NCPA - National Center for Policy Analysis

Millions Being Stolen From Federal Day Care Programs

October 4, 1999

Officers of many nonprofit organizations which use federal money to feed poor children are ripping off millions of dollars and enriching themselves, according to Department of Agriculture inspectors. The organizations were found to be filing false claims and padding their reports concerning the number of children they are serving at day care centers.

  • The federal government spends $1.7 billion a year to provide meals for 2.4 million children in day care.
  • Criminal charges have been filed against 44 participants in the Child and Adult Care Food Program -- with 28 of them having been convicted or entering guilty pleas so far.
  • Officials report that day-care providers and their sponsors have been "submitting false claims on a grand scale" with some engaged in "money laundering, embezzlement, forgery and extortion."
  • In some cases, sponsors retained as much as 15 to 30 percent of the food money entrusted to them for child-care centers.

Federal inspectors believe the problem lies in basic flaws in the program's structure and accuse other federal officials of not moving fast enough to root out cases of fraud. Agents made more than 3,200 unannounced visits to private day-care homes and child-care centers after receiving a tip about problems at a center in California.

A nutrition officer for the state of Arkansas blames the U.S. Agriculture Department for being "in the business of shoveling out money with little or no accountability."

Source: Robert Pear, "Nonprofit Groups Accused of Bilking a Lunch Program," New York Times, October 3, 1999.


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