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February 11, 2010

DiNapoli Audit Finds Overpayment in Child Nutrition Program

SED Authorized $124,446 in Inappropriate Payments to Private Schools

The New York State Education Department (SED) made more than $124,000 in unsupported or inappropriate payments to seven private schools as part of the State's Child Nutrition Program, according to an audit issued today by New York State Comptroller Thomas P. DiNapoli. Auditors identified more than $24,000 of this amount in deliberately modified claims by one school during the audit, which covered the period between April 1, 2004 and December 16, 2008.

"Sloppy bookkeeping wastes taxpayer dollars, DiNapoli said. "The Child Nutrition Program helps ensure eligible children receive healthy breakfast and lunch on schools days. You can buy a lot of lunches for $125,000. And our audit looked at just a representative sample of the program. SED has to do a better job to ensure that these funds are used appropriately.

The Child Nutrition Program was established under the federal National School Lunch Act and is administered by the State Education Department. The program reimburses groups of one or more schools (known as "authorities) for part of the cost of school meals, based on monthly claims submitted by members of an authority. DiNapoli's audit looked at $421,403 worth of claims paid to three authorities on behalf of nine selected New York City-based private schools, and found unsupported or inaccurate claims to two of the authorities.

DiNapoli's audit found:

  • More than 100 students in the program were ineligible for reimbursement because their families had not filed income eligibility paperwork;
  • Fifteen students claimed who were not on schools' attendance records;
  • One authority had invalid food stamp or public assistance identification numbers for 46 out of 48 applications reviewed;
  • Inappropriate changes of dates on income eligibility applications in order to claim reimbursements for an earlier period; and
  • Submission of claims by one school for reimbursement of snacks that were knowingly not provided to program children.

The three authorities examined were among nine that also received child care grants from the New York State Office of Children and Family Services, a program in which a previous audit had found extensive systematic fraud and abuse.

DiNapoli's audit recommended that the State Education Department:

  • Recover $124,446 in overpayment from the authorities;
  • Verify that claims paid to authorities are supported by income eligibility documentation;
  • Ensure that corrective action is taken to fix identified problems;
  • Audit the six remaining authorities that received child care grant funds to confirm that their payments are appropriate.

DiNapoli's auditors have identified other problems with public school nutrition programs, including direct violations of federal, State, and City prohibitions on selling junk food to students.

The State Education Department agreed with the audit's findings.

Click here for a copy of the State Education Department audit.

State Government Accountability
The Office of the State Comptroller regularly audits state agencies, public authorities and New York City agencies. Auditors ensure that programs achieve their established goals, funds are used efficiently and assets are adequately protected against fraud, waste and abuse. DiNapoli's office completes approximately 200 state audits annually and identifies hundreds of millions in savings and fraud each year.


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