The Department of Health and Human Services has frozen all federal payments to child care centers in Minnesota, implementing nationwide requirements for providers seeking government funds. The move follows allegations that the state funneled millions of taxpayer dollars to fraudulent daycare facilities over the past decade, uncovered by YouTuber Nick Shirley.

Two HHS officials detailed the action in a video shared on X: “We have frozen all child care payments to the state of Minnesota. Today we have taken three actions against the blatant fraud that appears to be rampant in Minnesota and across the country.” The measures include activating a system requiring justification and evidence for all federal childcare payments, demanding a comprehensive audit from Minnesota Governor Tim Walz of suspected fraudulent centers, and launching a dedicated fraud-reporting hotline at childcare.gov.

Minnesota Governor Tim Walz has denied wrongdoing, with his office stating the governor “has been combatting fraud for years” and labeling the administration’s actions “a transparent attempt to politicize the issue to hurt Minnesotans.” The HHS announcement directly references Shirley’s investigation as the catalyst for the measures, calling it “the Nick Shirley effect.”