Tennessee DHS children's food program again under scrutiny
The state’s $80 million program to provide meals and snacks to children at risk for hunger is again coming under scrutiny for fraud, waste, abuse — and a lack of oversight by the state agency in charge of it.
The Department of Human Services administers the program, which channels federal funds to churches, nonprofits and recreational programs to feed low-income children. During the summer, when school is out, it is one of the only sources of nutritious food available to children growing up in Tennessee's deepest pockets of rural and urban poverty.
A federal review issued last month 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. The review also found there is a lack of adequate level of staffing to properly oversee the program. The department currently has three open positions for department auditors who are supposed to review the program for waste, fraud and abuse. The position of Inspector General, which previously oversaw all oversight of fraud and abuse, is now part of the duties of the Deputy of Finance and Administration.
DHS also failed to notify the Department of Health about the contractors who were eligible for a separate program that could have provided free commodities like cheese and milk to children last year.
The findings come less than a year after a scathing audit by the Tennessee Comptroller and a subsequent investigation by The Tennessean, which found unscrupulous contractors in some cases 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.
In previous instances, The Tennessean investigation found that out-of-state operators, some with fraud convictions in others states, moved to Tennessee to participate in the program only to pocket payments without documenting whether children were fed. After reviewing a small sample of the DHS food contractors, the Comptroller questioned $1.8 million in payments in 2014 and $4.3 million in 2013. DHS officials have noted in some cases the questioned payments may have simply included administrative errors rather than evidence food was not making its way to children.
DHS’ former food program director, Carmen Gentry, resigned in July, saying the program was understaffed, poorly trained and had no working computerized monitoring system despite her repeated requests to DHS leadership. She also alerted federal authorities.
Lawmakers are now weighing a measure to place DHS under tighter reins.
“As a legislative body we need oversight of this program to make sure (contractors) are getting food to the children who are supposed to be getting the food,” said state Sen. Jim Tracy, a Shelbyville Republican.
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Tracy's bill to require regular reports to lawmakers by DHS has received approval from the Senate and is making its way to the House for a vote as early as next week. The measure would also require agencies who participate in the food program to have a performance bond to guarantee if money is misspent, the state can be reimbursed.
In response DHS chief Raquel Hatter has told lawmakers her agency is entering into a renewed partnership called the "No Tennessee Child Goes Hungry" campaign with the USDA to better monitor the program.
Despite the program flaws, DHS increased number of meals to children by 150,000 in the summer of 2014 and last year purchased a case management system to "improve program integrity," Hatter said.
Hatter noted that the design of the federal program makes it prone to fraud and waste, since it errs on the side of feeding children.
"While we are very excited on the path we are on in improving integrity in the food program … inherent challenges regarding fraud, waste and abuse will remain in part due to" those design flaws, Hatter told lawmakers.
The problems in Tennessee have worsened since 2012, when an annual review by the Comptroller found no serious problems. By 2013, the annual review highlighted a series of problems with food program oversight that were even worse in 2014. In that year, DHS' food program accounted for nearly 20 percent of serious deficiencies across state government — earning 14 of 64 major program findings across all of Tennessee's departments.
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Reach Anita Wadhwani at 615-259-8092 or on Twitter @AnitaWadhwani.