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VOL. 39 | NO. 28 | Friday, July 10, 2015
State audit uncovers millions in questionable spending
NASHVILLE (AP) — An audit of the Tennessee Department of Human Services found a lack of oversight led to at least $1.8 million in questionable spending last year from contractors operating programs to feed the needy. In 2013, the questioned costs were $4.3 million. And that is just in the small sample of agencies auditors reviewed.
The Tennessean reports (http://tnne.ws/1Jcx637) the programs where the questionable spending occurred are the Child and Adult Care Food Program as well as a summer food program for children.
In operating the programs in Tennessee, DHS distributes close to $80 million in federal dollars each year to contractors providing snacks and meals to day care centers, mobile lunch buses, emergency shelters and recreational programs. They feed 180,000 Tennessee children during the school year and 42,000 children each day during summer months. About 1,200 adults in adult day care also benefit.
State Comptroller Justin Wilson said the results of his office's investigation are "extremely troubling."
"DHS management had not ensured that critical controls and effective practices were in place and operating as needed," the audit found. A lack of oversight "threatens the integrity of the programs."
DHS defended its conduct in a response to the audit that states the program is heavily reliant on "the honor system and good faith."
DHS spokeswoman Stephanie Jarnagin, in a written response to questions, said the department believes most contractors want to do the right thing, but risks of fraud, waste and abuse exist with the program even when DHS does everything it can to prevent them.
"It is our hope that the plight of Tennessee's children will not be lost as we work with our federal partners to improve inherent and longstanding challenges of these food programs that children in Tennessee and across the country so desperately need," she said.
Oversight of the program has been a problem not just in Tennessee, but across the country, stretching back decades. In 1999, the federal General Accounting Office found that opportunities for waste, fraud and abuse were woven into the design of the program.
At least one Tennessee contractor is facing charges as a result of the comptroller's audit. ABC Nutrition Services, of Benton County, is accused of using federal money for numerous unauthorized expenses including more than $400,000 in bonuses between 2009 and 2014.
CEO Vivian Parker and her daughters Lisa Carter and Tracy Coady were indicted on theft charges Feb. 19 by a Benton County grand jury. No trial date has yet been set.
Jarnagin noted that the questionable spending found by state auditors still has to be vetted before it is known whether the money was really misspent. And some of the questioned costs may simply be due to paperwork problems, not actual misspending, she said.