Thursday, December 18, 2014

UPDATE: Indictments in federally financed summer food program

Posted By on Thu, Dec 18, 2014 at 1:31 PM

click to enlarge FRAUD FOUND: By one provider of services under summer food program.
  • FRAUD FOUND: By one provider of services under summer food program.
The U.S. attorney's office has announced a news conference at 12:30 p.m. today to announce indictments related to "federal program fraud."

Rumors have been circulating for days about fraud in a federally funded program administered through the state.

UPDATE: Three people have been indicted for fraudulent billings in the USDA-financed summer feeding program to fight hunger among poor kids in a scheme that allegedly raked more than $1 million into the pockets of those indicted.

The indictment said Jacqueline Mills, a sponsor of feeding programs at three sites in Helena and Marianna, had received a total of $2.5 million in meal reimbursements, but the figure was inflated and covered up on account of her bribes to two state agency workers. The indictment also mentioned an unindicted co-conspirator who sponsored feeding programs in Dermott, Dumas, Eudora and Lake Village and ran a similar scheme.

The indicted operator, Mills, inflated the number of children served and paid bribes to two state employees to get inflated payments between 2012 and 2014. The result was transfers of $950,000 into her personal bank account, the indictment said.

The indictment said state agency worker Gladys King, 34, of England received $42,000 in payments from Mills and the co-conspirator. Tonique Hatton, 37, of North Little Rock until this week a supervisor in the state agency, received almost $190,000. They are named in a 76-count indictment. Said U.S. Attorney Chris Thyer: “As alleged in the Indictment, these three individuals and others were literally stealing money that was supposed to be used to feed poor and hungry children. While I am pleased that we were able to uncover and prosecute this behavior, I am at the same time sickened that it could happen at all.”

The three appeared before a magistrate today and pleaded not guilty. They were released on their own recognizance. A trial date was set Jan. 20, but I'd expect that to be delayed.

Here's the full indictment.
The Arkansas Human Services Department response is in hand. It identifies Jacqueline Mills, a Helena-West Helena operator of a summer food program. It notes the involvement of two department workers, Gladys King and Tonique Hatton, in the agency that oversees the program, the Division of Child Care and Early Childhood Education. Hatton, the one still employed, will be terminated, DHS said. The provider, Mills, had been ruled ineligible for the 2014 program after some charges for 2013 were questioned.

DHS said it had beefed up investigators as a result. The Department said the whole program would be reviewed. It is fully federally funded, with almost $11 million going in 2014 to 225 providers — churches, schools and other agencies — that served 3.875 million summer meals.

The DHS full response follows:

More than a year ago, the Department of Human Services (DHS) notified federal officials that it had identified a summer food provider by the name of Jacqueline Mills of Helena-West Helena as having possibly fraudulently billed the program. Since then, DHS has been working with and providing information to investigators from the Internal Revenue Service, the U.S. Department of Agriculture, the FBI and other agencies pursuing organizations that may have submitted falsified Summer Food Service Program billing records to DHS and any individuals who may have helped in those unlawful activities. (This program is overseen by the DHS Division of Child Care and Early Childhood Education’s (DCCECE) Special Nutrition Unit.)

This morning, DHS was notified by the U.S. Attorney’s office that Mills was indicted on charges of Conspiracy to Commit Wire Fraud, Wire Fraud, Paying a Bribe to an Agent of the State Agency Receiving Federal Funds. Former Special Nutrition Unit employee Gladys King and current DCCECE employee Tonique Hatton also were indicted. Both are charged with Conspiracy to Commit Wire Fraud and Receipt of a Bribe by an Agent of the State Agency Receiving Federal Funds.

King served as a Special Nutrition Unit program coordinator from May 2009 to December 2013, when she left voluntarily. Hatton, who was hired in June 2001, most recently worked as a program eligibility specialist in the DCCECE Family Support Unit, which determines eligibility for child care assistance.DHS has begun the process to terminate her.

