Minnesota Daycare Scandal: The Power of Transparency and Citizen Journalism
The revelation of widespread fraud in Minnesota’s childcare funding has engulfed public officials in the state and made national headlines in recent weeks. The fraud had been happening for years, but it took citizen journalist Nick Shirley showing viewers the scale of the grift to spark public outrage.
In response, Vice President J.D. Vance has floated the idea of a new Assistant Attorney General role to focus specifically on fraud like this. Progressive Rep. Ro Khanna says he wants a bipartisan fraud commission report. Both are fine ideas, but nothing will do more to drive durable reform than greater transparency and an engaged citizenry.
This is a moment Open the Books was built to meet in real time.
We’ve created the most comprehensive database of government spending in history, from federal to state and local governments, so that every taxpayer can become a citizen journalist and help identify waste, fraud and abuse.
When citizens can follow the money, accountability can follow faster.
As we’ve tracked the Minnesota scandal, we’ve combed our database for daycare businesses that received key federal funding, as well as all daycare facilities that have benefited from public dollars. We are publishing the lists to empower every American to look for fraud where they live and demand accountability. We don’t need to wait for government. We can crowdsource our findings and identify fraudulent recipients starting today. Minnesota is likely just the tip of the iceberg.
Learn the details below, download the files, and let’s get to work on the mission that brings us all together: using transparency tools to fight waste, fraud and abuse!
BACKGROUND
Independent journalist Nick Shirley and researcher David Hoch went door to door with cameras to visit several taxpayer-subsidized daycares in Minneapolis. State spending records show those daycares had collectively received millions in tax dollars to serve hundreds of children. But when Shirley and Hoch visited the centers and asked how to register a child, they instead found vacant buildings and ostensible front businesses, could not find any children and were mostly turned away by the adults in charge. The daycares are seemingly collecting tax dollars to care for children that don’t exist. Reports suggest the fraud ring likely runs into the billions in Minnesota alone.
Outlets like County Highway Magazine and City Journal had been reporting the story for months, but the stark visuals provided by Shirley proved the tipping point.
The infamous example that’s gone viral is the “Quality Learing Center,” which purported to be a learning center but forgot the “N” in its own signage. Oops. When Shirley arrived and confronted the folks on the premises, they refused to speak to him, and the state has since pulled its license to operate.
Another example is Creative Minds Daycare, which shut down in 2025 and reopened a day later as “Super Kids.”
Shirley also found a single building with four purported daycares inside. Minnesota Childcare Center and Nuna were across from each other in a single hallway, but no one on premises would engage his questions.
DAYCARE FUNDING EXPLAINED
The daycare programs highlighted by Shirley are funded by a mix of state and federal grants. At the federal level the Administration of Children and Families, a part of the Department of Health and Human Services, funds private daycare centers through its Childcare and Development Fund Program (CCDF).
Over the years, Open the Books has extensively documented federal grants administered by the Administration for Children and Families along with severe transparency issues like its long and inefficient Freedom of Information Act request pipeline. (Open the Books currently has an outstanding FOIA request with the agency dating back to May 2023.)
CCDF funds are distributed via block grant, meaning states receive the money and then have a lot of discretion on how they might be spent. Federal funds are typically co-mingled with state tax dollars to fund relevant state-designed programs. While block grants can be a great way to empower states to serve their citizens in a more tailored fashion, because dollars pass through more layers of bureaucracy, they are more difficult to track and audit.
These grants are what have drawn federal officials into the mix as federal tax dollars passed through Minnesota’s Department of Human Services to these fraudulent operations.
But daycare facilities, like any other entity, operate nationwide and can receive all manner of public support from state government, too. So, our research team has retrieved data in two ways:
We pulled agency spending from the top 10 states receiving CCDF grants
We searched our database nationwide for any recipients containing the term “daycare” in the name, covering all public spending categories
As a result, taxpayers can look for fraudulent use of CCDF funds and also search for potentially fraudulent daycares in every state that benefit from tax dollars across a range of programs (even those not directly related to childcare).
