Following the massive fraud uncovered in Minnesota — empty buildings advertising themselves as daycares, funded by the taxpayer dime — Vice President JD Vance’s announcement of a Department of Justice task force to investigate abuse of public benefit programs is both necessary and welcome. Fraud on this scale demands enforcement, and those responsible should be held accountable.

But the Minnesota scandal that helped spur the task force raises a deeper and perhaps even more troubling question: How did a system, purportedly designed to help households, operate for so long without confirming whether children were physically present and receiving services?

In Minnesota, hundreds of millions of taxpayer dollars intended to serve children were funneled through shell organizations, fake providers, and fabricated paperwork. This failure has been brought into sharp focus by investigative reporting from Nick Shirley, whose work has drawn national attention to how easily a system riddled with intermediaries could be abused and fail the very people it was meant to serve.

This failure should not be viewed as an isolated scandal or a uniquely Minnesotan problem. That is why the new task force is right to take a multi-state approach — to ensure accountability elsewhere and to prevent similar abuses from taking root.

But this also points to a broader flaw in how many social programs are designed and administered, particularly those built around centralized systems that elevate bureaucracy over people.

In theory, the political Left prides itself on championing the vulnerable. Yet time and time again, it defends systems that harm, or render invisible, the very people it claims to protect.

Transparency and accountability are undermined when benefits are routed through layers of intermediaries. As bureaucratic systems grow more complex, they risk becoming detached from the people they claim to serve. When fraud occurs, it can grow rapidly because the distance between the dollar, the decision-maker, and the intended beneficiary is simply too great.

The human costs of this approach are real. Every dollar siphoned off through fraud is a dollar not available to a hardworking taxpayer. Every layer of administrative bloat absorbs resources that never reach a household that could meaningfully benefit.

This dynamic is embedded in how childcare policy is approached more broadly.

Policymakers often speak as though families are clamoring for more government-run daycare. But most parents prefer informal arrangements with relatives, friends, or trusted caregivers; only a small share say a daycare center is the best environment for their child, even when free, formal care is available nearby. Many working parents say they would prefer to reduce hours and spend more time with their children if the cost of living made that possible.

Yet public policy routinely pushes families toward institutional models while undermining the kinds of care they actually want. The Biden administration’s priority legislation, Build Back Better, exemplifies this, steering billions of dollars away from taxpayers and families and to government-approved institutional daycare.

Overly restrictive regulation also contributes to this dynamic. Childcare providers are often micromanaged with rules that have little connection to safety or child wellbeing, such as rigid staff-to-child ratio requirements and detailed stipulations governing the number and type of toys, even how many balls of various sizes are required for a given number of children, making it harder for smaller providers to survive.

The result has been a decline in home-based child care over the past decade, even though it is often the most affordable and preferred option for families. Parents feel trapped because these policies have narrowed their choices.

Notably, many of these costly regulations do not statistically improve quality. Research consistently shows that certain mandates, such as rigid staff-to-child ratios, drive up prices without delivering measurable benefits for children. Ironically, oversight that actually matters, like verifying that services are delivered to real children, often falls by the wayside, as illustrated in Minnesota.

We see similar incentive problems in other large public benefit programs, including Medicaid. When federal matching funds reward states for how much they spend rather than how effectively they spend it, aggressive fraud prevention offers these states little upside. Over time, systems expand, and scrutiny weakens.

Better policies can make fraud harder to commit in the first place. Just as importantly, those same policies create systems that better reflect how families actually live, and lead to greater satisfaction.

A more realistic and humane approach to childcare policy begins by trusting parents to decide what care works for their children and reserving strict oversight for when it is truly needed. If policies focused on expanded supply, reduced unnecessary barriers, and allowed benefits to follow people, rather than flowing through sprawling, provider-centric systems, this kind of mass abuse would be much harder to execute. They would also align incentives and allow families to build care arrangements that actually fit their lives.

The Minnesota scandal should prompt more oversight and transparency, but it should also prompt larger reforms. If lawmakers truly want to help families, the path forward is fewer rigid mandates, more real choices, and accountability that begins at the program’s inception — before rampant fraud occurs and before public trust is lost.

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Heather Madden is policy staff director at Independent Women.

The views expressed in this piece are those of the author and do not necessarily represent those of The Daily Wire.

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Minnesota’s Fraud Scandal Shows Why Childcare Policy Is Broken