Tennessee audit finds millions of dollars misappropriated for childrens’ meal programs
(Photo: Laura Olivas/Getty Images)
In the summer of 2020, with pandemic-driven unemployment surging across Tennessee, the state contracted with two Shelby County community groups to provide meals to children at risk for hunger in locations scattered throughout the county.
But when auditors with the Tennessee Comptroller’s office made surprise visits to check on the programs, they found no children — and no food being served — at 17 of the 21 promised sites.
The two nonprofits — Open Door and Alumni Music — are among the most recent examples of what auditors have described as “deceptive schemes” in child hunger programs overseen by the Tennessee Department of Human Services.
But they are not isolated instances.
State auditors have uncovered schemes involving millions of dollars in misappropriated funding intended to provide meals and snacks for poor kids over the past eight years in Tennessee — where one in four kids is at risk for hunger every day.
A spokesperson for the Department of Human Services, which oversees the nutrition programs, said that state officials continue to work closely with the nonprofits, churches, after-school clubs and other organizations that contract with them to provide food to “emphasize program training and program compliance.”
“We also continue to explore additional screening and monitoring options that comply with federal mandates and further strengthen the fidelity of these programs,” an email from Devin Stone, the spokesperson, said.
Department officials are also looking to add new technology that would better monitor organizations participating in summer food programs. “The intention is for the technology solutions to help minimize program errors and reduce program findings going forward,” she said.
The pandemic brought unique challenges. The longstanding nutrition programs took on a more significant role as education went remote, parents lost work and kids were left without the routine meals they got during the school day. The state agency issued waivers to allow the child nutrition programs to operate in nontraditional ways, including allowing meals to be delivered or taken to-go, contrary to the usual rules of the program.
“These waivers were intended to increase access to food while maintaining social distancing and promoting safety for the program operators and participants,” she said. “These waivers, however, also created some challenges for program operators and program monitors.”
DHS oversees two programs that provide meals and snacks to Tennessee children: the Summer Food Services Program, which distributed about $20 million in the last fiscal year to community organizations, provides meals and snacks to children when school is out over the summer months.
The Child and Adult Care Food Program provided $58 million in the 2021 fiscal year to year-round programs — after-school, church, boys and girls clubs and daycare centers among them — to feed children and some adults with disabilities. All of the funding flows from the federal government, but state agencies like DHS serve as the managers of the program, enrolling and vetting agencies who agree to provide food, paying invoices and monitoring for fraud.
While the majority of funding appears to work as intended — providing lunches, dinners and snacks for kids — the programs have proven to be easy targets for bad actors.
Altogether between 2020 and 2021, more than $141,000 in payments made by Tennessee officials to childcare centers, Boys and Girls clubs, churches and nonprofits that were supposed to provide federally-subsidized meals and snacks to low-income kids over the summer are now being questioned, according to the state audit released earlier this month.
An additional $216,000 in federal dollars is now in dispute for year-round food programs, after a review found missing paperwork, daily sign in sheets that were photocopied and re-dated to appear as if they included multiple different meal services and requests for payment for feeding more children than a site could physically hold.
A long history of fraud and poor record-keeping for the program in Tennessee has been uncovered by the Tennessee Comptroller and federal authorities that stretch back to 2014, when the department’s food program accounted for nearly 20 percent of serious deficiencies in federal funding management across state government.
A scathing 2015 audit found unscrupulous contractors were pocketing funds intended for hungry children. In one instance, a contractor spent money on lavish bonuses, home improvements and on-demand movies in hotels.
A federal examination in 2016 found multiple instances of lax oversight by DHS, including a failure to fire contractors who violated the program rules, a failure to recover over-payments and a failure to scrutinize how the money was spent and inadequate staff to oversee the program.
Between 2018 and 2019, the Comptroller’s office identified four organizations that submitted tens of thousands of dollars in questionable billing for food, including on days when surprise inspections found no children present.
Some of the failures identified are a result of poor documentation of providing meals to children, rather than outright fraud, but the Comptroller’s auditors noted that DHS is nevertheless responsible for sound fiscal oversight of nearly $80 million in taxpayer funding each year.
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