Program Improvement Expected From Integrity Initiative
Program improvement expected from integrity initiative
Fraud. Embezzlement. Money laundering. Those are the kind of things you might expect to find in a crime novel or television show – certainly not in a child care setting. But that is exactly what has been found in nationwide audits of the Child and Adult Care Food Program (CACFP) over the last few years.
The USDA Office of Inspector General (OIG) has conducted audits of the CACFP in 20 states since 1996 and found abuses such as filing false claims, money laundering, forged signatures, improper use of food program funds and fraud.
In a nationwide sweep referred to as “Operation Kiddie Care” in 1998, the OIG first reported on significant weaknesses in program delivery. When the report was released, Inspector General Roger C. Viadero stated, “For this $1.6 billion-a-year program that feeds an estimated 2.4 million children annually, the temptation to cheat was too great and the controls to prevent cheating were too weak.” The OIG spotted several “warning signs that some agencies were acting more out of their own self-interests than the interests of the children they claimed to be feeding.”
In a March 1999 news release, USDA reported that 15 individuals had been indicted for program fraud. Of the 15, nine have pled guilty.
“This type of fraud which takes food out of the mouths of children will not be tolerated,” Viadero said. “The Office of Inspector General will continue to investigate and vigorously pursue prosecution of the criminals who defraud these programs.”
In April 1999, Tennessee Sen. Fred Thompson called on USDA Secretary Dan Glickman to take immediate action to halt the abuses that have plagued the CACFP. The nationwide abuse in the program has also been reported in the national news media. The attention is not likely to end until changes are made.
The OIG audits have focused on operations in family day care home sponsoring organizations and individual family day care homes. However, the impact of the findings has a far-reaching effect that also influences the operation of the CACFP in child and adult care centers.
These audit findings damage the entire CACFP and hurt the majority of caregivers who do a great job administering their programs. Sadly, the criminals are the ones who are posing a threat to all of the centers and family day care homes that operate honest programs, and offer quality, nutritious meals.
Nebraska Not Included in OIG Audits
So far, Nebraska child and adult care centers and family day care home sponsors have not been audited by the OIG. That doesn’t mean that it may not happen in the future. However, recognizing that such problems exist in other parts of the country has caused the Nutrition Services office of the Nebraska Department of Education (NDE) to take a pro-active approach to assure that similar results would not be found here.
As Integrity started becoming the new buzz word in the CACFP, the Nebraska Nutrition Services staff started to re-examine some practices and procedures that would strengthen the program, and hopefully, help prevent fraud and abuse in our state. Even though NDE’s vision emphasizes its role as a service agency, its role as a regulatory and enforcing agency cannot be ignored.
Education and Training
In July 1998, Nutrition Services implemented the first wave of changes designed to strengthen the management of center-based programs. We have long held the opinion that proper training and education are important factors for a successful child care feeding program. When NDE began the administration of the CACFP in Nebraska in 1986, annual training was held for child care centers. Technical assistance training was provided on-site with new centers. In the late 1980s, more frequent training was offered. Program growth became so significant that, in the mid-1990s, monthly training workshops were instituted.
Initially designed for new centers joining the CACFP, the monthly workshops not only include new centers, but new directors and new responsible individuals and principals. The workshops also serve as a resource for centers needing corrective action or refresher training. Alternating between Lincoln and Omaha, the workshops attract an average audience of 25 people each month. Workshops are also held each year in other locations such as Norfolk, North Platte, Kearney, Grand Island, South Sioux City and Scottsbluff.
With the beginning of the 1999 fiscal year, personnel from all new centers must complete the training workshop prior to the approval of the program agreement. The workshop includes three hours on record keeping, three hours on meal production records, nutrition and creditable foods. Centers claiming meals served to infants must also complete one-half hour training. At a minimum, the institution’s CACFP responsible individual/principal and/or contact person and the person(s) responsible for food service must complete this training prior to program approval. New responsible individuals/principals must attend training within four months of becoming the responsible individual/principal.
Meal Service Times
For Child and Adult Care Centers
Another change that went into effect in July 1998 was the establishment of meal service times in child and adult centers. Until that time, the federal regulations for the CACFP only provided guidelines for meal service times in outside-school-hours care centers. Since there had been no other guidance for meal service time, there were some centers offering a supper as early as 3:30 p.m. The Nutrition Services staff agreed that such an early serving time for this meal was a potential warning sign for abuse. After reviewing regulatory language that applies to other Child Nutrition programs, the following meal service times were established for center-based programs: 1) breakfast service must be completed by 10:00 a.m., 2) lunch service may be between 10:00 a.m. and 2:00 p.m., 3) supper service may be no earlier than 5:00 p.m., and 4) a minimum of three hours must elapse between the beginning of breakfast and the beginning of lunch.
Elimination of “Shift Care”
in Child and Adult Care Centers
Another potential area for abuse could occur when a center provides multiple shifts, such as the case of a 24-hour care facility. While our computer claims processing system is able to detect several errors in claims, allowing for shift care could permit the payment of potentially fraudulent claims without raising a “red flag.” The Nutrition Services staff spent several work sessions with the NDE Financial Services staff to develop a workable solution. We did not want to penalize centers that were claiming appropriate meals. Yet, we wanted to be able to monitor those claims with potential for overclaimed meals. Our claims processing system now filters out all claims in which average daily attendance exceeds licensed capacity. Each of these claims is manually reviewed with the figures the center reported in its agreement as the expected number of meals to be served at each meal service. Should this occur, these centers are required to maintain time-in and time-out records that document that the center did not exceed licensed capacity at any given time.
