U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

94–551 PDF 2016

ADDRESSING WASTE, FRAUD, AND ABUSE IN 

FEDERAL CHILD NUTRITION PROGRAMS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON EARLY CHILDHOOD, 

ELEMENTARY, AND SECONDARY EDUCATION 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, MAY 19, 2015 

Serial No. 114–15 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: 

www.gpo.gov/fdsys/browse/committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov

CEWDOCROOM with DISTILLER

(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Buddy Carter, Georgia 

Michael D. Bishop, Michigan 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Carlos Curbelo, Florida 

Elise Stefanik, New York 

Rick Allen, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Rube ́n Hinojosa, Texas 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Mark Takano, California 

Hakeem S. Jeffries, New York 

Katherine M. Clark, Massachusetts 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Juliane Sullivan, Staff Director 

Denise Forte, Minority Staff Director 

SUBCOMMITTEE ON EARLY CHILDHOOD, ELEMENTARY, AND 

SECONDARY EDUCATION 

TODD ROKITA, Indiana, Chairman 

Duncan Hunter, California 

Glenn Thompson, Pennsylvania 

Dave Brat, Virginia 

Buddy Carter, Georgia 

Michael D. Bishop, Michigan 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Carlos Curbelo, Florida 

Marcia L. Fudge, Ohio, 

Ranking Minority Member 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Suzanne Bonamici, Oregon 

Mark Takano, California 

Katherine M. Clark, Massachusetts 

CEWDOCROOM with DISTILLER

(III) 

C O N T E N T S 

Page 

Hearing held on May 19, 2015 ............................................................................... 1 

Statement of Members: 

Rokita, Hon. Todd, Chairman, Subcommittee On Early Childhood, Elementary, and Secondary Education ............................................................. 1 

Prepared statement of ............................................................................... 3 

Fudge, Hon. Marcia, L., Ranking Member, Subcommittee On Early Childhood, Elementary, and Secondary Education ............................................. 3 

Prepared statement of ............................................................................... 4 

Statement of Witnesses: 

Brown, Ms. Kay, E., Director, Education, Workforce, and Income Security, Government Accountability OfficeWashington, D.C. ......................... 46 

Prepared statement of ............................................................................... 48 

Harden, Mr. Gil, Assistant Director, Inspector General, Office of Inspector, General, U.S. Department of Agriculture, Washington, DC .............. 7 

Prepared statement of ............................................................................... 8 

Lucas-Judy, Ms. Jessica, Acting Director, Forensic Audits and Investigative Service, Government Accountability Office, Washington, DC ........... 67 

Prepared statement of ............................................................................... 69 

Neuberger, Ms. Zoe, Senior Policy Analyst, Center on Budget and Policy 

Priorities, Washington, DC .......................................................................... 19 

Prepared statement of ............................................................................... 21 

Additional Submissions: 

Questions submitted for the record by: 

Curbelo, Hon. Carlos, a Representative in Congress from the state 

of Florida ................................................................................................ 99 

Kline, Hon. John, Chairman, Committee on Education and the Workforce ......................................................................................................... 105 

Chairman Rokita ....................................................................................... 105 

Response to questions submitted for the record: 

Ms. Brown .................................................................................................. 111 

Mr. Harden ................................................................................................ 115 

CEWDOCROOM with DISTILLER

CEWDOCROOM with DISTILLER

(1) 

ADDRESSING WASTE, FRAUD, AND ABUSE IN 

FEDERAL CHILD NUTRITION PROGRAMS 

Tuesday, May 19, 2015 

House of Representatives, 

Subcommittee on Early Childhood, Elementary, 

and Secondary Education, 

Committee on Education and the Workforce, 

Washington, D.C. 

The subcommittee met, pursuant to call, at 10:02 a.m., in Room 

2175, Rayburn House Office Building, Hon. Todd Rokita [chairman 

of the subcommittee] presiding. 

Present: Representatives Rokita, Thompson, Brat, Carter, 

Curbelo, Fudge, Davis, Bonamici, Takano, and Clark. 

Also present: Representatives Kline and Scott. 

Staff present: Lauren Aronson, Press Secretary; Janelle Belland, 

Coalitions and Members Services Coordinator; Kathlyn Ehl, Professional Staff Member; Matthew Frame, Legislative Assistant; Tyler 

Hernandez, Press Secretary; Amy Raaf Jones, Director of Education and Human Resources Policy; Nancy Locke, Chief Clerk; 

Daniel Murner, Deputy Press Secretary; Krisann Pearce, General 

Counsel; Mandy Schaumburg, Education Deputy Director and Senior Counsel; Alissa Strawcutter, Deputy Clerk; Tylease Alli, Minority Clerk/Intern and Fellow Coordinator; Austin Barbera, Minority 

Staff Assistant; Kelly Broughan, Minority Education Policy Advisor; Denise Forte, Minority Staff Director; and Tina Hone, Minority 

Education Policy Director and Associate General Counsel. 

Chairman ROKITA. Good morning. A quorum being present, the 

Subcommittee on Early Childhood, Elementary, and Secondary 

Education will come to order. 

Welcome to today’s subcommittee hearing. I would like to thank 

our witnesses for joining us to discuss ways to prevent waste, 

fraud, and abuse in federal child nutrition programs. 

Last month the Committee on Education and the Workforce held 

a hearing to discuss the importance of federal child nutrition programs, many of which need to be reauthorized by Congress later 

this year. Members engaged in a robust discussion about these programs, and we understand the role healthy food plays in a child’s 

physical, mental, and emotional development. 

However, tackling waste, fraud, and abuse must be a priority as 

we work to ensure eligible students who are most in need have access to nutrition programs. 

CEWDOCROOM with DISTILLER

2 

The federal government has long invested taxpayer dollars in 

programs that provide healthy meals and snacks to low-income students and families. Through the Richard B. Russell National School 

Lunch Act and the Child Nutrition Act, it is estimated Congress 

will spend over $21 billion this fiscal year on a number of programs 

that include the Supplemental Nutritional Program for Women, Infants, and Children, otherwise known to us as WIC; the National 

School Lunch Program; and the School Breakfast Program. 

Congress has a responsibility to ensure taxpayer dollars are well 

spent. That is why we are here today. 

Recent reports from independent government watchdogs raise 

concerns about waste, fraud, and abuse in the administration of 

these programs. These concerns should be shared by every member 

of the committee for two important reasons. 

First, taxpayer dollars are being misdirected toward individuals 

who do not need, or are eligible for, federal assistance. The Government Accountability Office has uncovered several troubling examples of fraud and abuse in the WIC program. Reports have also 

found WIC recipients and vendors reselling supplemental foods to 

non-WIC-eligible individuals, defrauding the federally funded program for millions of dollars. 

Unfortunately, the misuse of taxpayer dollars does not stop 

there. In the first review of payment errors since 2007, the Department of Agriculture found that in just one school year it made $2.7 

billion of improper payments under the school lunch and breakfast 

programs. According to the Wall Street Journal, the majority of improper payments stemmed from individuals who received the benefits for which they did not qualify. 

American taxpayers deserve better management and oversight, 

especially at a time when the national debt continues to reach new 

heights. 

This brings me to the second reason why we are here today, and 

it is just as important. Each and every dollar spent on a federal 

program should have a direct, meaningful, and lasting impact on 

those it is intended to serve, not those looking to cheat the system. 

We must ensure federal nutrition programs effectively and efficiently serve the low-income children and families who desperately 

need this assistance. As a witness from last month’s child nutrition 

hearing so aptly put it, quote: ‘‘When we aren’t able to give our 

children the nutrition they need, we fail them,’’ unquote. 

Again, it is Congress’ responsibility to ensure this multibillion 

dollar investment in child nutrition is in fact reaching the students 

who need it the most. This committee is committed to that goal as 

it works to reauthorize these important programs. 

We look forward to learning from our witnesses about how to improve the fiscal integrity of federal child nutrition programs in 

order to serve our nation’s mothers, infants, children, and students 

who are most in need. 

And with that, I will now recognize the ranking member, Congresswoman Fudge, for her opening remarks. 

[The statement of Chairman Rokita follows:] 

CEWDOCROOM with DISTILLER

3 

Prepared Statement of Hon. Todd Rokita, Chairman, Subcommittee on 

Early Childhood, Elementary, and Secondary Education 

Good morning, and welcome to today’s subcommittee hearing. I’d like to thank our 

witnesses for joining us to discuss ways to prevent waste, fraud, and abuse in federal child nutrition programs. 

Last month, the Committee on Education and the Workforce held a hearing to discuss the importance of federal child nutrition programs, many of which need to be 

reauthorized by Congress later this year. Members engaged in a robust discussion 

about these programs, and we understand the role healthy food plays in a child’s 

physical, mental, and emotional development. However, tackling waste, fraud, and 

abuse must be a priority as we work to ensure eligible students who are most in 

need have access to nutrition programs. 

The federal government has long invested taxpayer dollars in programs that provide healthy meals and snacks to low-income students and families. Through the 

Richard B. Russell National School Lunch Act and the Child Nutrition Act, it is estimated Congress will spend over $21 billion this fiscal year on a number of programs 

that include the Supplemental Nutritional Program for Women, Infants, and Children or WIC, the National School Lunch Program, and the School Breakfast Program. 

Congress has a responsibility to ensure taxpayer dollars are well-spent. That’s 

why we are here today. Recent reports from independent government watchdogs 

raise concerns about waste, fraud, and abuse in the administration of these programs. These concerns should be shared by every member of the committee for two 

important reasons. 

First, taxpayer dollars are being misdirected toward individuals who do not need, 

or are eligible for, federal assistance. The Government Accountability Office has uncovered several troubling examples of fraud and abuse in the WIC program. Reports 

have also found WIC recipients and vendors reselling supplemental foods to nonWIC eligible individuals, defrauding the federally funded program for millions of 

dollars. 

Unfortunately, the misuse of taxpayer dollars does not stop there. In the first review of payment errors since 2007, the Department of Agriculture found that in just 

one school year it made $2.7 billion of improper payments under the school lunch 

and breakfast programs. According to the Wall Street Journal, the majority of improper payments stemmed from individuals who received benefits for which they did 

not qualify. American taxpayers deserve better management and oversight, especially at a time when the national debt continues to reach new heights. 

This brings me to the second reason why we are here today, and it is just as important. Each and every dollar spent on a federal program should have a direct, 

meaningful, and lasting impact on those it is intended to serve – not those looking 

to cheat the system. We must ensure federal nutrition programs effectively and efficiently serve the low-income children and families who desperately need this assistance. As a witness from last month’s child nutrition hearing so aptly put it, ‘‘When 

we aren’t able to give our children the nutrition they need, we fail them.’’ 

