Minnesota Governor Tim Walz’s administration is defending itself against fraud allegations following a viral video that exposed questionable childcare centers allegedly receiving millions in state funding despite showing little to no activity.

The controversy erupted after independent journalist Nick Shirley released a 42-minute documentary on Friday showing visits to several daycare centers across Minnesota, including one Minneapolis facility that reportedly received approximately $4 million in state funds. The center, which displayed a misspelled sign reading “Quality Learing Center,” appeared largely inactive despite supposedly serving 99 children.

A spokesperson for Governor Walz responded to inquiries about the allegations by emphasizing the administration’s efforts to combat fraud. “The governor has worked for years to crack down on fraud and ask the state legislature for more authority to take aggressive action,” the spokesperson told Fox News. “He has strengthened oversight — including launching investigations into these specific facilities, one of which was already closed.”

The governor’s office added that Walz has implemented several measures to address potential fraud, including hiring an external firm to audit payments to high-risk programs, shutting down the Housing Stabilization Services program, appointing a statewide program integrity director, and supporting criminal prosecutions.

During a Sunday appearance on Fox News’ “The Big Weekend Show,” Shirley claimed the fraud in Minnesota was “so obvious” that even “a kindergartner could figure out that there is fraud going on.” He suggested other journalists might be reluctant to pursue similar investigations out of fear of being labeled “Islamophobic” or “racist.”

The allegations come amid growing concerns about widespread fraud in Minnesota’s social services programs. The state has been grappling with what officials describe as a burgeoning scandal involving at least $1 billion allegedly lost to social services fraud, much of it reportedly connected to the Somali community in the Twin Cities area.

The video has sparked significant backlash from prominent political figures. Vice President JD Vance, Rep. Mike Lawler (R-N.Y.), Donald Trump Jr., and Elon Musk have all publicly criticized Walz’s administration over the allegations. The White House also shared a post from Education Secretary Linda McMahon, who described the situation as a “breathtaking failure that has happened under the watch” of Governor Walz.

In response to the growing concerns, FBI Director Kash Patel announced that the agency has increased personnel and investigative resources in Minnesota as part of ongoing efforts to “dismantle large-scale fraud schemes exploiting federal programs.” This escalation signals the seriousness with which federal authorities are treating the allegations.

The childcare center highlighted in Shirley’s video has become a particular focus of the controversy. The facility’s apparent inactivity, despite its reported state funding, has raised questions about oversight and accountability in Minnesota’s childcare subsidy program.

The fraud allegations represent a significant political challenge for Walz’s administration, which is now facing intensified scrutiny over its management of state funds and social service programs. Critics argue that the apparent ease with which Shirley was able to document suspicious facilities points to systemic failures in oversight and verification processes.

As investigations continue, the controversy highlights broader concerns about potential vulnerabilities in social service funding mechanisms and the challenges of maintaining effective oversight while ensuring legitimate beneficiaries continue to receive necessary support.

State officials have not specified how many facilities are currently under investigation or provided estimates of the total amount potentially lost to fraud within the childcare subsidy program specifically. The administration has emphasized that investigations are ongoing and that additional measures to strengthen program integrity are being implemented.