N.J. authorities say school lunch fraud strikes (again) in Elizabeth, but it’s a huge national problem

TRENTON, N.J. – Around 20 million kids nation-wide get free or cheap lunches every year through the National School Lunch Program. Here in New Jersey, thousands of kids receive lunches subsidized by John and Jane Taxpayer through the state program

Anything that big is bound to produce waste and fraud, but it’s an institution which appears uniquely susceptible to both problems… on steroids. 

Just this week, four individuals were charged in Elizabeth, New Jersey for allegedly fraudulently enrolling their kids in that district’s program. The authorities say the defendants cumulatively under-reported $925,000 to garner $7,000 in benefits to which they were not entitled. 

No one paying attention is surprised. Charges have come down in Elizabeth before for similar offenses. In 2013, the State Comptroller found rampant abuse across the state. And yes, this sort of fraud impacts New Jerseyans’ property taxes.

“Year after year, we keep finding people who are willing to commit fraud to get their kids free or reduced-price lunches at school that they are ineligible to receive,” said state Senator Steven Oroho (R-Sussex). “These cases of fraud cost taxpayers much more than just a few dollars for a lunch. In fact, billions in State school aid allocations are based, in part, on a flawed school funding formula that uses enrollment in the lunch program as a key metric of poverty. As long as we tie State school aid to a number that can be manipulated at the district level, we’ll never have an equitable distribution of funding to the districts that deserve it.”

It’s not just a New Jersey problem. More than one audit has claimed finding billions of dollars across all 50 states in cumulative fraud. School lunch program waste is such a formidable problem that it was an early education action item of the then-nascent Trump Administration. At present, the Administration is  fighting Democrats over closing loopholes which have been exploited for fraudulent purposes in the past.

Back home in the Garden State, Senate Republicans want to end the practice where enrollment in the school lunch program triggers a controversial “at risk” designation for district students which, in turn, has the effect of gaming the school funding formula. Republicans want to switch over from using that self-reported (and therefore prone-to-fraud metric) to the federal small area income and poverty estimate.

“Since each student enrolled in the lunch program gets a school district thousands in extra aid that they otherwise wouldn’t get, districts have little incentive to strictly monitor applications for fraud,” explained Oroho who backs the measure which is part of a larger GOP school funding reform initiative . “Meanwhile, that fraud results in less State aid being available for districts that follow the rules to provide property tax relief to their residents. The Comptroller told us to fix this six years ago. We shouldn’t delay action on this critical reform any longer.”

At least one 2017 Republican legislative candidate is running on the issue.

“It’s unacceptable that adults are committing crimes to defraud the school lunch program and threaten the school funding formula, when there are plenty of children who actually NEED these programs,” tweeted Mike Testa, this fall’s GOP nominee for state senate in LD1 (Cape May, Cumberland, Atlantic). Testa reports fraud and waste costs South Jersey in the neighborhood of $4 million in aid. 

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