Again, it is Congress’ responsibility to ensure this multi-billion dollar investment 

in child nutrition is in fact reaching the students who need it most. This committee 

is committed to that goal as it works to reauthorize these important programs. We 

look forward to learning from our witnesses about how to improve the fiscal integrity of federal child nutrition programs in order to serve our nation’s mothers, infants, children, and students that are most in need. 

With that, I will now recognize the ranking member, Congresswoman Fudge, for 

her opening remarks. 

Ms. FUDGE. Thank you very much, Mr. Chairman. 

And thank you, to the witnesses, for being here today. 

Certainly I welcome the opportunity to discuss ways that we can 

improve the programs feeding the nation’s children. However, I 

continue to be disheartened by the way that we word things. 

The title of this hearing is ‘‘Addressing Waste, Fraud, and Abuse 

in Federal Child Nutrition Programs.’’ These words are inflammatory and do not accurately describe what is going on in this 

country. 

The first reports we will discuss today and the written testimony 

of our witnesses will focus on error rates in the school meals proCEWDOCROOM with DISTILLER

4 

gram and the improper sales of infant formula as it pertains to the 

WIC program. Every federal dollar should be spent appropriately, 

and we should be concerned about correcting any and all errors. 

I applaud the Food and Nutrition Service of the USDA for creating an Office of Program Integrity for child nutrition programs 

to tackle the issues of error rates. This office has developed solutions to reduce errors and continually assesses programs—program 

policies, operations, and procedures to ensure a better performance 

record. 

Further, the USDA has acknowledged that it needs to strengthen 

its policy and provide clarity to states for identifying attempted 

sales of WIC benefits. That work is not complete, but I am encouraged that the USDA is taking the issue seriously and moving forward to address it. 

As we listen to the witnesses this morning, let’s not forget the 

big picture. There are hungry children in this country. 

Approximately 15.8 million children, or about 21 percent of all 

children living in the United States of America, are food-insecure. 

According to USDA, about 22 percent of the children who are eligible to participate in school lunch programs are not enrolled. We 

should focus on how we reduce these numbers. 

The desire to improve the efficiency of our child nutrition programs is a good one, but must not lead to more hungry and foodinsecure children. We can improve efficiency while ensuring children get the nutritious foods they need. 

I urge my colleagues to focus on how we do both. 

I yield back. 

[The statement of Ms. Fudge follows:] 

Prepared Statement of Hon. Marcia L. Fudge, Ranking Member, 

Subcommittee on Early Childhood, Elementary, and Secondary Education 

While I welcome the opportunity to discuss how we can improve the programs 

feeding our nation’s children, I must say I am disheartened with the title of this 

hearing, ‘‘Addressing Waste, Fraud, and Abuse in Federal Child Nutrition Programs.’’ These words are inflammatory and do not accurately describe what is taking place. 

The five reports we will discuss today and the written testimony of our witnesses 

will focus on error rates in the school meals program and the improper sales of infant formula as it pertains to the WIC program. 

Every federal dollar should be spent appropriately and we should be concerned 

about correcting any and all errors. I applaud the Food and Nutrition Service of the 

USDA for creating an Office of Program Integrity for Child Nutrition Programs to 

tackle the issue of error rates. This office has developed solutions to reduce errors 

and continually assesses program policies, operations, and procedures to ensure a 

better performance record. 

Further, the USDA has acknowledged that it needs to strengthen its policy and 

provide clarity to states for identifying attempted sales of WIC benefits. That work 

is not complete, but I am encouraged that the USDA is taking the issue seriously, 

and moving forward to address it. 

As we listen to the witnesses this morning, let’s not forget the big picture...there 

are hungry children in America. Approximately 15.8 million children, or about 

21.6% of all children living in the U.S., are food insecure. According to USDA, about 

22% of the children who are eligible to participate in the school lunch program are 

not enrolled. We should focus on how we reduce these numbers. 

The desire to improve the efficiency in our child nutrition programs is a good one, 

but must not lead to more hungry or food insecure children. We can improve efficiency while ensuring children get the nutritious foods they need. I urge my colleagues to focus on how we do both. 

CEWDOCROOM with DISTILLER

5 

Chairman ROKITA. Thank the ranking member. 

Pursuant to committee rule 7(c), all members will be permitted 

to submit written statements to be included in the permanent 

hearing record. And without objection, the hearing record will remain open for 14 days to allow such statements and other extraneous material referenced during the hearing to be submitted for 

the official hearing record. 

I will now turn to the introduction of our distinguished witnesses. 

First, Mr. Gil H. Harden is the assistant inspector general for 

audit at the Office of the Inspector General for the U.S. Department of Agriculture here in Washington, D.C. Mr. Harden is responsible for all audits of the Department of Agriculture and its 

worldwide operations and programs. He has audited in the areas 

of food safety, nutrition assistance, animal and plant health, marketing, business, housing, and utility loans and grants. 

Welcome. 

Next, Ms. Zoe Neuberger is a senior policy analyst with the Center on Budget and Policy Priorities here in Washington, D.C. Since 

joining the center in 2001, Ms. Neuberger has provided analytic 

and technical assistance on child nutrition programs, such as WIC 

and school meals, to policymakers and state-level nonprofit groups. 

Previously, she was the budget analyst for these programs at the 

White House Office of Management and Budget. 

Welcome. 

Next, Ms. Kay Brown is the director for education, workforce, 

and income security within the U.S. Government Accountability Office here in Washington, D.C. Ms. Brown is responsible for leading 

GAO’s work related to child welfare, child care, domestic nutrition 

assistance, Temporary Assistance for Needy Families—TANF, and 

services for older adults. Before joining GAO, Ms. Brown worked as 

a caseworker and manager in the human services department for 

county government in Pennsylvania. 

Welcome. 

Ms. Jessica Lucas-Judy is the acting director of forensic audits 

and investigative service for the U.S. Government Accountability 

Office here in Washington. GAO’s forensic audits and investigative 

service team performs forensic audits, internal control reviews, and 

special investigations targeted at vulnerable federal programs and 

funding, including a recent review of federal school meals programs. Since 2000, Ms. Lucas-Judy has led a range of projects 

spanning national security, social services, and transportation accessibility. 

Welcome to you, as well. 

I will now ask our witnesses to stand and raise your right hand. 

[Witnesses sworn.] 

Let the record reflect the witnesses answered in the affirmative. 

And you may be seated. Thank you very much. 

Now, before I recognize you to provide your testimony, let me 

briefly explain our lighting system. 

You will have 5 minutes to present your testimony. When you 

begin, the light, of course, will be green; when there is 1 minute 

left it will turn yellow; and when it turns red you are out of time. 

CEWDOCROOM with DISTILLER

6 

And that is a reminder for us up here as much as it is for you, 

so thank you for considering that. 

And I will recognize the witnesses for 5 minutes of questioning 

starting with Mr. Harden. Thank you. 

You are recognized for 5 minutes. 

STATEMENT OF MR. GIL HARDEN, ASSISTANT INSPECTOR 

GENERAL, OFFICE OF INSPECTOR GENERAL, UNITED 

STATES DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C. 

Mr. HARDEN. Good morning, Chairman Rokita, Ranking Member 

Fudge, and members of the subcommittee. Thank you for inviting 

me to testify about OIG’s oversight of USDA’s programs providing 

nutrition assistance to children. 

The School Lunch; School Breakfast; and Special Supplemental 

Nutrition Program for Women, Infants, and Children have each 

been subjects of a recent OIG audit and investigative work. Our 

audits have highlighted a number of areas for improving program 

operations and effectiveness. 

As you know, OIG’s mission is to promote the efficiency and effectiveness of USDA programs by performing audits to reduce 

fraud, waste, and abuse. We perform audits designed to ascertain 

a program—if a program is functioning as intended, if program 

payments are reaching those they are intended to reach, and if 

funds are achieving the purpose for which they are intended to accomplish. When we find problems, we make recommendations we 

believe will help the agency better accomplish its mission. 

As the official responsible for these audits, I will outline the results of our work on improper payments, participant eligibility in 

the School Lunch and School Breakfast Program, and WIC controls. I will also highlight the work conducted by our Office of Investigations. 

In 2014 the School Lunch and School Breakfast Programs provided nutritionally balanced low-cost or free meals to approximately 31 million children each school day. The program serves a 

vital interest of ensuring that schoolchildren, often from the most 

vulnerable homes, attend their classes hunger-free and ready to 

learn. 

However, these programs have experienced high rates of improper payments, particularly regarding participant eligibility. Together, the two programs cost $16.3 billion in fiscal year 2014. 

In fiscal year 2009, the School Lunch Program improper payments cost taxpayers an estimated $1.4 billion. In response to improper payments legislation in 2010, USDA identified School Lunch 

and School Breakfast as high-risk programs. The department was 

then required to measure and report improper payment estimates 

for these two programs each year. 

In fiscal year 2013, these programs continued to experience high 

rates of improper payments: approximately 25 percent for School 

Breakfast and approximately 16 percent for School Lunch. We 

noted similar results in our recent report on USDA’s compliance reporting for fiscal year 2014, as well. 

In our recent work we have evaluated methods that FNS used 

to lower its error rates for both programs and to ensure children 

approved for free and reduced-price meals met eligibility requireCEWDOCROOM with DISTILLER

7 

ments. However, these programs are self-reporting programs. Unlike other FNS program, proof of income is not required. 

School food authorities annually verify children’s eligibility, sampling 3 percent of household applications approved for the school 

year. Those verifications indicate that the rate of misreported income may be high. 

During school year 2012 and 2013, as a result of the annual 

verification process, school food authorities reduced or eliminated 

benefits for almost 108,000 of the more than 199,000 sampled 

households nationwide because the income claimed on applications 

was unsupported or excessive. OIG maintains that the shortest 

path to correcting these problems surrounding the programs could 

be by requiring families to submit income documentation with their 

applications. 

In addition, school food authorities are required to verify any 

questionable application. This verification is an important control 

for reducing improper payments. 

However, our recent work found that 44 of the 56 school food authorities we reviewed did not question any applications. We later 

identified 42 applications that were potentially questionable based 

on FNS’ criteria. 

In recent work pertaining to WIC, OIG found that FNS has 

worked with states to reduce food costs. However, FNS could 

achieve additional cost savings. 

For example, we found that FNS’ management evaluations did 

not always identify significant issues that may impact a state agency’s food cost. And when FNS did identify the deficiencies at state 

agencies, it did not always ensure that those agencies took appropriate and timely corrective action. 

