The Department of Health and Human Services (HHS) has opened a sweeping review into how Minnesota used billions of dollars in federal social-service funds, demanding extensive records from Democrat Gov. Tim Walz’s administration and other state entities after mounting reports of potential misuse.
The move follows a series of major fraud scandals that have already rocked the state’s welfare system.
Letters sent Monday by Alex Adams, assistant secretary for the Administration for Children and Families (ACF), to Walz, Minneapolis Mayor Jacob Frey, and a nonprofit that administers Head Start programs outline federal concerns that money may have been mishandled, according to documents first obtained by the New York Post.
Adams wrote that HHS is working to determine whether federal safety-net funds were diverted or mismanaged and whether any of the alleged misuse may have “been used to fuel illegal and mass migration” into Minnesota.
He told the Post the review is centered on “accountability for American taxpayers” and ensuring the integrity of federal benefit programs.
Billions in Federal Funding Now Under the Microscope
According to the Post, Minnesota received more than $8.6 billion in ACF funding from 2019 through 2025 across more than 1,000 federal grants.
In fiscal year 2025 alone, the state received over $690 million for social-service programs under President Biden.
The letters reportedly request a “comprehensive list” of every state entity that received ACF money, as well as detailed administrative data for each recipient, including names, dates of birth, addresses, and, when applicable, Social Security numbers and immigration A-numbers.
Adams told the outlet that HHS has “legitimate reason to think that they’ve been using taxpayer dollars incorrectly,” citing ongoing fraud investigations within the Minnesota Department of Human Services.
The letters also reference accounts from DHS employees who claim warnings of fraud were ignored while whistleblowers faced retaliation.
A State Already Mired in Fraud Scandals
The review comes amid sustained scrutiny into Minnesota’s management of federal dollars, much of it linked to the Feeding Our Future investigation, one of the largest welfare-fraud schemes in U.S. history.
Federal prosecutors have charged dozens of individuals for diverting more than $250 million intended for child-nutrition programs toward luxury purchases, property, and personal enrichment.
Many defendants were affiliated with nonprofits serving Minnesota’s Somali community.
Meanwhile, Census-based estimates cited by the Post show Minnesota’s unauthorized migrant population increased by roughly 40,000 people between 2019 and 2023, reaching about 130,000 residents, or 2% of the state’s population.
Multiple Federal Programs Included in the Review
The ACF inquiry reportedly spans several major welfare programs, including:
• Community Services Block Grant
• Social Services Block Grant
• Low-Income Home Energy Assistance Program
• Title IV-E Foster Care
• Refugee Cash and Medical Assistance
• Child Care and Development Fund
• Parents in Community Action (Head Start grantee)
In the letters, Adams emphasized the administration’s priorities:
“The Trump Administration has made clear its commitment to rooting out fraud, protecting taxpayer dollars, and ensuring program integrity across all federal benefit programs.
“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.”
The review marks one of the most aggressive federal examinations of Minnesota’s welfare system in years and raises new questions about oversight failures under Walz’s leadership as lawmakers brace for additional findings.
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