Texas Gov. Greg Abbott is directing state agencies to investigate potential child care funding fraud, following a national scandal in Minnesota.

 "Recently, the Trump Administration and independent journalists have uncovered potential systematic fraud in subsidized child care systems in states like Minnesota," said Abbott. "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." 

The Texas Workforce Commission (TWC), in collaboration with the Health and Human Services Commission (HHSC), will further implement anti-fraud measures and launch investigations into any potential fraud and misdirection of taxpayer dollars, the governor's office said.   

Abbott has directed the commissions to:

• Identify high-risk providers who participate in the Child Care Services Program and conduct additional site visits
• Review current data collection efforts related to the Child Care Services Program and ensure TWC and Local Workforce Development Boards are taking all possible steps to prevent, detect, and eliminate fraudulent activity within the program
• Ensure that all providers participating in the Child Care Services Program are accurately and verifiably reporting the number of children enrolled
• Conduct reviews of Child Care Services Program oversight processes for Local Workforce Development Boards to verify standards of the program are uniformly upheld 
• Enhance access to their online portal and hotline, so Texans can easily report instances of fraud in Texas' childcare system

Abbott said TWC and HHSC will provide progress reports on Jan. 30 and final reports on Feb. 27.

This comes as national attention focuses on the growing fraud scandal in Minnesota, which federal prosecutors estimate could top $9 billion. 

"Schemes like the ones uncovered in Minnesota harm taxpayers as well as other families and children waiting to participate in the Child Care Services Program. Waste, fraud, and abuse of taxpayer dollars will not be tolerated and will be punished to the fullest extent of the law in Texas," Abbott stated in his letter to TWC and HHSC.

Fraud claims against day care centers in Minnesota

Just before New Year's, a viral social media video by YouTuber Nick Shirley, amplified by Elon Musk, Vice President J.D. Vance and Attorney General Pam Bondi, pushed the fraud story into the center of the national conversation, stoking a scandal that has been brewing for years. 

Shirley drew tens of millions of views when he posted a video that showed him visiting federally supported child care centers around Minneapolis and finding no children present. He alleged nearly a dozen day care centers were not actually providing any service and suggested owners were pocketing the taxpayer funds. 

CBS News conducted its own analysis and visited several of the day care centers mentioned by Shirley: all but two have active licenses, according to state records, and all active locations were visited by state regulators within the last six months. One was subjected to an unannounced inspection as recently as Dec. 4. CBS News' review found dozens of citations related to safety, cleanliness, equipment and staff training, but there was no recorded evidence of fraud. Another day care shared security footage of people dropping off young children, the same day that Shirley arrived and claimed the day care was empty.

Minnesota's Office of Inspector General carried out on-site compliance checks at nine of the centers and confirmed they were "operating as expected," officials said Jan. 2. Eight of the centers had children present, and one had not opened yet when it was inspected, the state said.

In the wake of the video, the Trump administration announced it is pausing federal funding to child care in Minnesota, with President Trump calling Minnesota a "hub of fraudulent money laundering activity." 

The U.S. Department of Health and Human Services also announced sweeping changes to how all states must submit claims for Medicaid-supported daycares, including requiring "a justification and a receipt or photo evidence before we send money to a state."