Another audit of FNS’ controls over vendor management in WIC 

also found that management evaluations did not identify and correct significant issues in the vendor management process. 

Overall, our audit work has shown that FNS has many opportunities to improve program oversight. In some cases it needs to 

strengthen its own controls; in other cases it need to improve how 

it communicates requirements to local authorities. 

Like our audits, OIG criminal investigations indicate the need to 

improve oversight. In fiscal year 2014 and 2015, investigations involving WIC, School Lunch, and the Child and Adult Care Food 

Program resulted in 93 convictions and $79.2 million in monetary 

results. 

The majority of these results stem from a significant WIC case 

investigation in Georgia. To defraud WIC, this ring canvassed 

neighborhoods for WIC recipients and then bought their benefits 

for pennies on the dollar. 

This concludes my statement. I want to again thank you for the 

opportunity to testify, and I welcome any questions. 

[The statement of Mr. Harden follows:] 

CEWDOCROOM with DISTILLER

8 

CEWDOCROOM with DISTILLER


Insert offset folio 1 here 94551.001
9 

CEWDOCROOM with DISTILLER


Insert offset folio 2 here 94551.002
10 

CEWDOCROOM with DISTILLER


Insert offset folio 3 here 94551.003
11 

CEWDOCROOM with DISTILLER


Insert offset folio 4 here 94551.004
12 

CEWDOCROOM with DISTILLER


Insert offset folio 5 here 94551.005
13 

CEWDOCROOM with DISTILLER


Insert offset folio 6 here 94551.006
14 

CEWDOCROOM with DISTILLER


Insert offset folio 7 here 94551.007
15 

CEWDOCROOM with DISTILLER


Insert offset folio 8 here 94551.008
16 

CEWDOCROOM with DISTILLER


Insert offset folio 9 here 94551.009
17 

CEWDOCROOM with DISTILLER


Insert offset folio 10 here 94551.010
18 

CEWDOCROOM with DISTILLER


Insert offset folio 11 here 94551.011
19 

Chairman ROKITA. Thank you, Mr. Harden. 

Ms. Neuberger, you are recognized for 5 minutes. 

STATEMENT OF MS. ZOE NEUBERGER, SENIOR POLICY ANALYST, CENTER ON BUDGET AND POLICY PRIORITIES, WASHINGTON, D.C. 

Ms. NEUBERGER. Thank you very much for the invitation to testify on improving accuracy in the school meal programs and WIC. 

I am a senior policy analyst at the Center on Budget and Policy 

Priorities, a nonprofit policy institute that conducts research and 

analysis on budget and tax policy as well as poverty and social programs. 

WIC and the school meal programs have a proven track record 

of promoting healthy growth and learning by providing nutritional 

support to our nation’s children. WIC is both extremely effective 

and efficient, ensuring that our youngest children get proper nutrition during a critical period of development. 

Likewise, school meals bolster nutrition throughout childhood. 

The roughly 30 million children who eat school lunch on a typical 

school day include more than 21 million low-income children for 

whom school meals may be the healthiest and most reliable meals 

they get. 

Nearly 100,000 schools operate the meal programs—processing 

applications, providing healthy meals, and tracking individual students’ eligibility to claim the appropriate federal reimbursement. 

Their work means that we have fewer hungry children and our students are better prepared to learn. 

But it is essential for them to administer the programs accurately. The Department of Agriculture estimated that the Federal 

Government spent $444 million a couple of years ago on reimbursements for lunches that didn’t meet nutrition standards. That is not 

acceptable. 

The school meal programs must make sure that federal funds are 

used for meals that meet federal criteria. Fortunately, we have got 

some powerful tools to address the issue. 

The verification process, which checks a sample of meal applications; a rigorous new review process; and a recent USDA study 

that gives a great deal of information about the causes of errors, 

which can facilitate effective policy solutions. 

But there are also challenges to improving accuracy in a vast and 

complex system whose main focus is to educate children, not administer the meal programs. Schools aren’t set up to do the kind 

of eligibility determinations that other public benefit programs do. 

SNAP and Medicaid, for example, have teams of professional eligibility workers who spend all day every day sorting out the details 

of applications’ income of household circumstances. A school might 

only have a cafeteria-worker or secretary who handles meal applications for a few weeks at the start of each year. 

So given the tools at the program’s disposal, how can Congress 

improve accuracy in the meal programs? An example can help show 

the way. 

Beginning with the 2004 reauthorization and building on that in 

2010, Congress set a clear expectation for school districts and 

states to make better use of the rigorous eligibility determinations 

CEWDOCROOM with DISTILLER

20 

made by other programs, primarily SNAP, to approve children for 

free meals automatically. This saves time and reduces errors. 

In the past decade we have seen striking improvement. Now, 

nearly half of children approved for free or reduced-price meals 

don’t have to complete an application. Congress played an important role here by setting an expectation and then providing the 

tools and support to meet it. 

My written testimony describes many other tailored steps Congress and USDA have taken to strengthen the school meal programs and WIC, but there is certainly room to do more. It is important to strengthen management and oversight across the board, 

provide more help to school districts that persistently struggle with 

errors, and pursue innovations that could open up new ways to improve accuracy. 

For example, GAO recommends exploring the use of data-matching to identify school meal applications that might have incorrect 

information. That is worth trying. 

USDA plans to develop a model electronic school meal application. That is another promising innovation. 

WIC is moving toward offering benefits electronically, rather 

than relying on paper vouchers, which helps prevent errors and allows states to strengthen their vendor oversight while also reducing stigma for program participants. 

As you develop ways to improve accuracy in these programs, I 

urge you to consider four questions. 

First, does the proposal have a proven record of reducing error? 

Some ideas that sound promising, like requiring a household to 

submit pay stubs with their school meal application, have not been 

effective when tested. 

Second, will it maintain program access for the most vulnerable 

children? Nearly 16 million children live in food-insecure households. We certainly don’t want to worsen that problem. 

Third, is it administratively feasible? Adopting a more time-consuming documentation or verification system might prevent some 

errors, but it could cause others by adding a step to the process, 

and it would force school staff to spend much more time determining school meal eligibility at the expense of other educational 

priorities. 

Fourth, is it cost-effective? High-quality information management 

systems can be very effective but might cost too much for a small 

school district. 

As I noted, it is critical that error reduction strategies not reduce 

access to school meals or WIC benefits for children who need them. 

The best way to improve integrity in these programs is not through 

punitive policy, but instead to continue sending a clear message to 

program officials that accuracy is important, that it will be measured, and that federal officials will support them in implementing 

needed improvements. 

Thank you. 

[The statement of Ms. Neuberger follows:] 

CEWDOCROOM with DISTILLER

21 

CEWDOCROOM with DISTILLER


Insert offset folio 12 here 94551.012
22 

CEWDOCROOM with DISTILLER


Insert offset folio 13 here 94551.013
23 

CEWDOCROOM with DISTILLER


Insert offset folio 14 here 94551.014
24 

CEWDOCROOM with DISTILLER


Insert offset folio 15 here 94551.015
25 

CEWDOCROOM with DISTILLER


Insert offset folio 16 here 94551.016
26 

CEWDOCROOM with DISTILLER


Insert offset folio 17 here 94551.017
27 

CEWDOCROOM with DISTILLER


Insert offset folio 18 here 94551.018
28 

CEWDOCROOM with DISTILLER


Insert offset folio 19 here 94551.019
29 

CEWDOCROOM with DISTILLER


Insert offset folio 20 here 94551.020
30 

CEWDOCROOM with DISTILLER


Insert offset folio 21 here 94551.021
31 

CEWDOCROOM with DISTILLER


Insert offset folio 22 here 94551.022
32 

CEWDOCROOM with DISTILLER


Insert offset folio 23 here 94551.023
33 

CEWDOCROOM with DISTILLER


Insert offset folio 24 here 94551.024
34 

CEWDOCROOM with DISTILLER


Insert offset folio 25 here 94551.025
35 

CEWDOCROOM with DISTILLER


Insert offset folio 26 here 94551.026
36 

CEWDOCROOM with DISTILLER


Insert offset folio 27 here 94551.027
37 

CEWDOCROOM with DISTILLER


Insert offset folio 28 here 94551.028
38 

CEWDOCROOM with DISTILLER


Insert offset folio 29 here 94551.029
39 

CEWDOCROOM with DISTILLER


Insert offset folio 30 here 94551.030
40 

CEWDOCROOM with DISTILLER


Insert offset folio 31 here 94551.031
41 

CEWDOCROOM with DISTILLER


Insert offset folio 32 here 94551.032
42 

CEWDOCROOM with DISTILLER


Insert offset folio 33 here 94551.033
43 

CEWDOCROOM with DISTILLER


Insert offset folio 34 here 94551.034
44 

CEWDOCROOM with DISTILLER


Insert offset folio 35 here 94551.035
45 

CEWDOCROOM with DISTILLER


Insert offset folio 36 here 94551.036
46 

Chairman ROKITA. Thank you, Ms. Neuberger. 

Ms. Brown, you are recognized for 5 minutes. 

STATEMENT OF MS. KAY E. BROWN, DIRECTOR, EDUCATION, 

WORKFORCE, AND INCOME SECURITY, GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, D.C. 

Ms. BROWN. Chairman Rokita, Ranking Member Fudge, and 

members of the subcommittee, thank you for inviting me here 

today to discuss our work of online sale of WIC infant formula. I 

will also touch on one aspect of USDA monitoring of the school 

meal program. The $6.5 billion WIC program is designed to improve the health 

of low-income pregnant and postpartum women, infants, and young 

children, and infant formula is a key component of the food package made available to WIC participants. According to the rules, 

these participants are not permitted to sell foods they receive from 

the program. However, news reports have suggested some participants have attempted to do so. 

So what is the extent of these online formula sales? The bottom 

line is we really don’t know. 

Neither USDA nor officials we talked to from 12 states systematically collect data on this issue. However, officials from five of the 

states told us they had found WIC formula for sale online, but most 

said the numbers were very small. 

So to gather more information on this issue, we monitored a popular e-commerce Web site in four large metro areas for 30 days 

looking for posts offering infant formula for sale. We found more 

than 2,500 posts that included the term ‘‘formula,’’ but only two of 

them that were explicitly identified as WIC formula. 

However, we identified more than 400 other posts that could 

have been advertising WIC-provided formula because it was of the 

same brand, type, quantity, or container volume that is offered 

through the state WIC program. 

To be clear, though, we don’t know whether these posts were 

made by WIC participants or not. This formula is available at retail stores and purchased by others not participating in WIC. However, we believe these posts do raise questions that we think warrant attention by USDA, particularly in light of the growth of ecommerce in recent years and the high value of infant formula. 

