06/04/2025 - JEFFERSON CITY, Mo.
The misuse of millions of dollars reimbursed from two
federal food programs managed by the state to organizations such as New Heights
and Sisters of Lavender Rose led to federal indictments, and now a new report
released by Missouri State Auditor Scott Fitzpatrick details how lacking
oversight by the Missouri Department of Health and Senior Services may have
played a significant role in allowing the fraud to be perpetrated. The audit
released today gives the department a rating of "fair" for its
management of both the Child and Adult Care Food Program (CACFP) and the Summer
Food Service Program (SFSP).
"There is no doubt the COVID-19 pandemic resulted
in these programs expanding significantly, which produced a huge spike in the
amounts they were reimbursing and made it much more difficult to monitor the
number of meals served by programs that were receiving these reimbursements. And
while the federal government may not have strong oversight requirements for
these funds, this is the Show-Me State and there is no question the Department
of Health and Senior Services could have done a much better job of showing us
that it takes oversight of these programs seriously. Had the department done a
better job reviewing the estimates provided by organizations like New Heights,
it would have significantly reduced the risk of reimbursing fraudulent
claims," said Auditor Fitzpatrick. "I urge the department to take our
recommendations to heart and to make substantive improvements that can protect
the millions of dollars provided through these food programs to ensure they are
going to feed those in need and not to line the pockets of unscrupulous actors."
The audit details how the Bureau of
Community Food and Nutrition Assistance (BCFNA) does not adequately monitor, or
safeguard against, potentially ineligible reimbursement payments. The report
notes sponsors participating in both the Child and Adult Care Food Program
(CACFP) and the Summer Food Service Program (SFSP) could be terminated in one
of those programs for violations of program regulations, but not have program
claims in the other program reviewed for propriety or potentially recouped. A review of claims for 6 sponsors terminated
from the CACFP totaling $1,711,752 (33 percent of total reimbursements the
sponsors received) notes the BCFNA determined there were $1,702,597 in
overpayments (99.5 percent payment error rate) for the claims reviewed. These
same 6 sponsors were paid reimbursements of $18,248,441 from the SFSP over the
same timeframe that were not reviewed. Similarly, a review of 4 claims for sponsors
terminated from the SFSP totaling $724,212 (34 percent of total reimbursements
the sponsors received) notes the BCFNA determined there were $515,213 in
overpayments (71 percent payment error rate) for the claims reviewed. These
same 4 terminated facilities were also paid reimbursements of $678,169 from the
CACFP over that timeframe that were not reviewed. In all cases, even though the
BCFNA terminated the sponsors in both programs, it only reviewed the prior reimbursements
claims for one program and not both to determine if similar eligibility issues
existed in those claims. The report notes the identification of deficiencies in a
sponsor's procedures in one program increases the risk of additional
deficiencies in other claims and in other programs.
The report also found the monitoring
policies and procedures used by the BCFNA do not require timely action by the
agency and allow sponsors with significant weaknesses identified through
monitoring visits to continue submitting claims for extended periods without
further follow up. As a result, ineligible claims can be paid up to 12 months
before initial subsequent monitoring takes place, and potentially an additional
12 months of additional ineligible claims would be allowed before the sponsor
was terminated from the program. A review
of monitoring visits found one facility that failed multiple monitoring visits
with 100 percent overpayments that was allowed to continue to submit
potentially ineligible claims without timely follow up. In total, this facility
received $13,706 in reimbursements between the 100 percent overpayment
monitorings that were not reviewed, and also received $13,256 in reimbursements
from their last failed monitoring through when the facility was eventually
terminated.
Additionally,
the audit finds the BCFNA needs to improve its controls over reimbursements for
both programs. The report notes that during the COVID-19 pandemic, information
was submitted by the sponsor regarding the number of allowable meals they
provided, but this information was not verified by the BCFNA for reasonableness
or accuracy. If they had verified the information, the BCFNA would have had
reliable edit checks that would have triggered a review when a sponsor submitted
overstated program reimbursements. Having these sorts of checks in place would
have helped to prevent the alleged fraud committed by New Heights and Sisters
of Lavender Rose.
The
final finding in the report notes that over a three-year period the BCFNA
discovered 3 facilities were inappropriately using Supplemental
Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families
(TANF), or Special Supplemental Nutrition Assistance for Women, Infants,
Children (WIC) funds to pay for groceries
while also seeking reimbursement from the CACFP and the SFSP, which is a
violation of federal regulations. While DHSS
officials indicated they had reported the WIC payments to personnel in the
Bureau of WIC and Nutrition Services within the Division of Community and
Public Health, they had no documentation of their notification of the SNAP and
TANF payments. The audit recommends the department report all potential fraudulent use of other
programs to the appropriate administering agency, and maintain supporting
documentation of such reports pursuant to Missouri State and Local Records
Law.
The
full report for the audit of the Department of Health and Senior Services -
Child and Adult Care Food Program and Summer Food Service Program is available here.