Quality Learning Center in Minnesota was found at the center of an alleged childcare fraud scandal in the state. (Fox News)
In the video, many of the facilities appeared non-operational despite allegedly receiving millions of dollars in government aid.
"We believe the state of Minnesota has allowed scammers and fake daycares to siphon millions of taxpayer dollars over the past decade," he said.
In an effort to combat fraud, O'Neill said he ordered that all Administration for Children and Families payments made across the country require justification and receipt or photo evidence before money is sent to a particular state.
Secondly, the agency is demanding that Minnesota Gov. Tim Walz hand over a comprehensive audit of these centers featured in Shirley's video, including attendance records, licenses, complaints, investigations and inspections.
FEDS LAUNCH 'MASSIVE' INVESTIGATION AFTER VIRAL VIDEO ALLEGES MINNESOTA DAYCARE FRAUD
Independent journalist Nick Shirley's video about the daycares went viral. (Fox News)
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"She could not tell me with confidence whether those allegations of fraud are isolated or whether there's fraud stretching statewide," he said.
Louis Casiano is a reporter for Fox News Digital. Story tips can be sent to louis.casiano@fox.com.
https://www.foxnews.com/politics/hhs-cuts-off-minnesota-child-care-payments-over-alleged-daycare-fraud-scheme