Even before our study, USDA had taken some constructive steps. 

The department issued guidance and then proposed regulations to 

make clear that offering to sell WIC benefits, including online, is 

a program violation. Violations can result in sanctions ranking 

from a written warning to benefit termination. 

The department also sent letters to four e-commerce Web sites 

requesting that they notify their customers that the sale of WIC 

benefits is prohibited, and two of these sites agreed to post this notification. 

Beyond these efforts, we made some recommendations for additional action. First, we focused on making sure the program participants know that selling formula is not permitted. We recommended 

that USDA tell state agencies to include this information in the 

rights and responsibilities statements that all WIC participants 

must sign. 

CEWDOCROOM with DISTILLER

47 

Also, because we found wide variation in how and how often the 

12 states we spoke with monitor for online sales, we recommended 

that USDA require states to spell out their procedures for this 

monitoring in their annual planning documents. 

USDA included both actions as best practices in April guidance 

to the states and also plans to include them as requirements in 

new regulations. 

Finally, because state officials noted their scarce resources and 

the difficulty in distinguishing between WIC and non-WIC online 

formula sales, we recommended that USDA identify cost-effective 

techniques to monitor for these sales, and USDA plans to explore 

ways to identify and share best practices and new approaches. 

Before I conclude, I would like to mention one component of our 

work on school meals monitoring. States are required to monitor 

school food authorities to make sure they are in compliance with 

federal requirements. 

Beginning in school year 2012–2013, as school food authorities 

were implementing the new school lunch nutritional requirements 

USDA encouraged states to focus their oversight on technical assistance and support rather than on documenting problems and 

noncompliance. While this may have helped school food authorities, 

evidence suggests that this approach may also have resulted in 

some SFAs being certified as ‘‘in compliance’’ even though they may 

not have fully met the new requirements. 

As a result, and as this approach continues, SFAs lack information on needed corrective actions and USDA lacks complete information on problem areas that require attention. 

This concludes my statement. I would be happy to answer any 

questions you might have. 

[The statement of Ms. Brown follows:] 

CEWDOCROOM with DISTILLER

48 

CEWDOCROOM with DISTILLER


Insert offset folio 37 here 94551.037
49 

CEWDOCROOM with DISTILLER


Insert offset folio 38 here 94551.038
50 

CEWDOCROOM with DISTILLER


Insert offset folio 39 here 94551.039
51 

CEWDOCROOM with DISTILLER


Insert offset folio 40 here 94551.040
52 

CEWDOCROOM with DISTILLER


Insert offset folio 41 here 94551.041
53 

CEWDOCROOM with DISTILLER


Insert offset folio 42 here 94551.042
54 

CEWDOCROOM with DISTILLER


Insert offset folio 43 here 94551.043
55 

CEWDOCROOM with DISTILLER


Insert offset folio 44 here 94551.044
56 

CEWDOCROOM with DISTILLER


Insert offset folio 45 here 94551.045
57 

CEWDOCROOM with DISTILLER


Insert offset folio 46 here 94551.046
58 

CEWDOCROOM with DISTILLER


Insert offset folio 47 here 94551.047
59 

CEWDOCROOM with DISTILLER


Insert offset folio 48 here 94551.048
60 

CEWDOCROOM with DISTILLER


Insert offset folio 49 here 94551.049
61 

CEWDOCROOM with DISTILLER


Insert offset folio 50 here 94551.050
62 

CEWDOCROOM with DISTILLER


Insert offset folio 51 here 94551.051
63 

CEWDOCROOM with DISTILLER


Insert offset folio 52 here 94551.052
64 

CEWDOCROOM with DISTILLER


Insert offset folio 53 here 94551.053
65 

CEWDOCROOM with DISTILLER


Insert offset folio 54 here 94551.054
66 

CEWDOCROOM with DISTILLER


Insert offset folio 55 here 94551.055
67 

Chairman ROKITA. Thank you, Ms. Brown. 

Ms. Lucas-Judy, you are recognized for 5 minutes. 

STATEMENT OF MS. JESSICA LUCASJUDY, ACTING DIRECTOR, 

FORENSIC AUDITS AND INVESTIGATIVE SERVICE, GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, D.C. 

Ms. LUCAS-JUDY. Chairman Rokita, Ranking Member Fudge, and 

members of the subcommittee, thank you very much for inviting 

me here today to discuss GAO’s May 2014 report on school meals 

programs and three key opportunities that we identified to further 

strengthen program integrity while ensuring legitimate access: 

first, providing additional guidance for verifying eligibility; second, 

using data-matching to verify household income; and third, expanding the types of applications that are subject to verification. 

As you know, access to healthy meals is essential for students’ 

well-being and academic achievement. USDA administers school 

meals programs to provide such access and spent more than $15 

billion on them in fiscal year 2014. 

Most students participating in these programs received the meals 

for free or at a reduced price. While many are legitimately eligible 

for this benefit, the school meals programs have a high rate of improper payments. 

As we reported in 2014, USDA has taken a number of steps to 

enhance controls to identify and prevent ineligible households from 

receiving school meals benefits. For example, USDA has increased 

the frequency of administrative reviews to determine whether eligibility decisions were made correctly. 

However, we identified opportunities for further improvement. 

The first opportunity involves a process known as for-cause 

verification, where school districts review the applications that 

they have deemed questionable and determine whether any corrections are needed. 

We interviewed officials from 25 school districts in the Dallas 

and the D.C. metropolitan areas. Officials from nine of those school 

districts said that they do not conduct any for-cause verification, 

and five others said that they do so only if someone informs them 

of a need. 

Thus, we recommended that USDA collect additional data on this 

issue and consider developing guidance with criteria to help school 

districts identify questionable applications, which the agency has 

agreed to do. 

The second opportunity involved data-matching to verify income 

information. Households can apply for school meals benefits on the 

basis of income and don’t have to provide any supporting documentation with their applications. 

We obtained actual income data for federal employees and 

matched it against a sample of approved applications from 25 

school districts in the Dallas and D.C. areas for the 2010–2011 

school year to determine whether the earnings matched up with 

the income that was stated in the application. We found that nine 

out of the 19 households in our review appeared to have income too 

high to qualify for the school meals benefits that they received. 

School districts are required to select a sample of applications 

that fall within $1,200 of the income eligibility threshold for a reCEWDOCROOM with DISTILLER

68 

view process that is known as standard verification. Seven out of 

the nine applications that we identified would not have been subject to that standard verification process because the income that 

was listed on their application was outside of that $1,200 range. 

For instance, one household with two children stated an income 

of $26,000 per year in the application and was approved for reduced-price meals. By matching payroll records, we found that the 

income was actually $52,000. We interviewed the applicant who admitted underestimating her income. 

While our results were from a small sample and can’t be projected to the whole population, we recommended that USDA study 

the feasibility of using income data, as we did, to conduct computer 

matching to find questionable applications for review, and USDA 

agreed. 

The third opportunity involves verifying a sample of applications 

that indicate so-called categorical eligibility—that is, eligibility 

through participation in other public assistance programs, such as 

SNAP, or meeting an approved designation, such as foster children. 

Households can check a box on the application indicating that they 

meet one of those requirements and qualify for free meals. 

Categorical applications are not subject to standard verification. 

We found that two out of six households in our sample were not 

actually eligible for free meals, and another one could have been 

eligible for reduced-price meals based on income instead. 

To illustrate, one household was approved for free meals after 

providing a public assistance benefit number. When we contacted 

the state agency that administered that program, however, officials 

told us the household had not been receiving benefits at that time. 

We recommended that USDA consider verifying a sample of applications that indicate categorical eligibility, which the agency 

says it will do. 

So in summary, the three actions that we identified to help 

strengthen the verification process—providing guidance to identify 

questionable applications, using data-matching to verify household 

income, and including categorically eligible households in the 

verification process—can all help USDA better ensure that the 

funds are used to serve students who are truly in need. 

Chairman Rokita, Ranking Member Fudge, members of the subcommittee, this concludes my prepared statement and I will be 

happy to answer any questions that you have. Thank you. 

[The statement of Ms. Lucas-Judy follows:] 

CEWDOCROOM with DISTILLER

69 

CEWDOCROOM with DISTILLER


Insert offset folio 56 here 94551.056
70 

CEWDOCROOM with DISTILLER


Insert offset folio 57 here 94551.057
71 

CEWDOCROOM with DISTILLER


Insert offset folio 58 here 94551.058
72 

CEWDOCROOM with DISTILLER


Insert offset folio 59 here 94551.059
73 

CEWDOCROOM with DISTILLER


Insert offset folio 60 here 94551.060
74 

CEWDOCROOM with DISTILLER


Insert offset folio 61 here 94551.061
75 

CEWDOCROOM with DISTILLER


Insert offset folio 62 here 94551.062
76 

CEWDOCROOM with DISTILLER


Insert offset folio 63 here 94551.063
77 

CEWDOCROOM with DISTILLER


Insert offset folio 64 here 94551.064
78 

CEWDOCROOM with DISTILLER


Insert offset folio 65 here 94551.065
79 

CEWDOCROOM with DISTILLER


Insert offset folio 66 here 94551.066
80 

CEWDOCROOM with DISTILLER


Insert offset folio 67 here 94551.067
81 

CEWDOCROOM with DISTILLER


Insert offset folio 68 here 94551.068
82 

CEWDOCROOM with DISTILLER


Insert offset folio 69 here 94551.069
83 

CEWDOCROOM with DISTILLER


Insert offset folio 70 here 94551.070
84 

CEWDOCROOM with DISTILLER


Insert offset folio 71 here 94551.071
85 

Chairman ROKITA. Thank you, Ms. Lucas-Judy. 

We will now turn to member questioning. I am going to reserve 

my question time and defer to the full committee chairman, Mr. 

John Kline of Minnesota. 

Mr. KLINE. Thank you, Mr. Chairman. Thanks for the hearing 

and thanks for allowing me to question. 

Thanks, to the witnesses, for being here. It is a great panel. 

I look out there and I see two witnesses from the GAO and it 

reminds me of how much we rely on the very fine work that you 

do, so it is good to see you here. And in that line, I am going to 

start with Ms. Brown. 

We have seen you here on a number of occasions. We are always 

glad to have your testimony. 

You sort of wrapped up your testimony talking about the work 

that your team had done on the new meal standards and what 

USDA was doing in emphasizing technical assistance rather than 

documenting instances of noncompliance, and I think technical assistance is probably a very good idea, but it does raise a question 

because USDA has been touting, I would say, a 95 percent compliance rate. How do we have confidence in that number if a significant number of schools is doing technical assistance rather than 

checking on compliance? 

