Audit asks where $12M to feed kids went

State auditors are questioning where more than $12 million intended to provide meals and snacks to low-income Tennessee kids went last year, and in a scathing audit blamed the leadership at the Department of Human Services for repeatedly failing to do its job overseeing the state’s $80 million food program.

DHS officials, meanwhile, continue to dispute that conclusion despite mounting evidence, including:

» A succession of audits released by the comptroller in the past three years described similar lapses in oversight of the state’s food programs.

» Lawmakers have held hearings designed to get to the bottom of egregious cases of fraud and abuse.

» A Tennessean investigation that began in 2015 highlighted numerous cases of fraud and abuse in a program that feeds children who may not have access to regular meals in Tennessee, where more than one in four children are at risk for hunger.

DHS is responsible for distributing federal funds to nonprofit subcontractors who, in turn, are responsible for ensuring meals and snacks are given to children and some adults with intellectual or other disabilities at day care centers, after school programs, churches and community centers.

Monday’s audit noted that DHS officials have a “difference of opinion” over who bears responsibility for problems that range from unscrupulous subcontractors spending money intended for food on home improvements and hotels to filing false reports claiming they have fed children at day care centers or after school programs that simply did not exist.

“Management’s difference of opinion as to who takes responsibility for the findings show in this and previous .... reports The majority of the problems uncovered across state government in the last fiscal year were within the Department of Human Services. Of 68 problems highlighted, 41 involved DHS. continue to be the driving force behind the recurring problems in this area,” the audit said. The audit noted that the “Commissioner of the Department of Human Services should accept responsibility.”

The audit covers a period in which former DHS Commissioner Raquel Hatter served as agency chief. Hatter resigned in December and new DCS Commissioner Danielle Whitworth Barnes took over in January.

DHS officials have noted that just because auditors have questioned tens of millions in spending on the food programs, it doesn’t mean the money didn’t go to feed children in all cases. Costs can be questioned when paperwork isn’t in order or day care centers didn’t follow strict rules on giving children milk to drink instead of juice.

DHS officials also disagree that they had not provided adequate oversight and noted that the food programs, designed by the federal government, have inherent flaws.

“Due to the fact that hunger is a significant vulnerability that can be prevented, the program is designed to err on the side of feeding children and eligible adults while simultaneously maintaining a focus on program integrity,” DHS officials noted in their response to the audit. “Unfortunately the program can be vulnerable to those who have ill intent.”

“We are continuing to work with the Comptroller’s office and our federal partners to continue to gain efficiencies in the administration of the program and catch bad actors whenever possible,” a statement from DHS on Monday said.

The comptroller’s audit reviewed all state agencies that receive federal funds. The majority of the problems uncovered across state government in the last fiscal year were within the Department of Human Services. Of 68 problems highlighted at Tennessee state agencies, 41 involved DHS. They included:

» A failure to recoup fraudulent payments for food until long after the payments were made;

» Paying subcontractors for meals they claimed went to children that did not;

» A high level of turnover among personnel directly responsible for oversight of the food programs including three food program directors in three years;

» A failure to properly vet new subcontractor applicants, including checking a nationwide disqualified list that bars bad actors from participating in the program;

» A failure to monitor and inspect food program subcontractors.

Last month the comptroller released an investigation of two DHS food subcontractors detailing hundreds of thousands of dollars in questionable payouts by DHS.

In one case, taxpayer dollars were spent on Xboxes, at Shoe Carnival and for hotel stays by All About Giving, a private agency that received funds from DHS to provide food to 23 day care centers in Nashville and Knoxville.

In another, workers at Memphisbased Heal Thyself Delivery Temple told investigators they falsified numerous records to show more meals were served than actually were. The organization collected at least $13,000 more in payments from DHS than it spent on food.

Reach Anita Wadhwani at awadhwani@tennessean.com, 615-259-8092, and on Twitter @AnitaWadhwani.