State reports significant fraud in free school lunch program

By Ellie Price
TheStatehouseFile.com

INDIANAPOLIS – An estimated one third of Indiana students receiving free or reduced-price lunches do not actually qualify for the federal program or their families failed to verify their eligibility, according to audits the Indiana Department of Education detailed for lawmakers on Monday.

Julie Sutton, director of school and community nutrition, discusses fraud regarding free and reduced-price lunches in Indiana. Photo by Ellie Price, TheStatehouseFile.com

Julie Sutton, director of school and community nutrition, discusses fraud regarding free and reduced-price lunches in Indiana. Photo by Ellie Price, TheStatehouseFile.com

Julie Sutton, the department’s director of school and community nutrition, told the Indiana Health Financial Commission that 47.5 percent of Indiana students receive the discounted meals.

That number has increased since lawmakers changed the formula that determines school funding to give more to schools with higher numbers of free- and reduced-lunch students, she said.

“If a third are misrepresenting their income, that’s a lot of dollars that are flowing from Indiana taxpayers,” said state Rep. Eric Turner, R-Cicero, a member of the commission.

The U.S. Department of Agriculture provides the funding for the school meal program but state taxpayers provide the revenue used for the school funding formula.

Families must provide a list of household members’ work earnings on an application for the meals, but they are not required to provide documentation, Sutton said.

Indiana school corporations must audit 3 percent of the families of free or reduced-price meal recipients. The Department of Education found that 33 percent of those audited do not meet the eligibility requirements or failed to answer questions about eligibility and were therefore dropped from the program.

Sutton said many school corporations would like to audit more applications, but are not allowed to after a change the U.S. Department of Agriculture made a few years ago.

“That 3 percent is a maximum,” Sutton said. “We’re not allowed to verify more.”

When school corporations find students who are receiving the meals but do not qualify, they take those students off the program. If families later wish to reapply, they must provide documentation.

“They’re stealing because they’re misrepresenting their income,” Turner said. “But we have no process for prosecuting those individuals.”

Each lunch costs approximately $2.50, and students who qualify can receive the meals for all 180 days of the school year.

The federal government pays for the Indiana Department of Education to administer the program, plus a per-meal rate for the households that qualify for free and reduced-price meals.

Members of the Health Finance Commission asked the education department to provide them with the number of audited cases per school corporation.

Ellie Price is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.

Clarification: This story has been clarified from its original post. Julie Sutton, the Department of Education’s director of school and community nutrition, told the Indiana Health Financial Commission that about one third of the free- or reduced-lunch applications  audited by schools led the districts to drop students from the program. That could be because the students were found to be ineligible or because their parents or guardians failed to verify their eligibility.
See all our clarifications and corrections at http://thestatehousefile.com/info/corrections/.
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