Chapter 1 of 7 · 2011–2019

Daycare Fraud Beginnings

An investigator warned in writing in 2017. In 2019 the unit that was catching the fraud was shut down.

Scott Stillman, former DHS forensics supervisor, to the House Fraud Committee, March 23, 2026 · full record

Source: Minnesota House of Representatives, Public Information Services · original. Played here unaltered except as noted on this page; rights remain with the publisher.

In one minute

  1. In 2017, 42 of the 50 highest-paid child-care centers had red flags for fraud, the former head of DHS's child-care investigations unit told the committee. report p. 14
  2. DHS's own consultant first put child-care subsidy fraud at $105 million. After DHS reviewed the draft, the estimate came down. report p. 17
  3. The Legislative Auditor's 2019 review could not confirm $100 million a year, but said fraud was more than the $5 to $6 million prosecutors had proved. report p. 17
  4. Instead of building on the unit's work, the Walz administration closed the criminal investigation unit. Cases became "overpayments" for a committee to review. report p. 15
  5. From 2020 through 2025 the state's child-care investigators sent 25 cases to law enforcement. Two ended in a criminal conviction. Minnesota Department of Children, Youth, and Families, committee document
“It is clear that the Dayton and Walz Administrations knew about the childcare fraud and tried to cover it up.”
Committee majority report, p. 21
“Implementing a Continuous Improvement Program (CIP) for the unit that required DEI and cultural sensitivity training (thinly veiled accusations of racism against the unit).”
Committee majority report, p. 15

From the committee's own documents

DCYF slide 'CCAP and Early & Often Investigations Summary by Calendar Year', 2019-2026 YTD: cases opened 95, 240, 60, 176, 123, 99, 149, 189 (2026 YTD); administrative sanctions 21 to 107 a year; referrals to law enforcement 0-11 a year; criminal convictions 2 (2019), 1 (2021), 1 (2024).
DCYF slide 'CCAP and Early & Often Investigations Summary by Calendar Year', 2019-2026 YTD: cases opened 95, 240, 60, 176, 123, 99, 149, 189 (2026 YTD); administrative sanctions 21 to 107 a year; referrals to law enforcement 0-11 a year; criminal convictions 2 (2019), 1 (2021), 1 (2024).Minnesota Department of Children, Youth, and Families (Tikki Brown, Commissioner; Randy Keys, Inspector General) · House Fraud Committee hearing of 2026-04-28 · DCYF Presentation Child Care Assistance Program.pdf, p. 14
OLA Exhibit 1.2 (2019 CCAP report): Minnesota map of Child Care Assistance Program providers, capacity and payments by region, FY2018 - Metro 1,468 providers, 69,650 capacity, $210,688,000 total payments, far ahead of every other region (next highest Southeast $15,210,000 and East Central $12,629,000).
OLA Exhibit 1.2 (2019 CCAP report): Minnesota map of Child Care Assistance Program providers, capacity and payments by region, FY2018 - Metro 1,468 providers, 69,650 capacity, $210,688,000 total payments, far ahead of every other region (next highest Southeast $15,210,000 and East Central $12,629,000).Office of the Legislative Auditor (OLA) · House Fraud Committee hearing of 2026-04-28 · OLA April 2019 Report CCAP.pdf, p. 11

Go deeper

Scott Stillman: the 2017 warningHis emails, his 2018 Senate testimony, and his return under oath in 2026, with the full transcript.Report: Child Care Assistance ProgramPages 13–21, searchable.

People

Scott StillmanJay SwansonCarolyn HamOffice of the Legislative Auditor (Nobles, then Randall)Jeff BaillonSteve HalickiJodi Harpstead

The record for this chapter