Minnesota legislative auditor is launching an investigation into
allegations that some child care providers are defrauding the state’s
publicly funded child-subsidy program with excess billings.
auditor’s office, an independent, nonpartisan arm of the Legislature,
will explore the scope of the alleged fraud and the internal controls in
the Minnesota Department of Human Services (DHS), which oversees the
very serious,” Legislative Auditor James Nobles said in an interview
Friday. “The allegation is that the fraud is much bigger than previously
thought, and that money … derived from the fraud is being used for
international terrorism, which gets people’s attention.”
responding to a television news report suggesting widespread fraud in
the Child Care Assistance Program, or CCAP, which subsidizes the
child-care expenses of nearly 30,000 low-income children per month.
The Fox 9 report
alleged that Minnesota refugee families are taking suitcases full of
cash on flights from the Minneapolis-St. Paul International Airport to
Somalia and Middle Eastern nations where terrorist groups are active.
said his investigation will focus on the day-care fraud allegations —
not whether public money wound up in the hands of terrorist groups,
which he said falls within the jurisdiction of federal authorities.
TV report appeared Sunday, Nobles said, several legislators contacted
his office and asked him to investigate. He said the investigation could
begin as early as next month and could take several months.
Human Services Commissioner Chuck Johnson said the agency welcomed the
review and would work closely with Nobles and his staff. Fraud in the
CCAP is particularly egregious, “because in addition to exploitation of
taxpayer funds, it harms the children and families the program is
intended to help,” he said in a written statement Friday.
intensified its investigations of child-care fraud, based in part on
reports that providers were exploiting parents and their children to
overbill the state. Since forming a special child-care fraud unit in
2012, the agency has closed 13 child-care centers while producing six
felony convictions and court orders for more than $4.6 million in
restitution, the agency said. Currently, the agency has 10 active
investigations into alleged fraud.
Rush to judgment?
legislators last week moved with great speed on the issue, introducing
legislation that would enable DHS to close child-care businesses that
participate in the subsidy program but fail to cooperate with
investigators. It would also create new criminal and civil penalties for
anyone who transferred fraudulently obtained money to countries on the
U.S. State Department’s travel ban list, among other provisions.
addition, Sens. Jim Abeler, R-Anoka, and Michelle Benson, R-Ham Lake,
have proposed creating a new state agency to investigate fraud in social
service programs. They envision combining oversight functions currently
housed at several different agencies, including the DHS Inspector
General and the Department of Health.
same time, some DFL lawmakers and Somali-American leaders have
questioned the rush to pass major reforms in the final days of the
legislative session, largely based on a single news report.
narrative has suddenly become that there is a massive failure of our
oversight system,” said Sen. Matt Klein, DFL-Mendota Heights. “That
really seems like a premature conclusion — and beneath the dignity of
Hussein, executive director of CAIR Minnesota, a Muslim civil rights
group, and members of the Somali-American business community lashed out
at lawmakers Friday, accusing some Republicans of using “fearful,
anti-Muslim rhetoric” for political gain at a news conference.
pointed out that state regulators and federal law enforcement officials
have yet to establish any link between Minnesota child-care operators
and overseas terrorist groups. They also noted that traveling Somalis
often have no choice but to carry cash through airports because they are
traveling to countries that do not have functioning, regulated banking
“This is a
cynical attempt to use African immigrant and Muslim communities as a
political football in the final days of the legislative session,”
Hussein said. “It’s easy to claim that Muslims are dishonest and
dangerous, but it’s something we have to push back against.”
who called an emergency hearing this week to explore the issue, insisted
that legislators’ motives were grounded in a sincere effort to root out
fraud in public programs. “It’s all about the fraud,” he said. “It’s
not Islamophobia. It’s fraudophobia.”