The U.S. Department of Agriculture (USDA) spent more than $12 million on free and reduced price lunches for children who were ineligible for the program because they were not from low-income families.
An audit released Monday by the Office of Inspector General (OIG) found abuse in the National School Lunch Program (NSLP), including school districts using cafeteria funds to buy SUVs.
The USDA’s Food and Nutrition Service (FNS), which administers the federal school lunch and breakfast programs, does not require households to provide income information, leading to hundreds of thousands of ineligible children receiving free lunches.
More than half of the OIG’s sample of households approved for benefits were ineligible.
"Nationwide, [school food authorities] SFAs must annually verify eligibility for a sample of household applications approved for free and reduced-price meal benefits," the audit said. "During [school year] SY 2012-2013, as a result of the annual verification process, SFAs reduced or eliminated benefits for 107,974 of the 199,464 sampled households nationwide (about 54 percent) because the income claimed on the applications was unsupported or excessive."
"This occurred because households are not required to provide proof of income when they apply for benefits, inhibiting SFAs from confirming that the income reported on applications is accurate," the OIG said. "As a result, we estimated that FNS may have spent nearly $12.5 million on lunches for students who later had their benefits reduced or denied after being selected for verification."
One school food authority in California canceled or reduced benefits for 87 percent of a sample of 1,000 participants following a review of approved applications by the OIG.
"Based on these results, we conclude that it is likely that other students receiving free or reduced-price meals may not be eligible for them," the OIG said.
The OIG also found that 97 percent of households receive benefits solely based on self-reported income. The agency watchdog recommended that the USDA require parents applying for their children to provide proof of income.
The audit cited one case where a school board president in New Jersey under-reported her income to get subsidized lunches for her children. The woman, Marie Munn, stole $2,600 from the federal lunch program, even though she and her husband, a New York Times employee and "owner and head coach of a semi-professional football team," had incomes making them ineligible for the program meant to provide meals for poor families.
Munn was sentenced last year to probation and community service, which she had to complete serving food in a school cafeteria.
Other examples included 21 principals and administrators in Chicago who were "found culpable of falsifying information on their applications," including an elementary school principal and his high school assistant principal wife who got benefits for their children even though their salaries together totaled over $230,000.
In New Jersey, over 100 public employees, elected school board members and school district employees, "appeared to have materially underreported their income on school meal applications."
Only children living in households at or below 130 percent of the poverty level are eligible for free meals, while those between 130 percent and 185 percent of the poverty level are eligible for reduced-price meals. The USDA reimburses schools up to $2.86 for each free lunch for the number of children in their school receiving free meals through the program.
The audit found that school districts participating in the lunch program "mismanaged and misused" program funds, including holding $4.8 million in "excess cash," spending $6 million in unapproved purchases, and charging $166,933 in unallowable costs to cafeteria funds.
The unapproved purchases included $207,763 by a school food authority in Florida to purchase five SUVs and six vans, averaging $18,887.55 per vehicle. The funds were meant for "cafeteria improvement."
According to the audit, over 31 million children received reduced-price or free meals through the school lunch and breakfast programs, costing taxpayers $14.9 billion in fiscal year 2012.
Last year, the OIG reported that the school breakfast program had the highest rate of improper payments of any USDA program, at 25.26 percent, costing taxpayers $716 million in overpayments to schools. Over 15 percent of the school lunch program’s payments were improper, amounting to $1.8 billion.