Chicago inspector general finds widespread fraud in free and reduced-price lunch program

CBS Chicago reports that fraud in the Chicago Public Schools’ free and reduced lunch program is system wide. “The inspector general reviewed of 1,000 cases of children enrolled in the program and reported “an astonishing 707 recipients — nearly 71 percent — had their benefits decreased” because of violations by parents,” Pam Zekman reports.

Education Next reported in its Winter 2010 issue that the federal school lunch program may not be a reliable measure of poverty. David N. Bass said that “the process for verifying eligibility for the program is fundamentally broken and that taxpayers may be picking up the tab for participation by ineligible families.”

State governments dole out benefits according to free and reduced-price lunch percentages, too. The Wisconsin Department of Public Instruction, for instance, allocates $2,250 to schools for each low-income child enrolled in kindergarten through 3rd grade. The program gauges poverty using NSLP participation.

Because of the financial benefits, local school districts have a clear incentive to register as many students in NSLP as possible. Some districts encourage parents to fill out applications, even if they are not sure they qualify….

Also, the federal government uses school lunch subsidies as a poverty indicator. “No Child Left Behind requires that schools meet performance benchmarks for program-eligible students in order to make adequate yearly progress,” Bass said. “Academic researchers also make use of NSLP participation data, raising the question of whether researchers could be producing skewed results if program participation is not a reliable indicator of income.”

In response to the article by Bass, Philip Gleason and Michael Ponza of Mathematica Policy Resarch said their research suggests that fraud is not a major factor in explaining errors. In one study, more than 40 percent of parents over-reported, rather than under-reported their income. “A simple approach that could reduce error by one-third would eliminate the distinction between free and reduced-price benefits, since much program error results from misclassification,” they said.”We could also build on current federal initiatives such as direct certification to improve NSLP certification accuracy.”

Under this policy, now required in all districts, households receiving benefits from other federal programs with more rigorous income-verification requirements are automatically eligible for NSLP. The U.S. Department of Agriculture is also considering using existing surveys to estimate the proportion of eligible children in selected schools, and then developing schoolwide reimbursement rates. This would eliminate the need for districts to certify households through the current process.

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