Ms. BROWN. Based on the work that we did, including surveys 

of state administrators and our on-site visits in schools as well as 

multiple discussions with state officials, I think we would conclude 

that number is probably optimistic and I do want to clarify from 

our perspective that while we fully support the need for technical 

assistance and support from USDA, because this is a difficult process and the schools are going through a big transition, we think it 

is particularly important that they document the places where 

schools are out of compliance, because otherwise they won’t know 

what needs to be fixed in the future. 

And what we know from the most recent report on improper payments is that one of the key areas in error rates is menus that are 

not meeting the nutritional requirements. So we think the documentation of noncompliance is very important. 

Mr. KLINE. Yes. Thank you for that. 

I, too, support providing technical assistance. Seems like a smart 

thing to do when you have got new rules and new challenges. 

But it does seem a little bit incongruous to then talk about—and 

proudly talk about—95 percent compliance when the process would 

suggest otherwise. And I appreciate your testimony on that. 

Jumping to the inspector general, Mr. Harden, your report covers 

several examples of millions of dollars being lost through improper 

payments. Can you distinguish how much of that is fraud, how 

much of it is waste, how much of—is abuse? And in the end, as we 

look at reforms, do those distinctions matter in how we put forward 

new policy? 

Mr. HARDEN. I guess I would start off from the fraud category. 

In preparing for this hearing I talked to my counterpart for investigations to find out in child nutrition programs is this really a significant thing. 

CEWDOCROOM with DISTILLER

86 

And for child nutrition, it is not a significant fraud risk. The 

number of cases we have are minimal compared to the overall investigative caseload that our investigative office carries. 

The one exception is WIC, and that is where we see fraud 

schemes that are very similar with regard to trafficking that we 

also see in the SNAP program. 

So from a fraud perspective it is not big. I would put it more in 

the abuse or, you know, better management of programs category, 

where, you know, you have to have the right program delivering 

the right oversight to make sure that the benefits get where they 

are supposed to go and they accomplish what they are intended to 

accomplish. 

Mr. KLINE. Okay. Thank you. 

I am going to try to set the standard here, Mr. Chairman, and 

yield back the balance of my time. 

But again, my thanks to the witnesses. 

Chairman ROKITA. I thank the chairman. 

Mr. Scott, you are recognized for 5 minutes. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. Harden, Ms. Neuberger mentioned one of the problems, just 

the logistics of doing this. I understand the families have to apply 

for school lunches at the beginning of the year and they are eligible 

for the rest of the year. 

Exactly who should be doing the oversight? Should you hire compliance officers for 2 weeks, or what? 

Mr. HARDEN. We didn’t exactly address that type of question, 

but, you know, what we did find was that, as other witnesses have 

also talked about, the school food authorities and the people that 

are doing this do have many other responsibilities, and so this is 

not always their first, you know, point of reference in terms of their 

job responsibilities. So it might be a good idea to pursue looking 

at could you have some specialized skill brought in to look at this 

at the very beginning of the year, because they only look at a 3 percent sample, which is a very structured sample based on the— 

Mr. SCOTT. Yes. Yes, but the initial verification is self-reporting 

and the results come in. Should you have people with accounting 

backgrounds hired for the—I mean, how long a period are we talking? We are only talking about a week or 2 when all this information comes in, aren’t we? 

Mr. HARDEN. It is my understanding that does happen in the 

first, you know, 6 months through 6 weeks of the school year, yes. 

Mr. SCOTT. Okay. So, I mean, it would be—you are talking about 

hiring somebody for those 6 weeks? 

Mr. HARDEN. Again, we didn’t specifically look at that, but as an 

idea to look at, I would agree that it is something to be looked at. 

Mr. SCOTT. As you indicated, the school personnel aren’t people 

that have these particular skill sets. 

Mr. HARDEN. Right. When we looked to see how they followed 

through in verifying income we found, you know, examples, where 

they didn’t follow up, they didn’t ask the questions even though 

there might be information available on the application that would 

indicate the household has more income than they do. 

Mr. SCOTT. That is if they have the knowledge background of 

knowing what is suspicious and what isn’t. 

CEWDOCROOM with DISTILLER

87 

One of the things that Ms. Neuberger mentioned is the cost-effectiveness of the cure. In a school, how much money are we potentially saving if we hired accountants and CPAs to do this information—to get this information? 

Mr. HARDEN. I think the overall improper payment rates for 

School Lunch is in the $1.4 billion category, so, I mean, it would 

be a significant amount of money if they were meeting their reduction targets, if they were meeting what they were required to for 

improper payment reporting. 

Mr. SCOTT. Right. But how many people would you have to hire 

all over the country to accomplish that? 

Mr. HARDEN. That I would have to give some thought to and get 

back to you on that. 

Mr. SCOTT. Now, there are also underpayments, as I understand 

it, so if they did all the work they would be identifying money that 

we actually should not have collected. 

Mr. HARDEN. Yes. When they do the sample, the 3 percent sample, they do identify students that should be getting free meals that 

are having to pay for meals, so it works both ways. 

Mr. SCOTT. And would a lot of—how many people would—because the information needs to provided, how many people would 

not receive the free lunch because they just don’t complete the 

process? 

Mr. HARDEN. In the school year that we looked at there were 55 

percent of the ones that were asked to provide information that did 

not respond. So when they did not respond they were kicked out 

of the program. 

Mr. SCOTT. So you are talking about losing half the students in 

free lunch because of the logistics of applying? 

Mr. HARDEN. Because they did not provide the income documentation that they— 

Mr. SCOTT. Right. And when you got—we are all politicians up 

here trying to get people to register to vote. It is a hassle because 

they just don’t go—want to go through the process. 

When you have all of these extra steps to take, some people will 

not comply. So are you talking about a potential 50 percent loss in 

students who would qualify if they provided the information, just 

never get around to providing the information and lose their access 

to free lunch? 

Mr. HARDEN. It is my understanding that yes, some of them 

would be able to qualify. In other instances, others would not. 

Mr. SCOTT. And 50 percent would lose that eligibility? 

Mr. HARDEN. In the school year that we looked at that is the 

number that didn’t respond, so yes, they didn’t—they lost— 

Mr. SCOTT. So we have kind of policy questions. We can get better accuracy, but a lot of students wouldn’t participate. Is that the 

question we have before us? 

Mr. HARDEN. I am sorry, I didn’t hear the question. 

Mr. SCOTT. If we got the information perfectly straight, we could 

lose 50 percent of the participation? 

Mr. HARDEN. Or, if I am understanding your question, you could 

have that many more that were participating, too, if they qualified 

for the program— 

CEWDOCROOM with DISTILLER

88 

Mr. SCOTT. Right. But the fact is they—a lot of people will not 

supply the information and will lose eligibility, and that number 

could be as much as 50 percent of those participating. 

Mr. HARDEN. Yes. 

Chairman ROKITA. Gentleman’s time is expired. 

Mr. Thompson is recognized for 5 minutes. 

Mr. THOMPSON. Thank you, Chairman. Chairman, thanks for 

this incredibly important hearing. 

And thank you, to the panel of witnesses, for bringing your expertise. 

I am heartened. I appreciate your testimony, your written and 

your verbal testimony. I am kind of heartened that many of our nutrition programs we are looking at sounds like while there may be 

some issues, it is kind of minimal. Others, in terms of significant, 

is, if I heard correctly, specifically trafficking of food commodities 

obtained by the WIC and SNAP program. 

You know, and I think that is important that we look at that. 

I don’t have a problem with the title of this hearing because I— 

every dollar that we—that is abused or fraudulently obtained is a 

dollar of food out of the mouth of someone—some child, some person, some citizen that needs it. 

I know when my wife and I were just starting out in life, we 

were early 20s, we didn’t have much. And we were blessed with our 

first son. Today he is a 30-year-old pastor, but we were WIC-eligible, and those—it served a very important—it plugged a very important hole financially, in terms of assuring that Parker and 

Penny had the nutrition. 

And so, but I take very seriously any type of fraud and abuse 

with these programs because it is taking mouth out of the food of 

those who are truly deserving and eligible. 

Mr. Harden, in your testimony you discuss the issue of improper 

payments in the National School Lunch Program and the costs of 

error rates to taxpayers. And I agree that increased accountability 

will strengthen this program and others like it, but we would remiss if we didn’t acknowledge the amount of work the schools have 

to do to verify income, especially in districts that have a high number of kids who qualify for free or reduced meals. 

And aside from direct certification, is there anything the USDA 

is looking at or doing to share best practices on income verification 

between both states and also with local districts? 

Mr. HARDEN. Yes, sir. In response to our most recent report they 

provided some of those other opportunities or other initiatives that 

they were trying. It is also why we were agreeable to look at other 

alternatives other than providing income documentations we recommended. 

Some of those things that are—the reforms or initiatives that 

they are trying but we haven’t looked at yet but do appear to be 

good alternatives are their improved oversight and data collection, 

where they are doing a risk-based analysis on a more frequent 

basis, where they are going to do more reviews or a second review 

if they know a school system has a high error rate. 

A third initiative that I thought was a good one is that they have 

proposed rules on training cafeteria workers or people at the local 

CEWDOCROOM with DISTILLER

89 

level so that they know more about how to look for errors and inconsistencies. 

Mr. THOMPSON. Very good. I appreciate that, what the agency is 

doing. 

Ms. Brown, you—thank you for your work you have done to improve government performance and services to children, families, 

and individuals. Under the WIC program, can you point to specific 

areas and the way the program is implemented that allow for or 

invite waste, fraud, and abuse? 

Ms. BROWN. Well, as you know, what we looked specifically at 

this time was the possibility of online formula sale, and the reason 

we looked at that was because of the vast increase in e-commerce, 

and that creates new opportunities. And that is the trick with situations like this with fraud is to make sure that the entities that 

are managing the program are staying one step ahead of the others 

who may be more creative in thinking of ways to abuse the program. 

The other situation in the WIC program that I think Mr. Harden 

talked about was fraud on the part of the vendors or the providers 

of the WIC food products. We haven’t done any work in that area 

in a number of years, but I know that has been a concern on the 

part of the I.G. 

Mr. HARDEN. Yes. In a recent report where we looked at vendor 

management in the WIC program we saw that they weren’t—that 

FNS wasn’t using its management evaluations and that tool to 

oversee things in the way they should. 

By not doing so, they were not timely disqualifying vendors that 

should be disqualified. They weren’t investigating high-risk vendors that should be looked at. And they weren’t using the reciprocal disqualification that would also go with SNAP retailers. 

