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January 17, 2018

Summer meals for kids sorting out bad apples

Summer meals for kids sorting out bad apples

When the clock struck 7:30 a.m. during the week this summer, children poured into Little Rock’s Washington Magnet Elementary School.…

When the clock struck 7:30 a.m. during the week this summer, children poured into Little Rock’s Washington Magnet Elementary School.

On one particular Tuesday, Margaret, a fifth-grader participating in a summer program at the school, picked up grapes, Lucky Charms cereal and low-fat milk from a lunch line before taking a seat at a long, brown cafeteria table.

“I’m not a fan of chocolate. Chocolate is like my least favorite,” she said when asked about her milk choice. “I just go for the white milk because it’s healthier.”

Margaret’s low-fat milk — along with the food for dozens of other children at the school — was paid for by the U.S. Department of Agriculture’s Summer Feeding Program.

The program is meant to ensure that children who receive free or reduced-price lunches during the school year continue to eat during their summer breaks.

But the program also has been associated with fraud — in Arkansas and across the country.

An ongoing investigation has unearthed more than $11 million in stolen funds. Two Department of Human Services employees have been indicted and have admitted to being “gatekeepers” who, in return for bribes, made it possible for others to defraud the program. So far, 10 people have been sentenced, and five await sentencing.

State officials cracked down while trying to ensure that food providers don’t flee the program and leave children like Margaret hungry.

Nearly three years after then-Gov. Mike Beebe took office in 2007, he was confronted with headlines about hungry children in his home state.

The USDA’s annual report on Household Food Security, revealed that in 2008, 17 million U.S. households, or 14.6 percent, were “food insecure” — meaning that at some time during the year, they had difficulty putting enough food on the table because of a lack of resources.

Put in the context of individual Americans, the report found that 16.4 percent — just over 49 million people — experienced hunger or were at risk of running out of food at some point.

The 2008 figures on Americans who lack dependable access to food were the highest since the USDA began the national food-security surveys in 1995.

For Arkansas, the survey showed that based on multiyear averages the number in that category had been steadily increasing. Using 1996-98 data, 13.7 percent of Arkansans were “food insecure,” a tie for seventh-highest with Washington, D.C.

From 2003-05, the number climbed to 14.7 percent, moving Arkansas to the fifth-highest level.

Then the study found the state level at 15.9 percent — behind only Mississippi and Texas — for the 2006-08 period.

Beebe saw the need and wanted the state to act.

“The program really grew under the previous administration. There was a big interest in trying to feed children in Arkansas because we were ranked pretty low, but I think it did not anticipate — it certainly did not anticipate — the kind of collusion that occurred,” said Tonya Williams, director of the Division of Child Care and Early Childhood Education, a component of the Department of Human Services that oversees the federal program.

Prosecutors said the program fraud lasted from 2011 to 2014.

Assistant U.S. Attorneys Jana Harris, Allison Bragg and Cameron McCree have said Human Services Department “insiders” paved the way for others to sign up as sponsors for food-providing programs.

In some cases, no children were served as part of those programs. In others, program operators would exaggerate the number of children fed when applying for a federal “reimbursement.”

Records show program spending in the state exploded over the past five years — rising from $5.3 million in 2012 to $22.6 million in 2014. All of the money came from the federal government.

Williams said that around the same time, the federal government expanded the program with an “at risk” component for licensed child-care providers.

“It allowed people to offer an evening meal to school-age students, for example, and that was brand new,” she said. “That just started in 2012. So there was a lot of growth there and that’s what some of the folks that were in the news — they were participating in that program. And then when you get to summer, the very first day that summer starts when your school is out, those programs convert — can become — a summer feeding program.”

As the number of providers increased, the Department of Human Services staff noticed irregularities and called the FBI.

“I’ve always been thankful that we identified that and called immediately and worked with the office of inspector general, the FBI and many other federal agencies,” Williams said.

She did not realize at the time that staff members were involved in the fraud.

The investigation grew to include the USDA office of inspector general, Internal Revenue Service and U.S. Marshals Service, along with the FBI.

The number of people in Arkansas who have trouble putting food on the table has only increased. Now, about 19.2 percent of Arkansans are “food insecure,” according to the latest USDA report.

“I keep reminding people that our primary goal is to make sure that low-income children are fed. That’s what I keep telling my staff, because this has been a very upsetting situation and very disturbing, and it’s easy to get very jaded by all of this,” Williams said.

“I keep telling my staff, we are here to serve Arkansans and low-income children, and don’t lose focus. Don’t let all of this darken what we’re trying to do, but we can do it better and we’ve got to do it better and we’ve made a lot of changes to make it better.”


Federal feeding programs have long been associated with fraud.

In November 1999, the U.S. Government Accountability Office found that the Child and Adult Care Food Program “has long been plagued with fraud and abuse. Since 1993, the USDA’s office of inspector general has conducted over 55 audits and investigations in 23 states — identifying case after case of the intentional misuse of federal funds.”

