January 10, 2026 l Reporter: Johnson
WASHINGTON/SAINT PAUL — The U.S. Department of Agriculture (USDA) has announced the suspension of more than $129 million in federal financial awards destined for the state of Minnesota and the city of Minneapolis, citing allegations of widespread fraud in federal benefit programs administered in the region, senior U.S. officials confirmed Friday.
In a letter dated January 9, 2026, addressed to Minnesota Governor Tim Walz and Minneapolis Mayor Jacob Frey, USDA Secretary Brooke Rollins said the agency will halt all active and future USDA awards including funds tied to food, nutrition and social services until the state and city provide detailed justifications showing that fraud has been addressed and stopped. The action affects federal assistance programs worth a combined $129.18 million, which will remain frozen unless lawmakers or officials meet the USDA’s documentation requirements within 30 days.
Rollins, who made the announcement via a social media post and formal correspondence, accused state and local authorities of failing to properly safeguard federal funds and allowing “massive fraud” to occur within benefit programmes. “Those in charge have ZERO plan to fix it,” she wrote, underscoring the administration’s emphasis on accountability and stewardship of taxpayer dollars.
The USDA’s action specifically targets awards to Minnesota and Minneapolis until credible evidence of legitimate use of funds is submitted. Rollins directed state officials to submit justification for all federal dollar expenditures from January 20, 2025 to the present within the prescribed timeframe a move that would introduce heightened oversight and compliance requirements for future federal support under USDA programs.
The decision comes amid ongoing investigations into alleged misuse of federal benefit programmes in Minnesota, including cases that federal prosecutors have described as significant fraud schemes. Authorities have scrutinized some nonprofit organisations and service providers, particularly in the context of pandemic-era programmes funded through USDA and other federal agencies, though details of specific accusations vary by case.
Minnesota state officials and Minneapolis city representatives have indicated they are reviewing the USDA’s directive and consulting with federal partners to address the suspension, but have not yet released comprehensive public responses detailing how they intend to comply or contest the action.
The funding freeze is part of a broader pattern of heightened federal scrutiny of state and local administration of social services and nutrition programmes under the current Trump administration, which has tied continued funding to enhanced verification and fraud-control measures.
Key points of the USDA action:
- $129.18 million in USDA financial awards to Minnesota and Minneapolis suspended effective immediately.
- State and local officials have 30 days to justify federal spending to the USDA’s satisfaction.
- The move is framed by federal authorities as necessary to combat widespread and systemic fraud in benefit programmes.