somali-run childcare centers were receiving state and federal funds while no children attended the facilities.

In response to those claims, the federal government has already taken action. On Dec. 30, HHS Deputy Secretary Jim O'Neill announced a freeze on childcare payments to Minnesota, now requiring "justification and a receipt or photo evidence" before funds are released. The state typically receives about $185 million annually in federal child care funding, supporting care for 19,000 children.

However, according to reports by CNN, investigators in Minnesota have cast doubt on Shirley's allegations, stating all child care centers accused of fraud in the video were "operating as expected." Despite this, on Monday, Minnesota Governor Tim Walz announced the end of his reelection campaign, citing the Republican Party's politicization of the fraud investigation.

Minnesota officials have until January 9 to provide the Trump administration with information about providers and parents who receive federal funds for child care, according to CNN.