DATA FROM THE TOP 10 STATES
Open the Books analyzed the top ten state government recipients of CCDF funds over the past four fiscal years, which unsurprisingly coincide with the top ten most populous states, ranging from almost $3 billion (Michigan) to over $11 billion (Texas):
These federal funds flow to different agencies in each state but Open the Books has the most recently available spending data for each of them.
Our team has sorted the data by relevant state-level departments and, when possible, spending categories. The latest available year was chosen, which is noted as either 2024 or 2025. Some state agencies report fiscal years while others report calendar years.
Spreadsheets for each state:
Georgia, Department of Early Care and Learning, Fiscal Year 2024
North Carolina, Department of Health and Human Services, 2025
Pennsylvania, Department of Human Services, Fiscal Year 2024
Several of these states (Pennsylvania, Ohio, Florida, Texas, and Illinois) appear to have few or no daycare business contractors. This could be because the states emphasize the use of parent-directed vouchers to hold spaces at specific daycares rather than contracts. It’s also possible that the states give grants to local governments or nonprofits to then further distribute to daycare contractors.
The remaining states reveal a list of private entities ripe for the public to examine.
This exercise serves to highlight the inconsistencies in data reporting and the complexity of providing comprehensive oversight and accountability. It’s why we need to strengthen transparency laws at every level and make it happen in real time, before the fraud has insinuated itself so extensively spending programs.
THE MOTHER LODE
This story has become a political firestorm in part because it encompasses federal tax dollars, but also because it’s exposed the temerity of the perpetrators and reminds us of the scale and scope of cash that more would-be fraudsters could access. When cash is laying around essentially unguarded, human nature will take its course and the funds will be exploited.
So, we expanded our scope, too, searching for every entity in our database (federal, state and local) with the term “daycare” in its name.
The entire list is available here for download.
Let’s dive in together. We’re also calling on journalists around the country to use this as a starting point for enterprise reporting. It took far too long for Minnesota’s open secret to capture national attention.
NEXT STEPS IN WASHINGTON
In response to the scandal, ACF moved to reform the Child Care and Development Fund to make the program more resilient against fraud. A January 5, 2026 press release stated the agency will be rolling back provisions in the 2024 rules “that weakened oversight and increased the risk of waste, fraud and abuse in federally-funded state child care.”
The Biden rule allowed states to base payments on enrollment, rather than attendance numbers, pay childcare providers before services were rendered, and favored paying providers instead of providing parents their own vouchers.
The new Trump ACF rules will allow states to require payments based on attendance, rather than enrollments, and again allow states to pay providers after care is delivered. States will also be further encouraged to direct funds to voucher programs, rather than contracts steered towards pre-selected providers.
The Trump administration’s HHS additionally froze access to CCDF funds in California, Colorado, Illinois, Minnesota, and New York in response to concerns about fraud in state-administered programs. HHS also froze Temporary Assistance for Needy Families (TANF) and Social Services Block Grants (SSBG) to those states. TANF and SSBG also can be used on daycares, among many other social services. Access to these funds will be restricted until ACF determines states are in compliance with federal requirements, according to an agency press release.
While these are substantial improvements to safeguard spending, they come long after damage has been done. Again, it highlights the need for real-time transparency that is the core of the Open the Books mission.
HHS additionally launched a fraud reporting portal, called childcare.gov, to allow public reporting on suspected program misuse. At Open the Books, we have the data that can help fill that portal. Let’s not wait another moment or waste another dollar we could save. Every dollar spent fraudulently is a dollar not available to a family that needs the help.
Where in hell were worthless leftist MSM? All complicit in crime.
Zionists and Marxists are destroying the west using unconventional warfare. Us paying for our own invasions is the most ridiculous scam, and we will go down in history as the biggest fools ever.