Colorado federal child care, family assistance funding frozen due to fraud concerns

COLORADO SPRINGS, Colo. (KOAA) - On Tuesday, the U.S. Department of Health and Human Services (HHS) announced it froze access to certain federal child care and family assistance funds for California, Colorado, Illinois, Minnesota and New York.

The agency says this follows "serious concerns about widespread fraud and misuse of taxpayer dollars in state-administered programs."

Last week, the Trump administration detailed its investigation into "fraudulent" Minnesota day care centers.

"Families who rely on child care and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose," said Deputy Secretary of Health and Human Services Jim O'Neill. "This action reflects our commitment to program integrity, fiscal responsibility, and compliance with federal requirements."

The following three programs overseen by the Administration for Children and Families (ACF) will be impacted in the five Democratic-led states:

• Child Care and Development Fund (CCDF)
• Temporary Assistance for Needy Families (TANF)
• Social Services Block Grant (SSBG)

As of November 2025, 2,407 El Paso County households were involved in TANF. State Representative Brittany Pettersen says 27,000 children and their families rely on TANF and programs like it in Colorado. She says President Trump is using kids as political pawns.

"It's just devastating to think about what this is going to do their lives and the opportunities that they have," said Pettersen. "But also the level that he'll go because the governor won't bend the knee to his wishes."

Pettersen says Colorado does not have a fraud or transparency problem with the government and that this move is about "political retribution."

"This is the fourth thing that the President has done since Governor Polis said that he will not transfer Tina Peters to a federal prison," said Pettersen. "He has gone after Coloradans every step of the way."

Prior to confirmation from HHS, reports were circulating of a funding freeze following an article from the New York Post. President Trump shared the article on his Truth Social account.

News5 reached out to El Paso County regarding the report. They sent us the following statement:

According to El Paso County, TANF is a federal program that provides financial assistance to low-income families.

HHS says letters were sent to the governors of the five impacted states. They were notified that access to funding is restricted pending further reviewing, impacting the following totals:

• CCDF: nearly $2.4 billion
• TANF: $7.35 billion
• SSBG: $869 million
  

The five states will now be required to submit a justification and receipt documentation before any federal payment is released. According to HHS, "funds will remain frozen in this fashion until ACF completes a review and determines that states are in compliance with federal requirements."