WA state now drawing scrutiny following DHS raid over childcare center fraud in MN

Recent raids by the Department of Homeland Security in Minnesota over allegations of mass childcare center fraud have inspired scrutiny over similar licensed businesses in Washington state, while the state Department of Children, Youth & Family Services is encouraging individuals to report suspected fraud to a 24/7 hotline. The DHS raids in Minnesota were precipitated by a video posted on X alleging systemic fraud regarding licensed childcare centers that did not exist. Federal authorities estimate the fraud could have cost taxpayers as much as $9.5 billion.

Similar on the ground investigations by The Center Square and independent media outlets have highlighted potential fraud in Washington state.

Childcare centers in Washington state must comply with the Foundational Quality Standards outlined in the Washington Administrative Code for centers and family homes. DCYF provides a searchable archive of licensed childcare centers for families looking for a provider.

DCYF provides a variety of early learning grants in addition to covering childcare for eligible families under two childcare subsidy programs. Child Welfare Child Care pays providers on behalf of families with children receiving services such as children in foster care, while the Working Connections Child Care pays for child care on behalf of eligible families.

DCYF Director of Communications Nancy Gutierrez told The Center Square in a phone interview that the agency has a variety of methods by which it monitors licensed childcare centers. One is through a physical inspection of every licensed facility, which are not announced in advance.

“If for some reason during an inspection there’s no child there, it would be noted and forwarded to our fraud hotline,” she said.

She added that they also conduct random auditing of the businesses in which they compare the attendance reported with what the agency has on file, including the names of the specific children to see if they match with eligible families.

Gutierrez encouraged individuals who suspect a childcare center of committing fraud to report it to their 24/7 hotline.

“There’s a system in place if there’s fraud,” she said.

She noted that some businesses do not have publicly available addresses because they are family home-based and not required to provide it to anyone but DCYF. “Those are not required by federal law to be their address online. They just need to put a ZIP code.”

Regarding private individuals approaching childcare centers, she said, “People can do whatever they want in public, but there’s [also] a system in place. There’s a place to call. It’s a private business. You can go and try to talk to business owners. They may not want to talk to you. This isn’t a public space.”

DCYF’s 24-hour Fraud Hotline is 1‐800‐562‐6906.