Report: Lunch program poorly designed

Photo By Cheryl Hehl Linden was just one of many school systems looked at in a study of the Federal subsidized lunch program. The report showed significant problems with oversight and found many offenders abusing the system and receiving free or reduced price meals when they were not elligible.
Photo By Cheryl Hehl
Linden was just one of many school systems looked at in a study of the Federal subsidized lunch program. The report showed significant problems with oversight and found many offenders abusing the system and receiving free or reduced price meals when they were not elligible.

UNION COUNTY — It appears that Elizabeth is not the only school district taking advantage of the federal school lunch program. A New Jersey state comptroller’s report released last week said the problem is considerably more widespread than anyone thought and it is just the tip of the iceberg.

“Dozens of public employees appear to have lied about their income in order to take advantage of the school program designed to help families in need,” State Comptroller Matthew Boxer said of the report that targeted 15 school districts, including Linden.

According to Office of the State Comptroller Media Representative Juliet Fletcher, because investigators could not possibly review every school district, Linden was selected to represent the county.

“It was one of the towns we determined would be a good representative example,” she said, explaining that investigators did not look at any other towns in the county, so it is unknown if these school districts violated federal laws involving the school lunch program applications or not.

In the report, Linden was found to have compromised school lunch applications, one in particular involving a school employee. However, the comptroller’s office only looked at 3 percent of Linden’s applications, finding in 68 percent of the cases, applicants were not eligible for the program. The remaining 97 percent were not examined.

The sampling of 15 school districts may have been just the tip of the iceberg, but it resulted in Boxer referring 83 public employees along with 26 other individuals to the division of Criminal Justice for prosecution. In fact, the total unreported income of these 109 cases exceeded $13 million over the three-year period reviewed.

The state and federal government pump considerable funding into this program — funding paid for by taxpayers in the United States. For example, in the 2011-2012 school year, the federal government provided $212 million in free lunch program reimbursements to school districts in New Jersey. The state handed over another $5 million to further bolster the program.

The report noted that the comptroller’s office began its investigation into the free lunch program after the Elizabeth Board of Education president and others affiliated with the Elizabeth school district were arrested for filing fraudulent free lunch applications.

However, this is not the first time the state investigated this issue.
LocalSource looked into this further and found that in 2011 State Auditor Stephen M. Eells recommended in a report that the state stop using the school lunch program enrollment to calculate how state aid is distributed.

“There is a significant error rate,” the state auditor said about the school lunch database, adding “it’s not accurate by a long shot, and I don’t think we should be using it to determine state aid.”

Eells also discovered that the 428,000 New Jersey students enrolled in the free meal program in 2010 generated $2 billion in extra “at risk” state aid for their districts under the state school funding formula. This provided these school districts with an extra $4,700 to $5,700 per student in the program.
But nothing has been done about these oversights since then by the state or federal government.

Because of their lack of oversight, school districts are not off the hook either. The report said one of the major problems was school districts failed to remove applicants even after they submitted documents showing they would be ineligible under federal guidelines. But, Eells said two years ago, school districts are doing what they are asked to do with the 3 percent of applications they are required by law to check. Boxer was not as kind about how school districts fared in this area.

“The failure to weed out fraudulent applications has fiscal consequences that extend beyond the cost of administering the NSLP itself,” the report noted, explaining that New Jersey school districts receive additional state aid based on the number of children in their districts eligible for the program.

In other words, the more students on the federal lunch program, the more state and federal aid money the school district receives. In fact, for each student on the federal program, the school district receives $5,000 in aid. For some school districts, like Elizabeth, Linden, Roselle, Union, Plainfield and others, this could end up being a sizable amount of additional aid. All of which can be used toward school programs or anything the districts desires.

Part of the problem is that the school lunch program income limit is more generous than the national poverty level. A family can make as much as 185 percent of the poverty level to qualify for the reduced-cost school lunch program. For instance, the income limit for a family of four for the 2011-2012 school year was $29,055 for the free meal program and $41,348 for the reduced-cost meal.

In 2011, when Eells’ audit came out, he said in the 2009-10 school year, school districts statewide found that 44 percent of those verified were no longer eligible for either free or reduced-fee lunches. Taking into account families that reapplied, Eells said at least 37 percent were ineligible.

The National School Lunch Program offers state and federal reimbursement to school districts to provide free or reduced-cost school lunches to students from families that meet the income eligibility requirements. Although applicants must fill out a form, LocalSource found the federal government does not require any proof of income, such as a W2 income tax statement, or paycheck receipt. In fact, the only thing an applicant, including school employees and board members, is required to do is fill out the form and provide their social security number.

Although applicants have to certify they clearly understand there could be criminal penalties for giving false information, according to Boxer’s report it is unlikely anyone will even see the applications.

“The OSC’s report found that the design of the NSLP, as structured by the federal government, ensures that the vast majority of applications are never reviewed for accuracy,” the report noted, adding that federal law does not require proof of income with applications. Instead, the law allows school districts to look at 3 percent of the applications whose reported incomes are closest to the eligibility limit. School districts, though, are specifically prohibited from verifying the remaining 97 percent of applications unless there is cause to suspect that a certain application is fraudulent.

The investigation also faulted the state Department of Agriculture, which administers the program, for failing to use known salary information to identify and investigate questionable applications from school district employees. Multiply this oversight or malfeasance on the part of one school district, and the loss to children who actually qualify for the free lunch program is staggering.