July 17, 2013 / 3:32 PM / 4 years ago

Fraud widespread in New Jersey free lunch program -state official

By Hilary Russ
    July 17 (Reuters) - New Jersey will refer 109 names to
criminal investigators after a probe allegedly found pervasive
fraud in the federal free and low-cost lunch program in the
state's schools, a state official said on Wednesday.
    The alleged fraudsters are all public employees, their
spouses or members of their households, accused of lying about
their income so that their children would qualify for federally
subsidized reduced-price lunches, according to New Jersey
Comptroller Matthew Boxer.
    Six of the names, which were not released, are elected
school board officials. The 109 people underreported their
household income by more than $13 million altogether over the
three years of records and 15 school districts that Boxer's
office examined, according to his report.
    If the state were to examine the more than 600 additional
school districts in New Jersey, hundreds of additional cases
could surface, the report said.
    One unnamed school board member in Pleasantville, a city of
nearly 21,000 people near the New Jersey shore, allegedly
underreported her household income by about $59,000 each year.
When confronted by Boxer's office, she said she didn't include
her own salary because "she herself was not the person receiving
the free student lunch," the report said.
    She also allegedly said that her income "is none of [the
school district's] damn business," according to the report.
    The National School Lunch Program itself is partly to blame
for the abuse, the report said. That's because the federal
program only requires schools to verify 3 percent of the
applications of people whose reported incomes are closest to
eligibility limits.
    School districts are not allowed to verify the remaining 97
percent of applications unless they suspect fraud, Boxer's
report said.
    New Jersey isn't the only state to find abuse of its school
lunch program. A year ago, the inspector general of Chicago,
Illinois' schools found 26 cases of current or former employees
lying about their income to qualify.
    The New Jersey investigation also found several instances of
school districts failing to reject applicants who had submitted
documents proving they were not eligible.
    The U.S. government reimbursed New Jersey's schools for $212
million for the program during the 2011-2012 school year, while
the state itself chipped in $5.5 million.
    The federal program operates in more than 100,000 schools
and residential child care institutions throughout the country.
To qualify for free lunches, a family's income must be at 130
percent of the poverty level, or $29,965 for a family of four as
of June 30. The program cost $11 billion in fiscal 2011.

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