Mr. THOMPSON. My final question really has to do with the abuse 

of the categorical eligibility and that—and I know that is something we have relied upon and has some benefits, in terms of efficiency. And I just wondered, are there any conclusions or findings 

of why those inaccuracies exist? Obviously we had this robust debate as part of the farm bill, as well, with the SNAP program. 

And, Ms. Lucas-Judy? 

Ms. LUCAS-JUDY. So if I understand your question, you are asking why there are errors with categorical eligibility? 

Mr. THOMPSON. Well, actually, I am about ready to be cut off by 

the chairman so— 

Chairman ROKITA. Yes. I am sorry. The gentleman’s time is— 

Mr. THOMPSON. Look forward to talking with you more about 

that issue. 

Ms. LUCAS-JUDY. Okay. 

Chairman ROKITA. Gentleman’s time is expired. 

The Gentlelady from Oregon is recognized for 5 minutes. 

Ms. BONAMICI. Thank you very much, Mr. Chairman. 

And I want to thank you, Chairman Rokita and Ranking Member Fudge, for holding this hearing. It has been an interesting discussion, and certainly we can all agree that if there are improper 

payments being made we need to address that issue. 

I just want to address the title of the hearing for a moment, because that is a topic that has come up. ‘‘Fraud’’ is a very harsh 

CEWDOCROOM with DISTILLER

90 

term and it incorporates an intent. And I don’t want the public to 

think that there is fraud in the School Lunch Program if we 

haven’t shown that. 

And, Mr. Harden, you sort of clarified that there may be some 

risk of fraud in the WIC program, but we are not really talking 

about this perception that, unfortunately, the title of the hearing 

may convey. So I just wanted to clarify that when we are talking 

about this fraud, Mr. Harden, you said that the significant risk is 

in the WIC program. 

And it is problematic, and I noticed, Ms. Brown, in your—if it is 

in your testimony—you have a couple of examples of posts advertising WIC-provided infant formula for sale, and one family needed 

$35 because their infant was picky, and the other one wanted $65 

for their formula that their kids aren’t consuming. I would question 

whether there was really intent to defraud in those advertisements. 

So let’s clarify that we—if there is abuse and if it is against the 

law, that is very different from someone intentionally committing 

fraud. 

So, given that about one in five eligible children are currently not 

receiving free or reduced-price lunch, I want to make sure that our 

efforts to address improper payments, which include underpayments as well as overpayments, coincide with efforts to reach more 

eligible families. Because it is clear that the positive benefits of 

good nutrition in school, after school, in the summer, and in child 

care settings are undeniable. 

So, Ms. Neuberger, you talk about the schools’ use of direct certification that is more common, and you cite the share of paper applications that has fallen from 76 percent to 55 percent from 2007– 

2008 to 2012–2013, suggesting there is wider use of direct certification. And I know the GAO found that 89 percent of children who 

received SNAP benefits are directly certified. 

Now, in my state of Oregon less than 80 percent of eligible children are directly certified, so can you discuss the challenges that 

remain to enrolling more children through direct certification? Can 

we learn lessons from high-performing states? 

And I want to save time for another question as well. 

Ms. NEUBERGER. Sure. That is a really important point. 

States and school districts have come a long way in terms of 

making better use of the highly reliable data from other programs. 

Using direct certification reduces errors and makes the program 

simpler to run for schools and simpler for families to get connected 

with. 

At the same time, there is a lot of room for improvement. You 

talked about Oregon’s situation. Only 12 states, in fact, currently 

meet the national performance standards that Congress put in 

place. That means that there are lots of children who could be 

automatically enrolled, and there is a lot of room for simplification 

there. 

There are also students who are putting case numbers down on 

applications. All of those children could be automatically enrolled. 

That would be another important simplification. 

Fortunately, there are resources available. USDA has grants 

available. They provide a lot of technical assistance. They do and 

promote peer-to-peer sharing. 

CEWDOCROOM with DISTILLER

91 

Ms. BONAMICI. Thank you so much. 

And, Ms. Neuberger and Mr. Harden, I wanted to ask you about 

the new design of the traditional paper application. Can you explain the development process for that application? 

And certainly preventing errors is the way to go, rather than, 

you know, coming in afterward and saying, ‘‘Wait, there are overpayments or underpayments.’’ So can you talk about what are some 

of the common errors that the new application is designed to prevent, please? 

Ms. NEUBERGER. Sure. So the way applications work is they have 

to meet certain requirements, but states and districts don’t have to 

use a particular form. 

And we have periodically done very thorough reviews of applications in use, and they have been a mixed bag. Some of them don’t 

follow the program rules. They are certainly not all user-friendly. 

USDA went through a thorough process, working with the Office 

of Personnel Management’s Innovation Lab, to test out changes. So 

they were hoping to accomplish two things: to make it easier for 

families to understand what is being asked of them—there is very 

clear evidence from the reports that USDA has done that families 

don’t understand what is being asked of them. Sometimes they 

over-report income; sometimes they under-report income and disqualify themselves. So— 

Ms. BONAMICI. And I don’t mean to cut you off, but I want to 

know, Mr. Harden, how successful do you expect this change to be, 

and when will we know if it is making a difference, this new paper 

application? 

Mr. HARDEN. It is something that we have not looked at yet, and 

so I don’t have a definite answer on that. But I would agree, from 

what they are proposing it looks to be a positive step forward. We 

just have to look at it in the future. 

Ms. BONAMICI. Terrific. And again, emphasis on prevention is important. 

I look forward to following up on your recommendations, Ms. 

Neuberger, about positive steps that we can take. It is really important. 

Thank you, Mr. Chairman. I yield back. 

Mr. THOMPSON. [Presiding.] Thank the gentlelady for yielding 

back. 

Now I am pleased to recognize the gentleman from Florida, Mr. 

Curbelo, for 5 minutes. 

Mr. CURBELO. Thank you, Mr. Chairman. 

And I thank our leadership for raising this important issue. I 

served on the Miami-Dade County School Board for 4 years, and 

oftentimes families came to my office complaining about what they 

perceived was rampant abuse in a lot of these programs. So this 

is an important issue. 

Any time someone cheats, whether it is an individual or a company, in any of these programs, it is low-income families, poor families that are losing out. It is the U.S. taxpayer that is being defrauded. So I appreciate this very important conversation. 

And, Mr. Harden, I want to hone in on WIC, since it is the program where there is some evidence of concrete fraud. And I want 

to ask you about the report the GAO published in 2013 regarding 

CEWDOCROOM with DISTILLER

92 

the eligibility determination process for WIC applicants at the 

point of enrollment. 

The GAO enumerated a few concerns in that report, including inconsistent income criteria for access into the program. The report 

cites allowable discretion given to state agencies in determining income status for a prospective beneficiary at the time of application. 

Does the agency believe that allowable discretion means that 

local agencies can use any definition of ‘‘current income’’ or ‘‘household’’ that they would like in any given circumstance? Are there 

guidelines on when they can or cannot use certain definitions, and 

are any of these guidelines mandated? 

Mr. HARDEN. I am going to ask that I can follow up on that because I haven’t done—we haven’t done specific work in that area 

and so I would like to go back and look a little more closely at what 

the criteria are. 

The most recent work that we did on vendor management in the 

WIC program also looked at participant eligibility. We did not find 

issues with participant eligibility, so I would need to go back and 

look a little closer at that to see if I can answer your question. 

Mr. CURBELO. Okay. I look forward to hearing from you on that. 

I also— 

Ms. NEUBERGER. Excuse me. I just wanted to let you know that 

since that— 

Mr. CURBELO. Please. 

Ms. NEUBERGER.—report, USDA has actually issued updated 

guidance providing much more clarity, and they have embarked on 

reviews looking specifically at whether states and districts are— 

states and clinics are following that guidance. 

Mr. CURBELO. Thank you. 

And this question is for all of you, and if you have time I would 

like to hear from all of you. 

Direct certification: Has it helped prevent fraud, waste, and 

abuse in these programs, or has it made the programs more susceptible to it all? I would like to get your impressions on that. 

Ms. NEUBERGER. It has definitely reduced opportunities for error. 

The application process in school meals is a very error-prone process. Families fill out those applications on their own without much 

help and, as I said, don’t necessarily understand what is being 

asked of them. 

Using data from other programs where they are doing a very rigorous income determination improves the accuracy of the program. 

Mr. CURBELO. Thank you. 

Mr. HARDEN. And I would agree that it would seem to improve 

the accuracy. That was part of their alternatives that they proposed in response to some of our recommendations that they are 

moving forward on. We will have to look at that in the future to 

see how it went. 

Ms. BROWN. Yes. I would just like to say that the—whenever we 

see that kind of eligibility that is linked to eligibility determinations for another program, the most important question is how 

solid or sound is the original program’s eligibility process? And in 

the case of situations like SNAP, where they are building so many 

new avenues for direct certification, SNAP does have a much more 

CEWDOCROOM with DISTILLER

93 

rigorous process than some of these other programs, particularly 

school meals. 

So it is not perfect, but it has a lower error rate and so it provides a good foundation. 

Ms. LUCAS-JUDY. And I would agree with that, as well. The 

SNAP program has a much lower improper payment rate than the 

school meals program, and in the study that USDA just released 

they found that the certification errors—the errors for people being 

put into the wrong category of eligibility—was much lower with direct certification than it was with the application process. 

Mr. CURBELO. I thank you all for your testimony. 

And, Mr. Chairman, I yield back. 

Mr. THOMPSON. Thank the gentleman. 

Now I am pleased to recognize the gentlelady from Massachusetts, Ms. Clark, for 5 minutes. 

Ms. CLARK. Thank you, Mr. Chairman and Ranking Member 

Fudge, and to all the panelists for being with us today on this important topic. 

As we look across our country and see almost 16 million children 

going to bed hungry every night, and we know on this committee 

the direct impact that has on their ability to get to school and be 

ready to learn. When you are hungry, that is almost impossible to 

do, and we have seen it across test scores that go up almost 17 percent if you are receiving breakfast at school, reduces absenteeism. 

So I think this is a critical topic on how we can do both things. 

We have to reduce error. 

When families are not eligible and receiving this benefit, we 

know that takes it away from families that need it the most. But 

we also—and one of the surprising things to me was in Ms. 

Neuberger’s testimony—about one in four children who are eligible 

are not receiving benefits. Is that the right statistic? 

Ms. NEUBERGER. Of the applications that were denied— 

Ms. CLARK. Right. 

Ms. NEUBERGER.—one in four were actually eligible for benefits. 

Ms. CLARK. Okay. So a smaller number than the way I phrased 

it. But still, that is a large underpayment of benefits. 

