USDA Investigation - False Claims

8/7/2019 USDA Investigation - False Claims

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USDA7'?::7iii

Distribution

United States Department of AgricultureOFFICE OF INSPECTOR GENERA L -IN VEST IGA TlONSMidwest Region

Chicago, ttltnots

REPORT OF INVESTIGATION

FILE NUMBER: Ch-2752-0029 DATE: M A Y 1 3 2 0 0 9TITLE: t.h U;)) b6)(C)

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CASE TYPE: False Claims

SPECIAL AGENT: C - - JIndianapolis, Indianar~ -

APPRO L JUE'N. SMITHSpecial Agent-in-Charge

l-Director for Grants Management Division, FNSI-Assistant Inspector General for Investigations, OIGI-File

This document is FOR OFFICIAL USE ONLY. It and its contents arenot to be distributed outside your agency, nor duplicated, withoutprior clearance from the Office of Inspector General, USDA.


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Ch-2752-0029SYNOPSIS

This investigation was conducted to determine if.LL- 'submitted false claims to the Indiana Department of Education (IDOE) forreimbursement of meal services under the United States Department of Agriculture(USDA), Food and Nutrition Service (FNS) Child and Adult Care Food Program(CACFP) and Summer Food Service Program (SFSP).Investigation disclosed from the period of February 19,2007 through April 30, 2008,L .:J purchased an adequate amount of milk to support the number of mealsthey claimed to the IDOE for reimbursement regarding the CACFP and SFSP for theperiod of February 1, 2007 through April 30,2008.t : . . . . _ - " 1 stated that Cldid not file false claims to the IDOE on behalf of L ~c.. .. :: 1 for reimbursement regarding the CACFP or SFSP.

BACKGROUND

Title 7 Code of Federal Regulations (C.F.R.) 225.16(d) states that in order for breakfast,lunch or supper to be a reimbursable meal for the SFSP, each meal must contain oneserving of milk; snacks claimed for reimbursement do not have to contain milk as acomponent.A review of records provided by the IDOE disclosed the following information:

J;-. ;.1 completed an application and was approved to participate as asponsor in the SFSP in FY2006 by the IDOE. The claims for reimbursement forthe program are filed electronically and list' ("_ ..? a s the contactperson. L ;::'sponsored 24 sites i~ FY 2006 and originally filedclaims for reimbursement totaling approximately L .:lOn November 6, 2006, as a result of an administrative review, the IDOE proposedthe termination and disqualification of t:. . . . : 1 and L ;::lparticipation in the SFSP. The IDOE determined that in FY 2006, y ; : , " ~c- : J . overstated their meal claims regarding the SFSP in the amount ofc; J This amount was based on t: .... . . . : 1 failure to maintainadequate and correct records; a significant number of meals did not meet mealpattern requirements; the number of meals claimed did not match the number ofmeals documented on the corresponding daily meal count forms; and the amountof meals claimed versus the amount of milk purchased.

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Ch-2752-0029

During an administrative hearing that took place in January 2007, E: . : : Jc .rwas able to provide additional invoices for milk purchases. As a result ofthe hearing.Y. ..:1 was ordered to repay and did repay the IDOEL "1C'} completed an application and was approved to participate as asponsor in the SFSP in FY 2007 by the IDOE. The claims for reimbursement forthe program are filed electronically and list L, . . : : - j as the contactperson. L~ ~J sponsored 22 sites in FY 2007 and originally filedclaims for reimbursement totaling approximately z, .JAs a result of an administrative review, the IDOE determined that in FY 2007,C. .1 overstated their SFSP meal claims in the amount of

C J. This amount was based on L _ ~ failure to maintainadequate and correct records; a significant number of meals did not meet mealpattern requirements; the number of meals claimed did not match the number ofmeals documented on the corresponding daily meal count forms; and the amountof meals claimed versus the amount of milk purchased. Administrative actionwas deferred at this time due to the ongoing investigation.C- . - : - J completed an application and was approved to participate as asponsor in the SFSP in FY 2008 by the IDOE. The claims for reimbursement forthe program are filed electronically and list L _ -: - , 3 as the contactperson. \:.._ . = : 1 sponsored 19 sites in FY 2008 and originally filedclaims for reimbursement totaling approximately L .)The IDOE determined that in FY 2008, (_ . - : : 1 overstated their mealclaims regarding the SFSP in the amount of t - : z This amount was basedon C--. :::J failure to maintain adequate and correct records; asignificant number of meals did not meet meal pattern requirements; the numberof meals claimed did not match the number of meals documented on thecorresponding daily meal count forms; and the amount of meals claimed versusthe amount of milk purchased.

