Minnesota 'on the clock' as HHS threatens penalties over childcare fraud scandal

"We asked Minnesota for evidence that child care funding goes to legitimate providers," Jim O'Neill, deputy secretary for the Department of Health and Human Services (HHS), wrote in an X post video alongside HHS Assistant Secretary Administration for Children and Families (ACF) Alex Adams. "Six weeks later, they still have not sent this information."

"We are no longer asking, we are demanding," Adams said. "Since Minnesota refused to comply with their federally approved state plan and regulations, ACF has sent a preliminary notice of non-compliance to Minnesota."

O'Neill said the state has 60 days to send the desired documents to federal officials.

"We put Minnesota on the clock," O'Neill said in the video. "If their response is insufficient, we'll pursue full penalties under the law against the state."

"Every dollar that the state diverts into fraud is stolen from the intended Minnesota recipient. The status quo was to trust the state to stop fraud. That clearly did not work," O'Neill said.

"Intrepid journalists have made shocking, incredible allegations of extensive fraud in Minnesota's childcare programs," O'Neill said in a Dec. 30 video posted on X. "We believe the state of Minnesota has allowed scammers and fake daycares to siphon millions of taxpayer dollars over the past decade." 

A spokesperson for Walz's office told Fox News in December that they felt the investigation was politically motivated.

"Fraud is a serious issue. But this is a transparent attempt to politicize the issue to hurt Minnesotans and defund government programs that help people," the spokesperson said.

Adams said the ACF has a team on the ground in the state conducting an "on-site monitoring visit," where the department plans to attempt to gather records the state has not provided.

The ACF and the state Department of Health office of the inspector general did not immediately respond to Fox News Digital's request for comment.