So following up on what we have been talking about with this 

application, seems to be the real sticking point as far as the difference between SNAP benefits having less rates of error. If we can 

roll out this simplified application form, do you think that is our 

best way in the short term to guarantee accuracy plus access for 

children? 

Ms. NEUBERGER. I think the most important first step is to reduce the number of children going through that application process 

in the first place. So we talked about improving the use of SNAP 

data. 

In addition, there is a demonstration project using Medicaid 

data. That is only going on in seven states. That could be expanded. 

And then for the children who end up going through the application process, certainly a better application is a step in the right direction. That application is available right now to any school district. 

CEWDOCROOM with DISTILLER

94 

And USDA is developing a new model electronic application, 

which also offers opportunities to make the process clearer and less 

error-prone. 

Ms. CLARK. And with the electronic application, would that be 

done by families on their own or would there be someone to help 

walk them through that? 

Ms. NEUBERGER. It could be either way. But one of the benefits 

of electronic environment is that it can ask probing questions, so— 

Ms. CLARK. And it can give prompts— 

Ms. NEUBERGER. Yes. That is right. 

Ms. CLARK.—to help, because I think there is a lot of confusion 

over net income, gross income, those sort of definitions that we are 

asking families to do on their own. 

Ms. NEUBERGER. Exactly. 

Ms. CLARK. What else do you see as a key area for increasing access? How else can we increase access to these School Lunch and 

Breakfast programs? 

Ms. NEUBERGER. One option that we haven’t talked about yet is 

a relatively new provision that is kind of a twist on older options 

called the Community Eligibility Provision. This essentially is an 

option available only to very high-poverty schools, but essentially, 

data from other programs—again, the highly accurate data—is 

used to set the school’s reimbursement rate. In exchange, they no 

longer collect applications or track who is in which meal category 

at the school. 

It reduces the opportunities for error and it streamlines administration. So schools have more funds available to put into meals and 

have to spend less on paperwork. Also, children in those schools 

have better access because they don’t have to go through an application process. 

Ms. CLARK. Thank you. 

I yield back. 

Mr. THOMPSON. Thank the gentlelady. 

And I am pleased to recognize the gentleman from Georgia, Mr. 

Carter, for 5 minutes. 

Mr. CARTER. Thank you, Mr. Chairman. 

And thank all of you for being here. 

Mr. Chairman, I will be very brief. I have just a couple of questions. 

Mr. Harden, you mentioned in your opening testimony about a 

fraud ring in Georgia. Very quickly, can you describe what happened there to me? I am from Georgia, so I am obviously very interested. 

Mr. HARDEN. I may have to follow up to have our investigators 

talk to you more— 

Mr. CARTER. Okay. 

Mr. HARDEN.—completely about this, but it is basically— 

Mr. CARTER. Very briefly. 

Mr. HARDEN. Very briefly, it was selling benefits—or working 

with beneficiaries to sell their benefits for pennies on the dollar, 

just like they do with SNAP, paying 50 cents for them and giving 

them cash. 

Mr. CARTER. And giving them cash. And then what do they do 

with it? 

CEWDOCROOM with DISTILLER

95 

Mr. HARDEN. I would have to get back to you on that. I am not 

well-versed in the investigation details. 

Mr. CARTER. So they buy them, but then what do they do with 

the coupons? 

Mr. HARDEN. Oh, the people that are trafficking them then can 

redeem them for the full value. 

Mr. CARTER. Redeem them where? 

Mr. HARDEN. They would set up stores and they would be WIC 

vendors. And so they would run the benefits through and capture 

the whole amount for themselves and pay the recipients less— 

Mr. CARTER. Okay. Okay. I am a WIC vendor in my retail—or 

I was in my retail business, but do you ever audit them to see if 

they are indeed buying those products and—that they are getting 

reimbursed for, that they are turning the coupons in for? 

Mr. HARDEN. Right. And the most recent work that we have done 

on vendor monitoring is where FNS wasn’t doing the oversight they 

needed of the vendors themselves to make sure that those that 

should be disqualified are disqualified, the high-risk vendors are 

being looked at, and that if you are disqualified under SNAP that 

you are also disqualified under WIC. 

Mr. CARTER. Okay. 

Ms. NEUBERGER. There have actually been some very serious 

issues with vendor errors and fraud in Georgia and elsewhere. And 

one of the points that came up earlier is whether it makes sense 

to—how much to focus on participant fraud. 

And one of GAO’s recommendations in this regard was actually 

very important. They recommended that the first step is trying to 

assess the extent of the problem before shifting resources. An important reason to do that is because USDA has focused their efforts 

on preventing vendor error and fraud, and taking resources away 

from them may not make sense. 

Mr. CARTER. Okay. But I don’t think I have ever been audited 

to see, and, you know, we redeem WIC coupons all the time but 

I don’t know that I have ever been audited in my business to see 

that I am indeed making those purchases from a wholesaler or 

wherever. 

Ms. NEUBERGER. There is an ongoing monitoring process— 

Mr. CARTER. Not that I want to be audited. 

[Laughter.] 

Ms. NEUBERGER. I was going to say, in general states— 

Mr. CARTER.—make sure you understand that. 

Ms. NEUBERGER.—states focus their resources on high-risk vendors, so maybe you are doing a good job. 

Mr. CARTER. Well, let me ask you, Ms. Brown, very quickly, what 

about recipients who were caught selling their coupons? What is 

the punishment? 

Ms. BROWN. Well, one of the things that we saw was there is a 

range of options across the states that we looked at. We looked at 

policy manuals for states, and we saw everything from a warning 

letter in a number of states to benefit termination from 6 to 12 

months in others states. 

What we found in this program as well as other programs like 

SNAP is that the likelihood that a local prosecutor would get inCEWDOCROOM with DISTILLER

96 

volved and actually want to take some legal action against that 

program, that benefit recipient, is pretty low. 

Mr. CARTER. You said a warning letter? 

Ms. BROWN. Yes. 

Mr. CARTER. Give me a break. A warning letter? I mean, seriously. They know that is wrong. 

Ms. BROWN. States have flexibility— 

Mr. CARTER. Okay. 

Ms. BROWN.—the way the program is set right now. 

Mr. CARTER. And one last question. 

And, Mr. Chairman, if you will indulge me for a moment, I promised a constituent I would ask this, and if it is outside the realm 

of what we are doing I apologize. 

But many of the food banks now that are participating in the 

Child and Adult Care Food Program and the Summer Food Service 

Program, they are telling me now that they are having to do yearlong RFPs in order to buy—in order to procure the food. Are any 

of you familiar with that? 

Okay. Well, I apologize. Just FYI, that is causing a lot of vendors 

to drop out, therefore causing the cost to increase. We are here 

talking about waste, fraud, and abuse, and that, to an extent, 

would help with the efficiency of the program. So I hope that is 

something that you will look at, as well. 

Mr. Chairman, that is all I had. I yield back the remainder of 

my time. 

Mr. THOMPSON. The gentleman made up for that last question by 

yielding back. 

I am now pleased to recognize the gentleman from California, 

Mr. Takano, for 5 minutes. 

Mr. TAKANO. Thank you, Mr. Chairman. 

Ms. Neuberger, I think we all can agree that helping struggling 

mothers and hungry babies and young children is a good thing to 

do, and it is good public policy. I don’t think anyone disagrees with 

that, and I think we all want an efficient, well-run program that 

doesn’t allow for abuse. 

We invest considerable money in the WIC program, and you recently authorized—authored a report summarizing the research on 

WIC. Can you speak to the return on an investment in the WIC 

program? 

I know we want to minimize unnecessary losses, but can you 

comment on the—what the return on investment is, and is this 

program a good use of taxpayer dollars in general? Is it good public 

policy? 

Ms. NEUBERGER. Absolutely. One of the most striking things 

about WIC is that it is not only highly effective at things like improving birth outcomes and even having positive impact on cognitive development, but it is also a very cost-effective program. 

The funds that are provided for services are limited so that they 

increase only with inflation, and food costs, which are the bulk of 

WIC expenditures, actually rise much more slowly than inflation. 

So over the last 10 years food costs have risen by 28 percent; WIC 

food costs have risen by only 16 percent. It is a very sound investment. 

CEWDOCROOM with DISTILLER

97 

Mr. TAKANO. Great. So while we want to make sure that people 

aren’t doing untoward things online, and we are not really sure 

that is happening, of course, we want to empower law enforcement 

to make sure that people aren’t abusing this program. The fact that 

it is good public policy and that it is also helping us save dollars, 

in terms of adverse health consequences to malnutrition—children 

with malnutrition, babies with malnutrition. 

Along those lines, childhood obesity has more than doubled in 

the past 30 years and poses a serious health risk. Also, there is 

more and more research coming out showing the long-term and 

sometimes irreversible effects of toxic stress on babies and young 

children living in poverty. 

The WIC program provides specific foods, and nutrition education, and breastfeeding support to low-income pregnant women 

and very young children. What does the research and nutrition 

science show regarding how WIC benefits—WIC benefits the physical, mental, and economic well-being of young children, and how 

might WIC be of particular benefit to young children who experience the stressors of living in poverty? 

Ms. NEUBERGER. There is actually an extraordinary body of research showing WIC’s effectiveness on a range of measures. So participants tend to eat better—more fruits and vegetables, more 

whole grains, lower-fat dairy products. They follow better infant 

feeding practices, like delaying the introduction of solid foods or 

cow’s milk. 

In addition, WIC participation is associated with healthier births 

and lower infant mortality, which are very important effects. WIC 

participants who are children have higher immunization rates than 

other low-income children. In fact, their rates are comparable to 

those of more affluent children. 

And recent research has focused on effect on cognitive development. So 2-year-olds whose mothers participated in WIC when they 

were pregnant performed better on cognitive tests, and those results continue to show up during the school years on reading tests. 

So very profound effects in a number of areas. 

Mr. TAKANO. So the research is extensive. I mean, there is widespread scientific agreement in the research arenas that show the 

benefits of this government policy? 

Ms. NEUBERGER. Yes. 

Mr. TAKANO. And the key for us is to try and get it right to remove all doubt from the public’s mind that the program is being 

efficiently administered. But from what I am hearing, I mean, 

the—addressing the needs of a 2-year-old, making sure—2-year-old, 

making sure that 2-year-old has got all the right nutrition, is going 

to pay off in terms of that child’s educational success. 

And of course, I mean, we can do the economic analysis and 

know that the more children that succeed because they have had 

a firm foundation in nutrition, it is going to cost us less educationally, it is going to cost us less in terms of the health care of that 

child into adulthood. The obesity that affects young children often 

follows them into adulthood. And a lot of these eating habits are 

established at a very, very early age. 

