Updated 3:45 p.m. | Posted 9:24 a.m.
While fraud is happening in the state's Child Care Assistance Program, it is unclear how much, and there's no evidence the subsidies are going to terrorists, Minnesota's legislative auditor said Wednesday.
The agency began investigating the program, which helps low-income families afford child care, after Fox 9 news stories last year raised questions of wrongdoing, claiming fraud topped $100 million annually.
The coverage included a former Department of Human Services employee alleging child care aid subsidies were funding terror groups overseas.
The auditor's report said it was unable to substantiate that claim. It also said it did not find evidence of the $100 million claim, but added the fraud likely exceeds the $5 million to $6 million that prosecutors have so far been able to prove.
While fraud in the program is a known problem, "we couldn't find evidence to substantiate that there is $100 million in fraud in CCAP every year," Legislative Auditor Jim Nobles told lawmakers following the report's release.
"In fact, we couldn't really find a reasonable estimate of fraud," he added. "We don't have one, the department doesn't have one."
Nobles explained that a department investigator came up with the $100 million figure by lumping all of the money received by suspect providers as fraud.
"We believe that there are some facts, but there are also some significant assumptions to reach the allegations," he said. "Some of those assumptions we believe are reasonable, and some are questionable."
Human Services Commissioner Tony Lourey said that any misuse of taxpayer dollars will not be tolerated and the state will root out fraud from the child care aid program.
Some 30,000 children and 13,000 families "rely on the program every day, and there are still nearly 2,000 more families on the waiting list," Lourey said. "Ensuring that this program is running effectively is essential to the well-being of all Minnesota families."
In 2018, the program paid subsidies of $254 million with money from federal, state and county taxpayers.
Republican legislative leaders seized on the report's confirmation that there is fraud in the program and demanded the executive branch crack down.
"Minnesotans are generous people, but they expect government to be accountable to them," said Republican Senate Majority Leader Paul Gazelka, R-Nisswa.
At a press conference preceding an afternoon hearing on the report, Mohamed Omar, executive director of the Dar Al-Farooq Islamic Center, criticized Republican legislators "who perpetuated this rumor irresponsibly fed Islamophobia and hatred that leaves us vulnerable to harassment and attacks every day."
The report also highlighted a "serious rift" between the Department of Human Services inspector general and Child Care Assistance Program investigators over the fraud issue. It recommends the Legislature create a new inspector general position that is independent of DHS managers.
The unproven allegation made in the Fox 9 reporting about child care subsidies funding terrorism was specific to Somali-American child care providers sending money back to Somalia.
Rep. Tina Liebling, DFL-Rochester, suggested Wednesday that the claim was a smear.
"We need to be very careful when we start accusing people and accusing entire communities really of being less than concerned about where our public money is going," she said.