CPS’ free lunch program plagued by fraud

Illinois’ education financing system is rife with poorly designed policies.

Josh Dwyer
Director of Education Reform

Illinois’ education financing system is rife with poorly designed policies. In fact, its single biggest expense – the General State Aid, or GSA – financially rewards districts for behaviors such as artificially lowering their property tax values and maintaining low attendance.

Unfortunately, even relatively straightforward policies – such as the free and reduced-price meal program – are convoluted and deeply dysfunctional.

The Inspector General of Chicago Public Schools, or CPS, recently released a 2012 Annual Report that shows falsified free and reduced-price meal applications are the rule, not the exception – especially in Chicago. In fact, a brief scan of 1,000 CPS cases showed that “an astonishing 707 recipients – nearly 71 percent – had their benefits decreased” due to application violations.

Among those falsifying their information were 55 CPS employees, including principals and assistant principals.

According to the Inspector General, “the possibility of systemwide fraud” is very high given that census data suggests CPS student eligibility for the program should be around 67 percent – about 20 percent lower than what it currently is.

Why is this rampant abuse occurring?

First, the United States Department of Agriculture, or USDA, prohibits districts from verifying a parent’s income when they apply for the program. The district is only allowed to analyze 0.3 percent of total parent applications every year to test if they are accurately filling out their applications.

Second, millions of dollars in federal funding, including Title I grants that are aimed at helping improve academic achievement among disadvantaged students, are all tied to enrollment in the free and reduced-price meal program. The more students a district signs up, the more money it receives.

CPS could have opted to participate in a USDA program that would have based the federal meal reimbursements on student participation in the Supplemental Nutrition Assistance Program, or SNAP, and the Temporary Assistance for Needy Families Program, or TANF – both more reliable measures.

But why would it, when there is a high probability that it would lose millions of dollars in funding?

Clearly, the district needs to reform the free and reduced-price meal program. Parents’ incomes need to be verified. Districts need to thoroughly audit who is enrolled in the program.

Instituting these straightforward reforms would be a step in the right direction for a state that most people assume can’t do anything right.

In the coming months, I’ll be releasing a more detailed look at many other aspects of waste and fraud found in Illinois’ education finance system.