Is cheating in the national school lunch program fact or fiction? That was the question probed by Republicans during a joint legislative committee Tuesday afternoon.

In recent months, the question of fraud in the federal government’s second largest nutrition entitlement has reached critical mass in Illinois and Georgia, where school officials are trying to weed out cheaters. In North Carolina, the response has been more hushed, although some lawmakers are skeptical of the current structure that relies on applicants’ honesty in reporting their income to qualify for the program.

“In the state of North Carolina last year, were there any prosecutions for fraud for getting free and reduced-price lunch when you were not eligible?” asked House Majority Leader Paul “Skip” Stam, R-Wake, during the committee meeting.

“I’m not aware of any prosecutions,” replied Lynn Harvey, section chief for Child Nutrition Services at the State Department of Public Instruction.

Administered by the U.S. Department of Agriculture at an annual cost of $10 billion, the free and reduced-price lunch program is meant for low-income families. Children living in households at or below 130 percent of the federal poverty level (about $31,000 for a family of four) qualify for free meals at school; those in households between 131 percent and 185 percent (up to about $43,000 per year for a family of four) qualify for reduced-price meals.

The catch: Because parents or guardians are required only to self-report their income on applications, and no proof of earnings is necessary, there is room for accidental mistakes or purposeful fraud. As a small remedy, federal law requires school districts each year to verify the incomes of roughly 3 percent of participants considered “error prone,” meaning households whose reported earnings are within $1,000 yearly of the income eligibility limitation.

The USDA has threatened to cut off school-lunch subsidies to district that perform audits beyond the 3-percent requirement, a step that left Stam puzzled. “Why would any government bureaucrat want to limit the number of verifications?” he asked.

Harvey answered that school districts can verify for cause if officials believe that a particular family is cheating. She encouraged lawmakers, or their constituents, to contact local school officials if they believe a participant is ineligible to receive the benefits.

As Carolina Journal has documented, targeted reviews of applicants enrolled in the program suggest that fraud does exist, potentially on a widespread basis. The problem is confounded by the fact that schools and school districts benefit monetarily from having more students in the program, providing an incentive to enroll more students.

Cheaters arrested

Outside the Tar Heel State, the question of school-lunch fraud is heating up. In Albany, Ga., two school employees and one spouse have been arrested for putting allegedly falsified information on applications for free and reduced-price lunch.

In November, elementary school principal Gloria Baker “was suspended without pay after she was arrested for failing to report her $90,000 salary on school lunch forms,” reported WALB-TV in southwestern Georgia. Baker’s husband also was arrested.

More recently, Dougherty County school board member Velvet Riggins faced one felony and two misdemeanor counts for falsifying information on school-lunch applications.

‘Ripe for fraud’

Meanwhile in Chicago, a report by the school district’s inspector general reported that 15 public employees falsified applications at one high school, leading to the conclusion that cheating “is a serious, and possibly systemwide, problem.”

“[It] is clear that the meal application process is ripe for fraud and abuse,” the report found.

The findings prompted U.S. Sen. Dick Durbin, D-Ill., to write a letter calling on the USDA to work more closely with school districts to reduce cheating.

“Unfortunately, some adults abuse the [school lunch program] by intentionally submitting false information in order to enroll their children into the program,” Durbin wrote. “In light of the strained local, state, and federal budgets, it is critical for the USDA not only to ensure eligible children participate in the [school lunch program], but also to identify and address fraud in the program.”

Foot-thick regulations

Congress recently had an opportunity to shore up federal guidelines and allow school districts to conduct more thorough audits of the lunch program, but lawmakers punted. Instead, they reauthorized the entitlement for another decade, at an additional cost of $4.5 billion, and expanded the pool of eligible students.

At the education oversight committee meeting on Tuesday, state Sen. Dan Soucek, R-Watauga, told Harvey that he was concerned about all the red tape in the program.

“One thing that struck me from the very beginning, as you were introducing the slides and going through the regulations and the bureaucracy and reports, it took almost two minutes to just describe the system,” Soucek said. “It really did show the size of government and the size of the bureaucracy here.”

“I glanced at the regs before I walked out of the building and assessed them to be about 12 inches in depth,” Harvey replied.

David N. Bass is an associate editor of Carolina Journal.