Responsible individuals and principals
Greater emphasis has been placed on the fiscal responsibility of the responsible individual and principal. This is the person (or persons) who signs the legal agreement between the institution and NDE. This is also the person who is allowed to sign claims for reimbursement. The responsible individual and principals are the people who are legally responsible for the receipt of all funds received from the CACFP.
In recent years, Nutrition Services and Financial Services have worked together to refine the system that assures that claims are paid only when authorized signatures appear on claims for reimbursement. The web based claims system provides each institution with a user ID and password so that those persons who have signed an agreement with NDE are authorized “signers” via the web based system.
The CACFP agreement now stipulates that institutions must notify NDE within 10 days of any change in responsible individual or principal or corporate structure and submit a new Certificate of Authority to Nutrition Services. Within the terms of the agreement, responsible individuals or principals and the owner and corporate official of the institution or sponsoring organization are agreeing to be held administratively and financially responsible for program operations. This is especially important when errors result in an overclaim.
CACFP Agreement Strengthened
The narrative agreement between institutions and NDE is a legally binding contract. The language in this agreement has been strengthened to spell out what is expected of participating institutions to comply with federal regulations. The revision of this agreement was a cooperative effort between Nutrition Services and the office of the NDE Legal Counsel.
Audits and Reviews
As a state agency, NDE Nutrition Services is required to do a minimum number of full-scale reviews of participating institutions each year. To meet this quota, all centers are on a three-year review cycle. This means your center will be reviewed by a member of the Nutrition Services staff once every three fiscal years. In some situations, reviews may occur more frequently.
In addition, for profit “Title XX” centers that receive more than $25,000 annually in CACFP funds are audited each year. Through a competitive bid process, NDE contracts with private auditing firms to conduct these audits.
If review and audit findings indicate areas needing improvement, the institution may be required to complete some type of corrective action. Types of corrective action may include attending CACFP training workshops, submitting records to document each month’s claim or on-site technical assistance may be provided by Nutrition Services to the institution.
Nutrition Services has also established an effective relationship with the Nebraska Health and Human Services System (HHSS). The two agencies have a reciprocal agreement to exchange information regarding CACFP and licensing violations. Food-related complaints in institutions participating on the CACFP are investigated by the Nutrition Services staff. In turn, Nutrition Services reports any observed licensing violations to HHSS.
Complaints are generally investigated by means of unannounced visits at an institution. In some cases, the complaints may not be legitimate. In those situations, our staff is always glad to be able to find that centers are in compliance with program regulations. If the complaints appear valid, additional unannounced visits or other means of corrective action may be warranted.
In the most severe cases, when an overclaim is assessed and the institution fails to repay the funds, the institution is declared “seriously deficient.” This means that the institution and the authorized representatives and, in some cases, other employees of the organization, are prohibited from participating in the CACFP anywhere in the U.S.
NDE has also received approval from USDA to hire a collection agency to attempt to reclaim funds that were overclaimed. Management Standards for Home Sponsoring Organizations
While strengthening the enforcement of CACFP regulations within centers in recent years, the operations in family day care homes and sponsoring organizations have also been examined.In 1997, USDA issued a Management Improvement Guidance for program improvement within family day care home sponsoring organizations. NDE took the challenge seriously and initiated a process for Nebraska’s eight family day care home sponsoring organizations to work together for program improvement. This process is described in an article by Jeany Morton of Family Service of Omaha. Nebraska is one of the smaller states, with only eight sponsors of family day care homes. Over the years, a relationship has been developed between the state agency and the eight sponsors which provides a spirit of cooperation. While some of these sponsors may be in competition with one another, over the past year, these individuals have worked together to develop a set of common management standards to which all sponsors can aspire.
Commitment to Service
This information is not intended to scare or threaten any participants in the CACFP. Our main goal is to continue to do what is best for children. Providing wholesome, nutritious meals is good for kids. The CACFP was originally created to provide meals for children from low-income households. The intent of the program is not in question. As a state agency, we want to assure that the CACFP funds continue to be used for the intended purpose – feeding children and, since 1987, adult care participants.We recognize that the majority of institutions and day care providers in Nebraska are operating within the guidelines established for the program. Our staff is committed to providing service to participants in the program. It has been our experience that overclaims are generally assessed based upon clerical and mathematical errors, rather than intentional fraud, cheating or other illegal practices. This is why our staff is dedicated to providing on-going training and technical assistance – through our monthly workshops, our toll-free telephone number and our web site. We want to make sure that all participants on the program receive the training and support necessary to operate a successful food program.While that remains a primary goal, our staff will also not shirk the responsibility of fully investigating potential fraud and abuse. CACFP has provided a valuable service for many years and we don’t want to see the entire program jeopardized because of the actions of a few.
What Lies Ahead?
It’s safe to say that Integrity will continue to be a focus of the CACFP well into the next century. As its commitment to program improvement, the USDA is spearheading a series of training sessions for state agency personnel across the country. The Mountain-Plains region of the USDA will host a two-day training session for personnel from 10 states at a conference in Omaha in October 1999. It’s expected that this training will be the impetus for ongoing improvements in the management and administration of the CACFP. You can be sure that NDE Nutrition Services will continue to work to provide a statewide program of quality meals for children and adults served by the CACFP.