Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. announced Monday that the department has repealed Biden-era regulations requiring states to pay childcare providers before verifying attendance or delivering services, Breitbart reports.
“Congress appropriated this funding to support working families and ensure children have safe places to grow and learn,” Secretary Kennedy explained in a written statement. “Loopholes and fraud diverted that money to bad actors instead. Today, we are correcting that failure and returning these funds to the working families they were meant to serve.”
According to Breitbart, the Trump administration’s HHS will reinstate key oversight measures by rolling back portions of the Biden-era Child Care and Development Fund rule that weakened accountability and “increased the risk of waste, fraud, and abuse” in federally funded childcare programs—an issue highlighted by ongoing investigations in Minnesota.
Under the new policy, HHS will restore attendance-based billing, allowing states to base provider payments on verified attendance rather than enrollment. States will also be allowed to make payments only after services have been provided. In addition, the department will restore parental choice by reintroducing parent-directed vouchers that let families choose their childcare providers directly.
“Paying providers upfront based on paper enrollment instead of actual attendance invites abuse,” said Deputy Secretary Jim O’Neill. “In Minnesota, we’ve seen credible and widespread allegations of fraudulent daycare providers who were not caring for children at all. The reforms we are enacting will make fraud harder to perpetrate.”
Reports suggest that some groups in Minnesota—including Somali networks—have engaged in multimillion-dollar fraud schemes tied to daycare operations. The controversy has grown so significant that Governor Tim Walz (D-MN) has reportedly chosen not to seek reelection amid the fallout.
Assistant Secretary for Family Support Alex Adams emphasized that strong oversight is needed in child care programs to prevent fraud and ensure accountability. He explained that families and taxpayers deserve verification that children are genuinely receiving services, noting that the new rules strengthen transparency and highlight the vital role federal child care funding plays in supporting the U.S. workforce.