Minnesota Governor Tim Walz Defends Fraud Oversight Amid Viral Daycare Investigation
MINNEAPOLIS, Minn. — Minnesota Governor Tim Walz has firmly rejected allegations of widespread fraud in the state’s childcare programs following the circulation of a viral video by independent journalist Nick Shirley that raised questions about the legitimacy of several daycare facilities in Minneapolis. The video, which has attracted significant public attention, shows visits to multiple childcare centers, including one that reportedly received approximately $4 million in state funding despite appearing largely inactive and displaying a misspelled sign reading “Quality Learing Center.”
Shirley’s 42-minute exposé, posted on social media platforms including X and YouTube, highlights concerns about the oversight of state-funded childcare programs. During an appearance on Fox News’ “The Big Weekend Show,” Shirley asserted that the alleged fraud was so apparent that “a kindergartner could figure out that there is fraud going on.” He also suggested that some journalists might avoid similar investigations due to fears of being labeled “Islamophobic” or “racist,” emphasizing that “fraud is fraud” and taxpayers deserve accountability.
In response, a spokesperson for Governor Walz underscored the administration’s longstanding commitment to combating fraud in state programs. “The governor has worked for years to crack down on fraud and ask the state legislature for more authority to take aggressive action,” the spokesperson said. The administration has strengthened oversight measures, including launching investigations into the specific facilities featured in Shirley’s video, one of which has already been closed.
Further steps taken by Walz’s office include hiring an independent firm to audit payments to high-risk programs, shutting down the Housing Stabilization Services program entirely, appointing a new statewide program integrity director, and supporting criminal prosecutions where warranted. These efforts are part of a broader push to enhance program integrity and protect taxpayer dollars.
The scrutiny of Minnesota’s childcare centers comes amid a broader context of fraud investigations in the state. Earlier in 2025, lawmakers probed Small Business Administration loans linked to a $9 billion fraud scandal in Minnesota, highlighting concerns about “reckless decision making” and the need for tighter controls. The FBI has also surged resources into the state to investigate fraud schemes, with Director Christopher Wray describing a $250 million fraud case as “the tip of a very large iceberg.”
Governor Walz’s testimony before the House Oversight and Accountability Committee in June 2025 reflected the administration’s awareness of these challenges and its intent to address them. The ongoing investigations and reforms aim to restore public trust and ensure that state funds are used appropriately.
For more information on Minnesota’s efforts to combat fraud, see the Minnesota Office of the Inspector General and the FBI Minneapolis Field Office. Additionally, the House Oversight and Accountability Committee continues to monitor fraud-related issues nationwide. The Small Business Administration Office of Inspector General also provides updates on fraud investigations related to SBA loans.
As the debate over fraud in Minnesota’s childcare system continues, Governor Walz’s administration maintains that it is taking decisive action to protect public funds and improve transparency, even as independent journalists and lawmakers press for further accountability.
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