New Jersey School Lunch Probe Raises Questions of Oversight

John Mooney | July 18, 2013 | Education
State comptroller says more than 100 public employees or family members improperly got subsidized meals in schools

Credit: Star-Ledger
State Comptroller Matthew Boxer
With news of a state probe revealing that more than 100 public employees or their family members improperly took advantage of federally-funded school lunch program, one key question comes to mind: Who’s minding the store?

The answer may be that nobody really is.

Before a bank of news cameras, State Comptroller Matthew Boxer yesterday released his office’s report on alleged abuses in the $220 million program intended to feed the state’s poorest schoolchildren, with findings that 109 public employees or their family members in 15 districts wrongfully received school lunches for their children by either under-reporting incomes or not reporting them at all.

The comptroller’s investigators looked at records in just a sampling of districts, a mix of urban and suburban, from Newark and Paterson to Toms River and Pennsauken. The findings cover a three-year period, ending in 2012.

Without naming names, Boxer said the 109 people were referred to the state’s Attorney General’s office for prosecution.

The program, which serves more than 410,000 students in the state, requires those receiving either free meals or subsidized meals to meet certain income thresholds. The local school district is responsible for spot-checking those records.

But it appears that few districts were checking the income information for these public workers – including some school board members – and that there were few safeguards to make sure such checks were taking place for applicants overall.

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In an interview in his office after the announcement, Boxer said the system itself is rife with flaws in both design and execution, offering few protections from abuse and even providing incentives for districts to look the other way.

The main incentive is that additional participants bring in more state and federal aid, Boxer said. His half-dozen recommendations for fixing the program’s problems include rethinking the funding incentive.

“They are really not inclined to look, because it is not in their financial interest to look,” Boxer said.

The situation is further complicated by the fact that the program nationwide has historically faced the opposite problem of being under-utilized by those who truly need it, especially older students in higher grades who try to conceal that they are poor.

Until recently, New Jersey had one of the nation’s lowest rates of participation in the free lunch program, prompting a statewide initiative by a number of nonprofit groups to raise awareness in schools of its availability.

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Boxer said yesterday that some districts may have gone too far in trying to boost enrollment.

“We understand that districts want everyone who is eligible to participate, but we also saw there was an incentive to sign up even those not eligible,” Boxer said in the interview.

Asked whether he expected fraud would stop if the state removed the incentive of extra state funding, Boxer said: “It would be interesting to see and compare if the amount of fraud changed. But what we are saying is you may not want to determine aid on faulty data. What we know for sure is this is faulty data.”

The free and reduced lunch program has been the subject of considerable debate for several years, and not just in New Jersey. The debate has heightened under Gov. Chris Christie — a task force was created two years ago to explore alternatives, but it has yet to issue its report.

There are other problems with the program at the federal level. According to Boxer’s office, the federal program does not even require applicants to submit income verification and actually prohibits local districts from doing much checking up on them. Under the law, local districts can only review 3 percent of applicants who are nearest the threshold; those outside that threshold can be reviewed only if there is cause.

In fact, districts were fairly diligent in reviewing those 3 percent, Boxer said, and in some cases a majority of those applicants were rejected. But that was not always the case and, even so, there was no mechanism to go beyond that.

In Bayonne, for instance, 71 applications remained eligible despite being reviewed and found to be missing income records. In Paterson, a school nurse was disqualified, but still was left on the school lunch rolls.

The state’s funding formula, which has been the subject of fierce debate in the courts and in the Legislature, specifically entitles districts to extra funds for enrollment of low-income students, as determined by the lunch program, because of the extra services assumed to be required for those students.

But Christie has openly criticized the formula as providing too much funding to districts that have shown poor academic achievement results – largely urban ones. He has repeatedly said that the state Supreme Court ‘s Abbott v. Burke decisions that led to the formula should be overturned, and has he quietly sought to lessen the extra funding in his own aid formulations.

Yesterday, Christie spokesman Michael Drewniak said Boxer’s findings only further back up the governor’s call for rethinking how schools are funded.

“The system is lawless when school districts turn a blind eye to fraud ¬¬ and in some instances promote it – in a federal program that doesn’t even permit sufficient follow-up investigation of applicants,” Drewniak said.

“Every public employee who lied about their income in order to get a free lunch to which they were not entitled should be fired and prosecuted,” Drewniak continued. “Moreover, the state must revisit how it dispenses aid to school districts and ensure funding levels are based upon true need and performance-based standards, rather than a formula based on fraud, corruption and waste.”

Legislators reacted quickly as well, led by Assembly Speaker Sheila Oliver, who said the program needs to be protected for those who truly need it.

“This program is among the best anti-poverty efforts the nation has put forth and is vital to young children who desperately need proper nutrition to learn and thrive,” she said. “To see it subject to such abuse is infuriating.”

Children’s advocates also said that the state should not rush to scale back the program or its use as a gauge of poverty for school funding.

“The focus on finding evidence of fraud in the program ignores the arguably more important fact that there are many low-income families that would qualify for the program who do not apply,” said a statement from the Education Law Center, the Newark-based advocacy group that has led the Abbott litigation.

“Efforts must be made to ensure an accurate count of eligible students, but outreach to those who qualify and are not receiving this important service must be paramount,” the ELC statement said.

Still, there was little light shed on where those safeguards would come from. The program is overseen by the state Department of Agriculture, but Boxer said there is little direct auditing of procedures.

In one of its findings, the report said the department had failed to make districts aware of all the tools available for investigating fraud.

Among Boxer’s recommendations were some ways for the agriculture department to double-check a family’s eligibility, including an immediate check of the payroll records of any public employees who apply.

A spokeswoman for the Department of Agriculture would not comment and referred questions to the governor’s office.