Report Says Schools Are Stealing Meal Money from Poor Kids

Thursday, February 07, 2013

The California Department of Education (CDE) has ordered eight school districts to repay nearly $170 million to student meal programs they grabbed to cover their own budget shortfalls over a period of years.  

In what may be only a “hint” of “ongoing abuse,” a state Senate investigation found that money meant to pay for free and reduced-price meals—often the only decent food low-income students receive—was diverted or spent in a fashion that undercuts the programs.

“From my point of view, they are literally taking food out of the mouths of kids,” the report quotes Richard Zeigler, chief deputy state superintendent of public instruction.

The report pulls together findings that have been known in some education circles for years, and have been reported sporadically in the press.

Los Angeles Unified School District was allegedly the worst offender, owing $158 million for “misappropriations and unallowable charges” taken from its cafeteria fund over a six-year period. Food services director Dennis Barrett told investigators that he advised district administrators in 2007 that federal laws were probably being broken. A subsequent district report verified his warning and then was promptly ignored.

Cafeteria fund diversions included cost-saving shortcuts like serving processed food instead of fresh, shortened lunch periods, short-handed cafeteria staffing and run-down cafeterias. Discouraged students would seek food elsewhere, freeing up state and federal funds for other purposes.

L.A.’s food director said the result was that one-third of the 80% of kids eligible for free meals didn’t get them. Jan Monforte, a former Santa Ana Unified School District food service director, said the food was terrible and the staff was too small, which contributed to a $16 million surplus in that district’s cafeteria account.

The investigation by the Senate Office of Oversight and Outcomes didn’t find any outright theft for personal profit, but it said some of the actions by districts were clearly improper, like using cafeteria funds to pay for lawn sprinklers. Which is not to say that deliberate fraud is nonexistent.

Oxnard Union High School District regularly inflated subsidized meal counts, causing its federal subsidy to jump 53%. It went on for years until an employee ratted them out in 2008. When a problem is found, it is usually reported by a whistleblower.

Most of the money in question came from Washington. The federal government sends California more than $2 billion a year for the National School Lunch program and the state spends around $145 million a year to augment that.

The Education Department has responsibility for overseeing the meal money but has fewer than 60 field examiners watching around 3,000 school districts and other food providers. Most of the examiners are nutritionists, not financial specialists, and, according to the report, rarely look at the books.

There is virtually no other oversight. Regular independent school audits typically do not include cafeteria funds. When they do, CDE officials said, the auditors usually have no special knowledge of the complex state and federal rules that apply.

The Senate report noted that new federal regulations promise more timely oversight, and the state Education Department is trying to beef up its audit process, but it’s unclear if additional funds will be available to implement the changes.

–Ken Broder


To Learn More:  

Schools Grab Millions of Dollars from Poorest Students’ Food Funds (Capitol Weekly)

Report: Calif. Districts Misspent Cafeteria Money (by Terence Chea, Associated Press)

Food Fight: Small Team of State Examiners No Match for Schools that Divert Student Meal Funds (by Jim Sweeney, California Senate Office of Oversight and Outcomes) (pdf)

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