CACFPTitle 7 Code of Federal Regulations (C.F.R.) 226.20 states that in order for breakfast,lunch or supper to be a reimbursable meal (in child care centers) for the CACFP, eachmeal must contain one serving of milk; snacks claimed for reimbursement do not have tocontain milk as a component.

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Ch-2752-0029A review of records provided by the IDOE disclosed the following information:

C .J signed a contract with the IDOE in order to participate as asponsor for the CACFP in FY 2006. The claims for reimbursement for theprogram are filed electronically and list L . . . : 1 as the contact person.C. .. . . J sponsored 10 sites in FY 2006 and originally filed claims forreimbursement totaling approximately c . . ]L" ' : : 1 signed a contract with the IDOE in order to participate as asponsor for the CACFP in FY 2007. The claims for reimbursement for theprogram are filed electronically and list C- -:l as the contact person.C. . : : J sponsored 12 sites in FY 2007 and originally filed claims forreimbursement totaling approximately (:}On September 19,2007, IDOE proposed the termination and disqualification ofC- . : : : l participation in the CACFP. As a result of an administrativereview, the IDOE determined that C- - : . : : l overstated their claims formeals and snacks in the amount of'L J This amount was based on c . . . . . : : . JC .:: l inadequate and incorrect record keeping and the miscalculation ofmeals and snacks claimed for reimbursement.On October r5, 2007, IDOE agreed to deduct c ' , ~ from r'. . : : : : tclaims for reimbursement for the months of October 2007, November 2007,December 2007, January 2008 and February 2008. Any remaining balance duewould be deducted in one payment from the March 2008 claim. To date, C- ~dL .. .:::lhas repaid the L ""')plus a C 'l rate of interest.C- " : : : :1 signed a contract with the IDOE in order to participate as asponsor for the CACFP in FY 2008. The claims for reimbursement for theprogram are filed electronically and list c-- .::las the contact person.

C-- ~ sponsored II sites in FY 2008 and originally filed claims forreimbursement totaling approximately c .:/

18 D.S.C. 666 - Theft Or Bribery Concerning Programs Hccciving Federnl FundsC ...-:1stated (Exhibit 1) thatll did not over-inflate t1claims for

reimbursement to the IDOE regarding tjparticipation in the CACFP or SFSP.C. _ -: 1 further stated that [ .1 would provide the original receipts for milkpurchased by C -] in order to support the claims for reimbursement [ ]submitted to the IDOE on behalf of L ~but declined to provide anyadditional info rm atio n .

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Ch-2752-0029C . : : J provided receipts for milkpurchased from CLOVER CREST DAIRY,Hobart, Indiana for the period of February 19, 2007 through April 30, 2008. A review ofthese receipts by the Reporting Agent (RA) (Exhibit 2) disclosed that L : : : : lpurchased " i. > . ' _ ' } , carton/units of milk.C-- ~~ c : . : ] , stated (Exhibit 3) that theinvoices provided by .C .J regarding the milk purchased by C -: :Iappeared to be original invoices generated by the dairy and mailed to c : : . - = rA review of records by the RA obtained from the IDOE for the period of February 1,2007 through April 30, 2008 disclosed (Exhibit 4) that L _-:1claimed a totalof h. : J . meals for reimbursement for the SFSP and the CACFP.

Agent's Note: Snacks claimed for reimbursement by C , .. : : : I were notincluded in the above meal count due to the fact that s~s may be submitted forreimbursement without having milk as a component.

t = - . - : : : J Office of School and Community Nutrition, IDOEstated (Exhibit 5) that based on their administrative reviews regarding the SFSPconducted for FY 2007 and FY 2008, the IDOE would assess C .:J with amonetary penalty of and propose termination and disqualification for C-. - = : !C-- ;.:1and C . . . .:! regarding the SFSP program. L - - .. :J further stated thatthe administrative review's of C. . : : : J participation in the SFSP disclosednumerous findings including but not limited to meals claimed for sites before they wereapproved and after school started; failure to provide adequate training to staff; and failureto maintain and provide the proper documentation to support the meals claimed.

~ , , . . : : J Office of School and Community Nutrition,100E, stated (Exhibit 6) that once L . : : 1 and k _ : : 1 wereterminated and disqualified from the SFSP; t: . . . . : J and 'L- : : : J wouldautomatically be removed from the CACFP program.An Assistant United States Attorney for the Northern Judicial District ofIndiana hasdeclined this case for prosecution.

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Documents

USDA Investigation - False Claims