“Scams uncovered included sponsors’ creating fictitious day care providers, inflating the number of meals served, and padding executives’ salaries and benefits. Given the scope of the problems that the Inspector General identified, USDA declared the program to have ‘material weaknesses’ — that is, the program lacked sufficient controls to ensure that federal funds were adequately safeguarded.”

The report came months after the USDA’s office of inspector general audited 10 sponsors in California and found “all 10 sponsors had engaged in fraudulent activities and/or serious program irregularities eluding detection for years because of the State’s negligent oversight.”

The problems described in 1999 have continued in Arkansas and elsewhere.

Tennessee Comptroller Justin Wilson has conducted numerous investigations into feeding programs in that state and said in an interview that common sense is among the most important tools available to shut down fraud.

“There is different types of monitoring. There is the minimum requirements set forth in the federal code of regulations about filling the blanks, a certain number of things you can do, a bare minimum. And you can fill in the blanks and say that’s fine. We have done what we need to do. That has proved in Tennessee not to be completely effective. In fact, it’s been ineffective. What you need to do is simply when you see an indication that something is being screwy … you open your eyes. You use common sense. And you see what in the devil is going on,” he said.

“If you see an entity reporting the same number of people every day in and out, whether it’s raining or pouring or anything else, and it happens for a long period of time, well maybe there’s something going on. If you see the same reports that are Xeroxed, then maybe there’s something going on. There might be an explanation for it. If you go to a site that’s listed as simply an embankment on the side of the road, then maybe something is going on, and then you follow it up.”

Horror stories in Tennessee, he said, might never have occurred if that state’s Department of Human Services had used some common sense.

The USDA proposed a rule in 2016 that Jalil Isa, a spokesman for the department, said is intended to “safeguard the integrity of school nutrition programs and help ensure taxpayer dollars are being invested as intended.”

The rule changes would establish consistent procedures to permanently remove program providers, allow the USDA and state agencies to impose financial assessments in egregious situations, increase resources provided to states for oversight, and strengthen training for state and school program operators.

“While egregious mismanagement of child nutrition programs is infrequent, the changes in the Child Nutrition Program Integrity proposed rule provide the tools needed to address these issues and to serve as a deterrent,” Isa said in an email. “Program violations reduce public confidence in our programs and sometimes lead to improper payments. By limiting these violations, more resources and support will be available for programs in good standing.”

Since the comment period closed on the proposal in May 2016, no further action has been taken.

“We’re still reviewing comments,” Isa said. “At this point, we do not yet have a time frame for further action.”


The Arkansas Department of Human Services failed to develop internal controls, was behind in performing compliance reviews, did not require receipts for reimbursement claims and had an insufficient system for monitoring nonprofit institutions, Arkansas Legislative Audit told legislators in May.

In Arkansas, multiple officials with the Department of Human Services say they have made changes to strengthen their oversight over federally funded feeding programs.

“We had individuals who were responsible for opening a site, processing the application and then monitoring that site. We realize that was not a process we could stand by,” said Keesa Smith, deputy director of the Arkansas Department of Human Services. “We decided to break that apart.”

The department is using Census data to determine where children are and where food providers might be needed. Smith said the department is also focusing on using schools to provide services instead of independent nonprofit organizations.

“This is a great example of what we are really happy to see which is a partnership with our local school districts,” Smith said. “These children are familiar. This is their community. They attend the school. It’s easy for them to get to. They’re familiar with the people that are here. It’s a great fit. Even if we don’t have a school district, we have some great community partners who have equally made it easy for children to get fed.”

A review of serious deficiency letters from the Department of Human Services for the past two years identified no schools that ran afoul of the requirements.

And out-of-state firms have been brought in that specialize in ensuring the federal dollars are spent properly.

“Our staff will be going out with them, and I think it will be a great learning experience too. They’re contracted to go out and do these reviews, so we’ll have more people doing reviews,” Williams said. “After all of this has happened, I want to make sure that we have reviewed all these programs.”

CN Resource LLC of Arizona will be paid a maximum of $51,987 to conduct school lunch reviews. MH Miles Co. CPA of Georgia will be paid a maximum of $3.14 million to perform reviews and site visits for the Child and Adult Care Food Program and the Summer Food Service Program.

Documents provided by the Human Services Department show it is issuing more “serious deficiency letters” to violators of state and federal policies.

In the first half of 2017, the department issued about 30 such letters demanding repayment. In 2016, only 15 such letters were sent for the entirety of the year.

Margaret, the fifth-grader who ate at Washington Magnet Elementary School, said she appreciated the food provided by the federal feeding program.

Her parents were on her mind as she ate Lucky Charms.

“It’s amazing how they’re able to serve all these people at the program for breakfast every morning because some people don’t get breakfast — usually — at home,” she said. “I think it’s really nice for them to provide all the breakfast and provide food for the program so the parents don’t have to stress more on bringing breakfast.”

Information for this article was contributed by Linda Satter of the Arkansas Democrat-Gazette.

SundayMonday on 09/17/2017

Source: Arkansas Democrat-Gazette Summer meals for kids sorting out bad apples

Summer meals for kids sorting out bad apples


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