Minnesota child care centers seen in viral video are operating as expected, state's DCYF says
MINNEAPOLIS, MINNESOTA: Minnesota child care centers at the center of widespread fraud allegations were found to be operating as expected when investigators visited several facilities, the state Department of Children, Youth and Families (DCYF) said on Friday, January 2.
The state’s announcement comes days after YouTuber Nick Shirley's video alleging rampant fraud at Somali-run daycares gained millions of views, stoking criticism for Governor Tim Walz and prompting stepped-up federal oversight, including frozen childcare payments and enhanced documentation requirements.
State inspections find children present at most centers
DCYF officials said inspectors visited four of the child care centers highlighted in the viral video.
According to the release, "Children were present at all sites except for one – that site, was not yet open for families for the day when inspectors arrived."
The state did not rule out further concerns but said it gathered evidence and initiated ongoing reviews of the centers named in the video.
The department also warned that the spread of unverified claims and misuse of tip lines can interfere with investigations, create safety risks for families and workers, and contribute to harmful public discourse, especially affecting immigrant communities that rely on these essential services.
Viral video sparks national scrutiny and federal funding actions
The review comes after YouTuber Nick Shirley posted a viral video claiming widespread fraud at Somali-run daycare centers.
🚨 Here is the full 42 minutes of my crew and I exposing Minnesota fraud, this might be my most important work yet. We uncovered over $110,000,000 in ONE day. Like it and share it around like wildfire! Its time to hold these corrupt politicians and fraudsters accountable
— Nick shirley (@nickshirleyy) December 26, 2025
We ALL… pic.twitter.com/E3Penx2o7a
The video, which included limited evidence to support the allegations, had millions of views and was widely shared on social media platforms, amplifying the controversy.
Following the video’s circulation, Health and Human Services (HHS) froze all federal child care payments to Minnesota while the FBI and Department of Homeland Security expanded their investigations into alleged fraud.
We have frozen all child care payments to the state of Minnesota.
— Deputy Secretary Jim O'Neill (@HHS_Jim) December 30, 2025
You have probably read the serious allegations that the state of Minnesota has funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade.
Today we have taken three actions… pic.twitter.com/VYbyf3WGop
Deputy HHS Secretary Jim O’Neill also told states they must provide documentation, including receipts or photo evidence, to justify federal child care funding.
The allegations focused on funding from the Child Care Assistance Program (CCAP), a federal and state-supported programme that subsidises child care for working families with low incomes.
The total CCAP funds received by the centers mentioned in the video for fiscal 2025 exceeded $17 million, according to state figures.
State and federal officials emphasised that the inspections are part of a larger investigation into child care fraud and other safety-net programmes that have faced challenges in recent years.
Minnesota’s DCYF said it is continuing to review records and gather information, while HHS has required a higher level of documentation from the state before resuming any paused federal payments.
