Abbott Launches Statewide Fraud Review of Texas Childcare Programs Following Minnesota Scandal

Texas Governor Greg Abbott is taking no chances in the wake of the Minnesota daycare fraud scandal. In a sweeping new directive issued Monday, the Republican governor ordered a full-scale investigation into potential fraud within Texas’ subsidized childcare system — a move aimed at protecting both state and federal tax dollars from abuse.

The order, sent to the Texas Workforce Commission (TWC) and the Health and Human Services Commission (HHSC), comes just weeks after the Trump administration halted all federal childcare funding to Minnesota amid reports of massive “ghost billing” fraud. Investigators believe corrupt providers stole millions by billing the government for services never rendered — triggering a nationwide reckoning.

Texas, Abbott made clear, is not waiting to become the next cautionary tale.

“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 wrote in his letter, emphasizing that even though Texas has a low improper payment rate — currently at just 0.43% compared to Minnesota’s 11% — that’s no reason for complacency.

Abbott’s plan includes a series of aggressive accountability measures:

• Targeting high-risk providers for unannounced inspections.

• Auditing enrollment data to verify accuracy and eliminate padded rolls.

• Overhauling oversight procedures across all Local Workforce Development Boards.

• Strengthening public fraud-reporting tools, including upgraded hotlines and online portals.

• Mandating referrals to prosecutors for any confirmed cases of fraud.

The governor’s message is clear: if you’re cheating the system, your time is up.

This crackdown follows the Trump administration’s broader freeze on federal childcare payments to every state, pending proof of proper fund usage. That unprecedented move put states on notice — and Abbott’s action positions Texas as a national leader in cleanup and reform.

The Texas Child Care Services Program provides financial assistance to low-income families so parents can work or attend school. With more families on waiting lists than ever before, Abbott noted that fraud doesn’t just waste money — it actively harms real children who are denied access while bad actors cash in.

Abbott has demanded a progress report by January 30, 2026, and a full statewide review submitted by February 27. Insiders say his goal is to demonstrate to the Trump administration that Texas runs a tight ship — and to show voters that conservative leadership means real accountability.

While other states look the other way, Abbott is tightening the screws. Texas won’t be the next Minnesota — not on his watch.