Abbott orders comprehensive fraud probe into Texas child care funding after Minnesota scandal

Gov. Greg Abbott sent a letter Monday directing Texas state agencies to investigate potential child care funding fraud, following a major Minnesota social services scandal that cost taxpayers millions.

“Recently, the Trump Administration and independent journalists have uncovered potential systematic fraud in subsidized child care systems in states like Minnesota,” Abbott said in a statement. “Such fraud will never be tolerated in Texas. Today, I directed Texas state agencies to take proactive steps to prevent, detect, and eliminate misuse of taxpayer funds to protect the integrity of Texas’ Child Care Services Program.” 

Abbott’s letter was addressed to Texas Workforce Commission (TWC) Chairman Jose Esparza and Texas Health and Human Services Commission (HHSC) Executive Commissioner Stephanie Muth to lead the investigation. Both agencies have broad authority to strengthen fraud prevention efforts in the state’s child care program and regulate facilities.

The agencies will have until Feb. 27 to submit a final report outlining how they implemented anti-fraud measures and investigated any potential misuse of Texas taxpayer dollars.

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Abbott noted that Texas already has a relatively low “improper payment rate” of 0.43 percent, compared with Minnesota’s roughly 11 percent, thanks to the agencies’ strong anti-fraud processes already in place.

While the agencies already conduct routine audits of providers and in-person visits to facilities, “more can be done to protect Texas children and taxpayers,” Abbott said in the letter.

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HHSC and TWC will provide a progress report to the governor’s office on Jan. 30, followed by a final report in late February.

“I will continue to work with executive branch agencies to fight fraud, protect taxpayer dollars, and promote accessible, affordable, high-quality childcare for Texans,” Abbott added.

The move comes just hours after Minnesota Gov. Tim Walz announced that he is suspending his reelection campaign amid allegations that the state attempted to cover up widespread fraud in his state’s social programs. 

The scandal, which emerged in early December, involved individuals from the Somali-American community accused of defrauding public aid programs.

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While the schemes began with the Feeding Our Future case, which reportedly exploited a federally-funded child nutrition program during the pandemic, investigators have since uncovered what they describe as a web of interconnected fraud spanning multiple sectors, including child care, Medicaid, housing and autism services.