Solving School Lunch Program Fraud, Washington Style

Published September 29, 2015

Five federal employees were charged in August with theft and fraud for falsifying documents to qualify their children for free lunch at Prince George’s County, Md., public schools. The alleged fraudsters — all employees of the Government Accountability Office — were discovered after an audit into the National School Lunch Program by the very federal agency for which they work.

One employee was also a member of the Prince George’s County, Md., school board and has since resigned. Officials believe another 300 federal workers may be involved.

The case is not an isolated incident; in the past few years, top administrators for the Chicago Public Schools and several New Jersey state employees have also been caught lying on applications so their children could receive free school lunch.

But public employees aren’t the only ones trying to game the system. The program, which provides free and reduced-price meals for 20 million kids every year, is rife with fraud and waste. Some audits estimate billions of dollars are wasted each year due to improper payments to unqualified recipients.

But thanks to a massive expansion of the program, there’s likely to be a lot less waste and fraud. Why? Because families who live in low-income school districts will no longer need to submit individual applications and show financial need. Instead, entire school districts can qualify based on fuzzy numbers tied to the number of families in the district receiving other forms of government assistance. No applications — no fraud. Problem solved, Washington-style.

The new free meal program — called the Community Eligibility Provision — is part of the Healthy, Hunger-Free Kids Act that Congress must reauthorize this month. Under the CEP, school districts can provide taxpayer-funded meals to all students even those who wouldn’t have qualified in the previous year, such as the children of federal employees. The Department of Agriculture, the agency in charge of all child nutrition programs, is heavily promoting the CEP to reduce paperwork at local schools and eliminate the “stigma” of someone eating a free lunch.

Here’s how it works: A school district qualifies if 40 percent of the students receive government subsidies such as SNAP, Temporary Assistance for Needy Families or they are foster, runaway or migrant children. To boost the eligibility numbers even more, the USDA applies a “claiming factor” that adds another 60 percent to that figure based on the assumption many more students qualify but don’t apply. Once a district signs up for the CEP, every student, regardless of need, receives a taxpayer-subsidized breakfast and lunch for four years.

The free meals are reimbursed by the USDA at varying rates, but most districts will get paid about $4.50 per day, per student. The cost to federal taxpayers is roughly $16 billion per year and Agriculture Secretary Tom Vilsack anticipates the CEP will be the “main driver” behind a 10 percent jump in the budget for next year. Vilsack also stated that only about half of the eligible districts now participate. This means the school breakfast/lunch budget could also double, costing taxpayers upward of $32 billion in just a few years.

This is the second year that schools nationwide can apply for CEP status and thousands of districts are expected to sign up. Not surprisingly, several Prince George’s County public schools are now under the CEP for this coming school year: “All enrolled students will receive free meals, and their families will not have to complete an application,” according to a statement by the district. If only those GAO employees had waited a few more years — they wouldn’t be accused fraudsters, they would be “customers.”

It’s a noble and worthy national goal to make sure poor, hungry kids are fed. It’s quite another to extend government benefits to families who don’t need it. We don’t believe this is an effort to actually reduce fraud or tease paperwork. Instead, the massive expansion of the program is a cause for celebration among those who believe that the more kids eating government-procured food, the better. Free school meals for families who don’t need it only empowers federal bureaucrats and lessens the role of the parent, while sending taxpayers the bill.

Congress should put the USDA on a diet and eliminate the CEP before it becomes another unjustifiable, but irreversible entitlement program.

Julie Kelly is a cooking teacher, food writer and food policy adviser for the Heartland Institute in Orland Park, Ill. Jeff Stier is a senior fellow at the National Center for Public Policy Research in New York City.


[Originally published at Pundicity