After Minnesota Scandal, Abbott Orders Statewide Review For Fraud In Texas Childcare Subsidies

In a decisive move to safeguard state and federal resources, Texas Republican Governor Greg Abbott has launched a comprehensive investigation into potential systemic fraud within the Lone Star State’s subsidized childcare systems. This action, initiated via a formal letter on Monday, directs the Texas Workforce Commission (TWC) and the Health and Human Services Commission (HHSC) to proactively identify and eliminate the misuse of taxpayer funds.

Abbott’s directive was prompted by alarming reports of alleged widespread fraud in Minnesota, where federal investigations recently uncovered reported significant “ghost billing” schemes. At the end of December, the Department of Health and Human Services announced it was ending federal taxpayer funding for “child care payments” to Minnesota. While Abbott noted that Texas currently maintains a remarkably low improper payment rate of 0.43 percent—far below Minnesota’s 11 percent—he emphasized that Texas must take aggressive steps to prevent similar vulnerabilities from being exploited. He framed the initiative as both a moral and fiscal necessity, stating that fraud directly harms the families and children currently on waitlists for the Child Care Services Program.

The governor’s mandate outlines several specific executive actions for state agencies. First, he ordered the identification of “high-risk” providers who will be subjected to additional unannounced site visits to verify compliance with state and federal regulations. Abbott also directed a rigorous review of data collection to ensure enrollment numbers are reported accurately and verifiably. To ensure statewide consistency, he directed a review of the oversight processes used by Local Workforce Development Boards and mandated corrective actions or additional training for any boards that failed to meet his standards.

Furthermore, Abbott is prioritizing public involvement and legal accountability. He ordered enhancements to the state’s online portals and hotlines to make it easier for Texans to report suspicious activity. Crucially, the governor instructed agencies to refer all completed fraud investigations directly to state or federal prosecutors, signaling a “zero-tolerance” policy. “Waste, fraud, and abuse of taxpayer dollars will not be tolerated and will be punished to the fullest extent of the law in Texas,” he wrote.

Governor Abbott’s actions align with broader federal efforts, as the Trump administration recently paused childcare funding for all states until they can demonstrate legitimate spending. By taking the lead on this investigation, Abbott aims to protect the integrity of the Texas Child Care Services Program and ensure that state dollars are used exclusively for their intended purpose: the well-being and success of Texas families. The governor has demanded a progress report by January 30, 2026, with a final comprehensive report due on February 27.