[Congressional Record (Bound Edition), Volume 146 (2000), Part 6]
[Extensions of Remarks]
[Page 8986]
[From the U.S. Government Publishing Office, www.gpo.gov]



   COMBATING FRAUD AND ABUSE IN THE CHILD AND ADULT CARE FOOD PROGRAM

                                 ______
                                 

                        HON. WILLIAM F. GOODLING

                            of pennsylvania

                    in the house of representatives

                         Tuesday, May 23, 2000

  Mr. GOODLING. Mr. Speaker, today I am introducing legislation to 
combat fraud and abuse in the Child and Adult Care Food Program 
(CACFP). Since 1975, when the Child and Adult Care Food Program became 
a separate program under the National School Lunch Act, it has provided 
nutritious meals and snacks to children in day care facilities and 
family day care homes. It operates in 37,000 day care centers and 
175,000 day care homes.
  Unfortunately, in recent years there have been reports of widespread 
fraud and abuse and deficient management practices in the program. This 
has meant that the full value of nutrition benefits the program 
delivers has been denied to many participating children. Sadly, funds 
that could be better used to serve children have ended up in the hands 
of unscrupulous program sponsors and care providers.
  Hopefully, this bill puts an end to this practice. We owe it to the 
approximately 2.7 million children participating in this program to end 
the fraud, abuse, and mismanagement that is depriving them of the 
nutritious meals.
  In August, 1999, the Office of the Inspector General (IG) at the U.S. 
Department of Agriculture (USDA) issued a report outlining fraud and 
abuse in the Child and Adult Care Food program. This report, 
``Presidential Initiative: Operation Kiddie Care,'' found that the 
program was highly vulnerable to abuse because most of the controls for 
combating fraud were vested in CACFP sponsors without any federal or 
state oversight. The IG found that some sponsors were using program 
funds for personal use and depleting the funds available to provide an 
effective food service program to children in day care.
  Three months later (November, 1999) the General Accounting Office 
(GAO) issued their report, entitled, ``Food Assistance: Efforts to 
Control Fraud and Abuse in the Child and Adult Care Food Program Should 
Be Strengthened.'' The GAO report found that the Food and Nutrition 
Service (FNS) had not effectively directed the states' efforts to 
protect against fraud and abuse. According to the GAO, state agencies 
claimed that a lack of resources, inadequate training in the 
identification of fraud and abuse, and unclear regulations on the 
removal of noncompliant sponsors were among the reasons why they could 
not strengthen the amount of control over the fraud and abuse.
  To address the issues raised in these two reports, I have worked with 
the Early Childhood, Youth, and Families Subcommittee Chairman, 
Congressman Mike Castle, and his Ranking Member, Congressman Dale 
Kildee, the nutrition community, and the Department of Agriculture to 
develop a proposal that will address many of the concerns raised by the 
IG, the GAO, and the nutrition community. The legislation outlined 
below will go a long way toward ending fraud and abuse in the Child and 
Adult Care Food Program. Key provisions of this proposal would:
  Require USDA to develop a plan for ongoing periodic training of state 
and sponsor staff on the identification of fraud and abuse in order to 
ensure that current and new employees can assist in efforts to prevent 
fraud and abuse.
  Require a minimum number of unannounced and scheduled site visits. 
These visits would be in addition to site visits to program sponsors 
and providers with a bad record or where there is a suspicion of fraud 
and abuse.
  Permit the secretary to withhold, in whole or in part, state 
administrative funds in instances where states have not met their 
responsibilities for oversight and training for sponsors and providers.
  Provide notification to parents that their children are enrolled in a 
child care center or group or family day care home participating in the 
CACFP Program. This provision will allow parents to take action if they 
suspect fraud and abuse and to understand the benefits their children 
should receive under CACFP.
  Bar the recovery of funds lost due to fraud and abuse from food 
dollars which benefit participating children.
  Make it clear that sponsors applying for participation in CACFP must 
meet specific qualifications and will not automatically approved. 
Require the development of detailed criteria for approving new sponsors 
and for renewing sponsors which would include factors such as whether 
or not they are capable of performing the job, have appropriate 
business experience and adequate management plans, and whether or not 
there is a need for an additional sponsor in a specific area.
  Limit administrative costs for sponsors of day care centers to 15 
percent of the funds they disburse to decrease the potential for abuse.
  Require USDA, working with states and sponsors, to develop a list of 
allowable administrative costs for sponsors of family day care homes 
and child care centers.
  Require the Department of Agriculture to establish minimum standards 
regarding the number of monitors sponsors should employ to ensure there 
are sufficient monitors to visit providers and detect fraud and abuse.
  Require state agencies that administer CACFP to deny approval of 
institutions determined to have been terminated with cause or that lost 
their license to operate any federally funded program.
  Limit the ability of day care homes to change sponsoring 
organizations to once a year unless they can demonstrate they are 
transferring for good cause.
  Require the return and reallocation of non-obligatory CACFP audit 
funds to the secretary for reallocation to other states with a 
demonstrated need for additional audit dollars.
  Require sponsors to have in effect a policy that restricts other 
employment by employees that interferes with their responsibilities and 
duties with respect to CACFP.
  Require the secretary to develop procedures for terminating sponsors 
for unlawful conduct and failure to meet their agreements with the 
state.
  Provide for the immediate suspension of sponsors and providers in 
cases where there is a health or safety threat to participating 
children.
  Finally, it appears that this bill will result in a small amount of 
savings in mandatory spending. It is my intention to work closely with 
Congressman Kildee and others to ensure that these resources are used 
in a responsible way. In particular, In particular, we should explore 
ways to use these savings to improve the health and maintenance of 
those served by federal nutrition programs.
  Mr. Speaker, I want to thank Chairman Castle, Congressman Kildee, the 
U.S. Department of Agriculture, and the nutrition community for working 
with me to develop this proposal. We created the Child and Adult Care 
Food Program to benefit children, not line the pockets of unprincipled 
sponsors and providers. I believe the bill we are introducing today 
will ensure that the program works the way it was originally intended. 
Most importantly, it will give the states and the Department of 
Agriculture the tools they need to attain the goals set for the 
program. I urge my colleagues to support this important legislation to 
put an end to the waste, fraud, and abuse that has plagued this 
program.

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