"Serious Irregularities" Found in Food Programs

September 3, 1999

A nationwide audit of USDA"s child and adult food programs concludes "some disreputable private nonprofit organizations" have "enriched themselves at the expense of the children and adults there were supposed to feed." There have been 31 criminal investigations as a result of the inspector general's findings.

When the IG reviewers looked into the activities of some sponsors, they found underlying criminal activities, such as setting up fictitious day care homes with fictitious names of children, putting relatives on the payroll who were not working and "extorting the funds from legitimate day care providers," USDA says.

Based on the investigations, 44 individuals have been charged with defrauding the program, and 26 of them have been sentenced for convictions. Some individuals received lengthy prison terms. More than $18,000 in fines were levied, $4.2 million in restitutions and $1.1 million in forfeited assets were ordered by the courts.

"The child and adult care food program is an example of a well intentioned program which, when left in the hands of some disreputable individuals, can result in millions of dollars being diverted from the children the program is intended to benefit," says IG Roger C. Viadero. "We found that the primary control over the funds had been left with these sponsors."

Since mid-February, when the report was completed, OIG "has continued to find more problem sponsors and program abuse. We believe that the changes to the program recommended in this report are urgently needed to prevent even one more sponsor from abusing this important nutrition assistance program," Viadero adds.

About $1.7 billion is provided each year to serve meals to about 2.4 million children and adults through nonprofit organizations, or sponsors.