DHS also has begun the process of placing Mills on the list of providers who are excluded from doing business with DHS until there is a resolution in her case. She was not paid for questionable costs associated with her summer food sites in 2013 and was denied a request to be a provider in 2014.

“It’s extremely disappointing to learn that people were reportedly cheating a program that feeds hungry children, especially in a state that has one of the highest rates of childhood hunger in the country,” said DHS Director John Selig. “We appreciate all the work to help us root out the bad actors so other providers can continue to ensure kids have adequate food when they aren’t in school.”

Selig said it was particularly disheartening to learn that current and former employees are alleged to be involved. With any growing program, he said people may look for ways to take advantage of its success. However, Selig said it is DHS’s responsibility to do as much as possible to prevent, detect and pursue program fraud, and he thanked employees who raised concerns about Mills.

As a result of the fraudulent activity uncovered, additional steps have been taken to strengthen the oversight capacity of the Special Nutrition Unit. The unit:

•Added five fraud investigators and three senior auditors
•Requested and received additional assistance from USDA to assist monitoring and sponsor review.
•Put in place new state policies for the Summer Food Service Program aimed at improving training and program management.
•Dedicated staff to oversee and assist sponsors with complying with state and federal procurement rules.
•Further segregated job duties to ensure that the employee approving billing is not also the one responsible for monitoring the program.
•Engaged the auditors with the DHS Office of Quality Assurance to help provide further case review as needed.
In addition to unit changes, Selig ordered DHS Office of Quality Assurance senior auditors to review the unit to identify any other weaknesses and additional ways to strengthen it. That review is ongoing.

DCCECE Director Tonya Williams said her staff is still working with federal authorities investigating fraudulent activity in the summer food program.

“We want to do everything we can to shore up the integrity of this important program because it has provided meals to children who may otherwise have gone hungry,” Williams said. “The misdeeds of a few should not take away from the strides the state has made toward reducing childhood hunger.”

Arkansas Summer Food Service Program and At-Risk Afterschool Program Fact Sheet

According to U.S. Department of Agriculture (USDA), 21.2 percent of households in Arkansas experience some level of food insecurity in 2013, making it one of the most food insecure states in the country. The federal government uses a variety of programs to help address food insecurity and hunger nationwide. Among them are the Summer Food Service Program and the At-Risk Afterschool Program.

Summer Food Service Program is 100 percent federally-funded program designed to address childhood hunger. It reimburses approved food providers for meals served to children in low-income areas across the state. Schools, churches, civic centers, local and state government facilities, daycares, nonprofits and summer camps can apply to be providers.

At-Risk Afterschool Program is 100 percent federally-funded program that reimburses approved food providers for meals served to children in low-income areas across the state. The meals include a snack and dinner and are coupled with educational programming. Schools, churches, civic centers, local and state government facilities, daycares and nonprofits can apply to be providers.

Summer …
Number of providers in Arkansas: 225
Number of meals provided: 3.875 million
Federal program expenditure: $10.9 million

At-Risk …
Number of providers in Arkansas: program ongoing
Number of meals provided: program ongoing
Federal program expenditure: program ongoing

Summer …
Number of providers in Arkansas: 195
Number of meals provided: 3.722 million
Federal program expenditures: $10.3 million
At-Risk …
Number of providers in Arkansas: 149
Number of meals provided: 8.237 million
Federal program expenditure: $19.1 million

Summer …
Number of providers in Arkansas: 187
Number of meals provided: 2.115 million
Federal program expenditures: $5.9
At-Risk …
Number of providers in Arkansas: 115
Number of meals provided: 3.076 million
Federal program expenditure: $7.6 million

Summer …
Number of providers in Arkansas: 138
Number of meals provided: 1.643 million
Federal program expenditures: $4.8 million
At-Risk …
Number of providers in Arkansas: 54
Number of meals provided: 971,311
Federal program expenditure: $2.9 million

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