WASHINGTON — The Department of Health and Human Services wants Delaware to repay $3.7 million after state officials wrongly claimed they were eligible for money to support low-income families, according to a letter reviewed by The Post.
Administration for Children and Families Assistant Secretary Alex Adams told Democratic Gov. Matt Meyer the First State had until Jan. 14 to return so-called “contingency funding” from the Temporary Assistance for Needy Families (TANF) program.
TANF helps poor families with cash assistance for food, child care, early learning programs and opportunities for adults to undergo workforce training.
If the funds aren’t given back, Adams warned, ACF may cut block grants to Delaware in the future.
“In order to be eligible to retain TANF Contingency Fund payments, a state must meet the requirement to maintain 100[%] of the applicable Maintenance of Effort (MOE) level,” Adams said, noting that Delaware officials had certified in a Sept. 1, 2023, letter that they would provide matching funding.
“Based on this certification, in FY2024, the Biden administration made Contingency Fund payments to Delaware totaling $3,668,573. Delaware’s certification proved inaccurate,” the ACF boss continued.
“Upon review of Delaware’s annual reconciliation information, ACF has determined that, in FY2024, Delaware did not meet or exceed the 100[%] Contingency Fund MOE requirement.”
Delaware needed to spend $24,826,042 in fiscal year 2024 in order to get all the federal matching funds. HHS officials noted that only $21,872,175 had been disbursed by the state.
State budget documents that year show that Delaware officials had also asked for a $4 million TANF contingency fund grant that had “no required state contribution.”
Just 15 states took federal TANF contingency funding in fiscal year 2024, with nearly 7,000 families served in Delaware.
TANF, which is projected to spend more than $16 billion this fiscal year, is one of the top three block grant programs that the federal government runs, along with the Department of Housing and Urban Development’s Community Development Block Grants and the Child Care Development Fund program — all three of which are now under close scrutiny.
Adams’ message comes after HHS froze more than $10 billion in federal taxpayer-funded child care and social services for Minnesota, New York, Illinois, Colorado and California — before being blocked by a federal judge.
New York US District Judge Arun Subramanian, an appointee of President Joe Biden, issued the 14-day temporary restraining order just days after the funding freeze was first reported by The Post.
Attorneys general from the Democrat-led states had filed a lawsuit in response to the funding pause.
The Trump administration has been targeting those five states as well as other federally funded welfare programs — after news reports, audits and government officials claimed Minnesota had bilked taxpayers out of billions of dollars that went to fraudsters.
Past FBI probes of the fraud led to dozens of convictions in the Land of 10,000 Lakes — with $250 million in wrongful payments uncovered to the nonprofit Feeding Our Future, run by Somali American scammers who used the money to purchase luxury cars and real estate holdings.
Minnesota First Assistant US Attorney Joe Thompson last month alleged that the extent of the fraud could top $9 billion when further investigations into many of the Somali-linked organizations conclude — roughly half of the total federal funds sent to more than a dozen state programs since 2018.
“The magnitude cannot be overstated,” Thompson said Dec. 18. “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud.”
The case got national attention when conservative YouTuber Nick Shirley visited nearly a dozen child care centers in Minnesota that appeared to be serving no children during the day. Almost half of those centers were later confirmed to be not operating, the Minnesota Star Tribune reported.
Shirley’s more than 40-minute video gained millions of views on social media platforms and was boosted by the White House, members of the Trump administration and GOP lawmakers.
In addition to HHS, the Treasury Department and House Oversight Committee are investigating the alleged fraud.
Democratic Minnesota Gov. Tim Walz bowed out of his run for a third term Jan. 5 amid the mounting scandal.
“We cannot effectively deliver programs and services if we can’t earn the public’s trust,” the Democratic governor said. “We’ll win the fight against the fraudsters, but the political gamesmanship we’re seeing from Republicans is only making that fight harder.”
Reps for Meyer’s office did not immediately respond to a request for comment.
