Colorado was swept up in a $10 billion federal child care funding freeze announced on Monday by the Trump administration, a move state officials said they learned about through media reports.

The Trump administration said it would freeze child care funding for four states, including Colorado, citing reports of widespread fraud at child care centers in Minnesota.

The announcement came the same day that Minnesota Gov. Tim Walz said he would not seek a third term, following weeks of reporting on the alleged fraud.

According to the New York Post, which first reported the funding freeze, the U.S. Department of Health and Human Services plans to withhold money from the Child Care Development Fund, the Temporary Assistance for Needy Families program, and the Social Services Block Grant program.

It remains unclear why Colorado was included in the freeze. The Colorado Department of Human Services told Colorado Politics it had not been notified by the federal government as of Tuesday morning and learned of the action through media reports.

“The Colorado Department of Human Services has seen the news reports regarding the federal funding freeze to key social support programs,” said Haysel Hernandez, the department’s deputy director of communications. “The federal government has not yet notified CDHS of any changes to these funding sources. These resources support Colorado families in need and help them access job training, financial support, child care, and other critical social services on the road to self-sufficiency. Should these funding sources change, we remain committed to supporting families in Colorado and will continue to advocate for the programs and services they need to thrive.”

Colorado receives $135.6 million in block grant funding annually, along with an additional $16.1 million in contingency funding, according to the Colorado Department of Human Services. In December, more than 14,000 Colorado families received assistance through these programs.

Eric Maruyama, a spokesperson for Gov. Jared Polis, said, “Beyond reports in the media, the state has not been officially notified of any changes to these funding sources. These resources support families in need and help them access food and much more. If true, it would be awful to see the federal government targeting the most needy families and children this way.” 

Colorado Attorney General Phil Weiser told Colorado Politics he was surprised by the funding freeze, noting that there is no widespread fraud among Colorado child care centers.

“(This) is another appalling, irresponsible and dangerous attack that’s going to harm kids and kids who need this the most,” Weiser said. “The idea that kids are going to go hungry, kids are going to go not cared for, is heartless, and I don’t expect them to have any legal justification for it. A lot of these moves are made purely out of a lack of concern for people and playing political games with people’s lives.”

Besides Colorado, the Trump administration froze funds in California, Illinois, Minnesota and New York. The freeze could last months, with the U.S. Department of Health and Human Services announcing significant changes to the program. Another $869 million from the Social Services Block Grant coffers is being kept from all five states, as well.

In a news release on Monday, the U.S. Department of Health and Human Services announced it would be closing Biden-era loopholes that allowed states to pay child care providers without counting attendance.

The change will “roll back provisions in the 2024 Child Care and Development Fund rule that weakened oversight and increased the risk of waste, fraud and abuse in federally-funded state child care – including programs now under investigation in Minnesota,” the department said.

“Congress appropriated this funding to support working families and ensure children have safe places to grow and learn,” said Health and Human Services Secretary Robert F. Kennedy, Jr. in the announcement. “Loopholes and fraud diverted that money to bad actors instead. Today, we are correcting that failure and returning these funds to the working families they were meant to serve.”

The new rules announced by the U.S. Department of Health and Human Services included:

• Attendance-based billing will be restored. States may require payment based on verified attendance, rather than enrollment alone.

• Upfront payments will no longer be required. States may again pay providers after care is delivered.

• Voucher flexibility will return. States are no longer steered toward contracts over parent-directed vouchers, restoring parental choice.

“Paying providers upfront based on paper enrollment instead of actual attendance invites abuse,” said Health and Human Services Deputy Secretary Jim O’Neill. “In Minnesota, we’ve seen credible and widespread allegations of fraudulent daycare providers who were not caring for children at all. The reforms we are enacting will make fraud harder to perpetrate.”

Minnesota has been under the spotlight for years for Medicaid fraud, including a massive $300 million pandemic fraud case involving the nonprofit Feeding Our Future. Prosecutors said it was the country’s largest COVID-19-related fraud scam and that defendants exploited a state-run, federally funded program intended to provide food for children.

In 2022, during President Joe Biden’s administration, 47 people were charged. The number of defendants has grown to 78 throughout the ongoing investigation.

So far, 57 people have been convicted, either because they pleaded guilty or lost at trial.

Most of the defendants are of Somali descent.

Numerous other fraud cases are being investigated, including new allegations focused on child care centers.

In news interviews and press releases over the summer, prosecutor Joe Thompson estimated the total loss from all fraud cases could exceed $1 billion. Earlier this month, a federal prosecutor alleged that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen.

The Associated Press contributed to this article.