Minnesota Legislative Auditor Will Investigate Child Care Fraud Claims

MINNEAPOLIS (AP) — Minnesota's legislative auditor will investigate allegations that daycare providers are stealing money from the state's publicly funded child-care subsidy program at a rate that is more widespread than previously believed.

Legislative Auditor James Nobles told the Star Tribune on Friday that his office will explore the scope of the alleged fraud and whether the Human Services Department, which oversees the public subsidy program, had adequate controls to prevent it.

Nobles said several lawmakers asked his office to investigate after a Fox 9 report suggested widespread fraud in the Child Care Assistance Program. He said the report grabbed people's attention with allegations that the fraud is larger than first thought and with suggestions that the money is going overseas to fund international terrorism.

Acting Department of Human Services Commissioner Chuck Johnson told The Associated Press this week that none of the publicly charged child-care fraud cases have any connection to dollars going overseas.

Minnesota's Child Care Assistance Program provides financial assistance to help low-income families pay for child care so parents can get an education or work. More than 29,000 children are served in an average month, according to the Department of Human Services.

Johnson said Minnesota has put more resources toward investigating child-care fraud in recent years, and a special unit was established to look into this issue as it became a growing concern. Since 2014, a total of 13 child care centers have been closed and six operators have been convicted of criminal charges.

In many of these cases, the centers were accused of claiming they cared for more children than they actually did — billing the Child Care Assistance Program for children who weren't there.

Johnson said there are currently 10 open investigations into child-care fraud.