HHS probes Minnesota's use of billions in federal social service funds amid fraud concerns: report

The Department of Health and Human Services (HHS) has launched a review into how Minnesota used billions of dollars in federal social service funding, requesting detailed records from Gov. Tim Walz’s administration and other state entities after reports raised questions about whether portions of the money were misused, according to letters first obtained by the New York Post.

The letters were sent Monday by Alex Adams, assistant secretary for the Administration for Children and Families, to Walz, Minneapolis Mayor Jacob Frey and a nonprofit involved in administering Head Start programs, the Post reported.

According to the Post, Adams said HHS is attempting to determine whether federal safety-net funds were diverted or mismanaged and whether such misuse might have “been used to fuel illegal and mass migration” into Minnesota.

Adams told the outlet the review is focused on “accountability for American taxpayers” and on ensuring federal benefit programs were not compromised.

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The Post reported that Minnesota received more than $8.6 billion in ACF funding between fiscal years 2019 and 2025 through more than 1,000 federal grants. In fiscal year 2025 alone, the state received over $690 million for safety-net programs under President Biden, according to federal spending records reviewed by the Post.

In the letters, Adams requested what the Post described as a “comprehensive list” of all state entities that received ACF funding during that period, along with detailed administrative data. The information sought includes recipient names, addresses, dates of birth and, where applicable, Social Security numbers and immigration A-numbers, the Post reported.

Adams told the Post that HHS has “legitimate reason to think that they’ve been using taxpayer dollars incorrectly,” citing recent fraud investigations and allegations involving Minnesota’s Department of Human Services. According to the Post, the letters referenced public statements from hundreds of DHS employees alleging warnings of fraud were disregarded and whistleblowers faced retaliation.

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The review comes amid heightened scrutiny of Minnesota’s handling of federal funds following multiple high-profile fraud cases. Federal prosecutors have charged dozens of individuals in connection with the Feeding Our Future scheme, in which more than $250 million intended for child nutrition programs was diverted for luxury purchases and real estate. Many of those charged had ties to nonprofits serving Minnesota’s Somali community.

The Post also cited Pew Research Center data showing Minnesota’s unauthorized migrant population increased by roughly 40,000 people between 2019 and 2023, reaching an estimated 130,000 residents, or about 2% of the state’s population.

According to the Post, the ACF review includes several major federal programs, including the Community Services Block Grant, Social Services Block Grant, Low-Income Home Energy Assistance Program, Title IV-E Foster Care, Refugee Cash and Medical Assistance, the Child Care and Development Fund, and Parents in Community Action, a Head Start grantee.

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“The Trump Administration has made clear its commitment to rooting out fraud, protecting taxpayer dollars, and ensuring program integrity across all federal benefit programs,” Adams wrote in the letters, according to the Post. “This information is necessary for ACF to conduct a thorough review of program operations and to assess the extent of any irregularities that may have occurred.”

Fox News Digital reached out to Gov. Walz, Mayor Jacob Frey and HHS for comment but did not receive an immediate response.