I thank you for your testimony, and thank you for the opportunity for us to examine this program. 

CEWDOCROOM with DISTILLER

98 

Mr. Chairman, I yield back. 

Mr. THOMPSON. Thank the gentleman. 

Now recognize the gentleman from Virginia, Mr. Brat, for 5 minutes. 

Mr. BRAT. Thank you, Mr. Chairman. I have no questions. I yield 

my time back to the chair for questions. 

Mr. THOMPSON. Gentleman yields? 

Mr. BRAT. Yields. 

Mr. THOMPSON. For 5 minutes. I— 

Mr. BRAT. Five minutes. 

Mr. THOMPSON. I appreciate that. 

Wanted to follow up where I—where the chairman so appropriately cut me off last time. We were kind of going down the path 

of looking at categorical eligibility. I mean, I think that is an important tool that was created by past Congresses for efficiency purposes, but we want to make sure it is accurate. 

And so this sounds like there were some concerns with some of 

the nutrition programs. I would be curious to see which ones where 

we found evidence of kind of abuse when we have done the audit 

on individuals who were categorically eligible according to the provision but when the audit was done not so much, you know, when 

we really started to look at the facts. 

And so just briefly, where we have seen evidence of abuse of 

that, and—or fraud, I guess I would classify that as fraud. But 

more importantly, are there any findings or recommendations—excuse me—obvious recommendations so that essentially we can have 

a little more confidence that category eligibility is accurate? 

Ms. LUCAS-JUDY. So in our work we did look at some of the applications that indicated categorical eligibility, and of the six that 

we had in our sample, three of them were not eligible on the basis 

of the information that they provided. 

It is difficult for school districts to determine whether something, 

you know, is actually accurate on the basis of what is in the application; somebody is just checking a box. They are supposed to provide a benefit number, for example, if they are eligible for SNAP 

or some other program. 

So somebody can use a number that looks like a SNAP number. 

They can use a number for, you know, a former benefit that they 

are not receiving anymore and get reviews that way. 

So we made recommendations that USDA consider sampling categorically eligible applications as part of a standard verification 

process, and the agency said it would consider doing that. 

Mr. THOMPSON. Very good. Sounds like an important provision, 

because category eligibility, like I said, I think it has tremendous 

efficiency, little more ease for people in terms of redundancy of applications, but we have to have confidence that it is working. And 

so I appreciate that. 

Someone had mentioned— 

Ms. NEUBERGER. Point out there— 

Mr. THOMPSON. Please, go ahead. 

Ms. NEUBERGER. All of those children could be automatically enrolled through direct conversations with a relevant agency. They 

should not be going through the application process at all. 

CEWDOCROOM with DISTILLER

99 

So that would actually be a better way of ensuring accuracy. And 

then states, if there ever were a questionable case number, could 

use the kind of verification for cause that you talked about. We 

should be seeing fewer and fewer of those categorically eligible applications. 

Mr. THOMPSON. Just a question of clarification. Someone, or 

maybe more than one, had mentioned about a Medicaid pilot, using 

Medicaid data. And so this is just a—I am looking for clarification 

on this. 

Pilot is being done. Are they just taking if somebody falls in the 

Medicaid eligibility, or are they truly starting there and looking at 

kind of drilling down and looking—are they actually looking at income eligibility within that data? Because when you look at eligibility for Medicaid, especially after the Affordable Care Act, I 

mean, there—I mean, it is approaching six figures depending on 

the size of the family. It is pretty significant. That is rare, but it 

is out there. 

So I was just curious of what are they actually looking at in 

terms of the Medicaid pilot? 

Ms. NEUBERGER. Sure. So the Medicaid pilot is in the school 

meals program. Seven states are participating in it now and they 

can only participate if they are able to look at income within the 

Medicaid system. 

Mr. THOMPSON. So they actually are looking at Medicaid? 

Ms. NEUBERGER. So they have to be able to do data-matching 

and make sure that income is below the— 

Mr. THOMPSON. So it is just not a matter of being basically Medicaid-eligible, but they are actually looking at— 

Ms. NEUBERGER. That is right. 

Mr. THOMPSON.—incomes within—excellent. 

And I will yield back. Thank you. 

And I am pleased to recognize the gentlelady from California, 

Mrs. Davis, for 5 minutes. 

Mrs. DAVIS. Thank you, Mr. Chairman. 

Thank you all for being here. I am sorry I missed the—I guess 

the bulk of the hearing, really, but I wanted to then go back and 

just have an opportunity to look a little bit more at the community 

eligibility program and what we have learned from that. I know we 

are looking at waste, fraud, and abuse, but we are also interested 

in efficiency, and where we are able to have the dollar, really, going 

for what we want, which is nutrition for children. 

Do we know more or should we be really tasking agencies to do 

more to understand the impact of that overall? You know, in terms 

of studies, in terms of really being able to look over a number of 

years and what the impact of that is, what do we know about that? 

And can you still be challenged in terms of—you know, you reached 

the wrong kids, even though those kids might have had an impact 

on the entire school because they also were in a better position? 

Ms. NEUBERGER. So community eligibility is one of these options 

that make the programs much simpler to run. It simplifies the 

rules. It is highly accurate as a result of that, and it means that 

schools don’t have to devote as much resources to administrative 

processes and can really focus on providing healthy and appealing 

meals. 

CEWDOCROOM with DISTILLER

100 

So it is very positive. Schools have had very positive experiences 

that have tried it. 

Mrs. DAVIS. I guess what I am looking for— 

Ms. NEUBERGER. At this point, though, only about half of eligible 

schools are participating, so there is lots more room for schools to 

benefit. 

Mrs. DAVIS. All right. But when we say that they are doing better, how engaged are the studies in really being able to track 

achievement? In what ways are achievement being— 

Ms. NEUBERGER. So USDA did a comprehensive evaluation. It 

did not look at achievement. It looked at participation in meals; it 

looked at error rates and factors like that. 

We certainly hear anecdotally from schools about improved attendance and reduced tardiness, and from teachers that they are 

very enthusiastic about the results that they see in the classroom, 

but those are anecdotal at this point. 

Mrs. DAVIS. Do you think we should be looking at that issue? I 

mean, it seems to me that it is really quite possible to look at studies and not to necessarily use school scores or—I mean, there are 

a variety of ways that you can tell whether a child is able to apply 

their time in school to doing better, and whether or not that carries 

over. Does it carry over from week to week? Does it carry over in 

the summer time? 

You know, all those things, and I am hoping that we would have 

a chance to look at something— 

Ms. NEUBERGER. Well, there has been quite a lot of research on 

the contribution that school meals can make. So, for example, eating a breakfast at school is associated not only with better diets 

and reduced absenteeism, but also better academic performance. 

Mrs. DAVIS. Well, we will hope that we are able to move forward 

with that. 

And the other question is, we know that the WIC program—and 

I think many people have addressed this, in terms of the efficiency 

of the program—are there some lessons that we could and should 

be learning from those efficiencies that would carry over into a 

school lunch program that we really haven’t applied? 

Ms. NEUBERGER. Well, one thing that we haven’t talked about 

WIC that is—in WIC that is actually a very important transformation going on within that program is a move toward electronic benefits. 

So right now most states are still actually using paper vouchers 

that participants have to take to the store when they are grocery 

shopping. That is a complex process, and it is error-prone. 

States are required to transition to electronic benefits by 2020, 

and that is a tremendous improvement both from a program management and integrity perspective and also from a participant perspective. 

Also in WIC there are, in general, opportunities to rely on data 

from other programs, as we have talked about in school meals, is 

very promising— 

Mrs. DAVIS. The EBT program, which we actually have had a 

bill, helping families in the summer time to be able to access meals 

that children otherwise wouldn’t be able to get. They are not able 

to get to some of the programs that are active in the summer time, 

CEWDOCROOM with DISTILLER

101 

and one could assume that if a child is really struggling and having 

issues around hunger, that they may not be really, you know, 

learning in the summer time from some basic opportunities around 

them. 

Is this something that you think is a good idea and we should 

follow through with that? 

Ms. NEUBERGER. It is absolutely important to make sure that 

children get the nutrition they need all year round, not just 

through school meals. 

Mrs. DAVIS. Thank you, Mr. Chairman. 

Chairman ROKITA. [Presiding.] Gentlelady yields back. 

I will now yield myself 5 minutes. 

Ms. Brown, let’s start with you. 

By the way, thank you all, again, for your testimonies. This is 

very educational for me. 

You, Ms. Brown, have been before us several times, and at one 

of our previous hearings you mentioned that one challenge to the 

implementation of the new school meal regulations was the overwhelming volume of guidance issued. Yet, for WIC you are recommending more guidance. 

Now, I know these are different programs with different participants, but can you address the disparity for us? 

And then I want to turn the same question to Ms. Lucas-Judy, 

because you advocated for more guidance, as well. 

Go ahead. 

Ms. BROWN. Well, I think the distinction I would like to make 

there is in the school meals program there was a flood of guidance 

that set out expectations and then created some changes based on 

what was initially issued. And while the people on the receiving 

end appreciated the extra help, it was confusing to them sometimes 

and a little overwhelming. 

In the case of the WIC program, what we are asking for is the— 

with the full realization that there are 10,000 clinics across the 

country that are implementing this program, and that the states 

are receiving funds from USDA and it is their job to oversee these 

clinics and how they are implementing it, we are making suggestions that USDA would do a better job of making sure that the 

states were overseeing the programs accurately. 

So basically all we are asking USDA to do is improve their oversight through what they are asking. For example, when they are 

asking the states to submit a plan once a year, in that plan we are 

suggesting that USDA, and they have agreed, would require the 

states to be more clear on what they are doing to monitor some of 

the abuses that we identified. 

Chairman ROKITA. Thank you. 

Ms. Lucas-Judy, anything to add to the idea of how much guidance is too much? 

Ms. LUCAS-JUDY. Sure. USDA already has some guidance out for 

conducting for-cause verification, and what we found in talking to 

school district officials is that they really didn’t know what it was 

they were supposed to be looking for. You know, for example, what 

are some red flags that would indicate that an application is questionable? 

CEWDOCROOM with DISTILLER

102 

And so we were suggesting—USDA is in the process of collecting 

data on outcomes of for-cause verifications to find out, you know 

what kind of results they are getting, and so we were suggesting 

that they look at actually distinguishing the results for the forcause verification versus the standard verification to figure out if 

there are places where they could use additional guidance, additional clarification to help the states—help the school districts do 

those reviews more effectively. 

Chairman ROKITA. Okay. Thank you. 

And continuing on with you, Ms. Lucas-Judy, I continue to be 

concerned about the certification process, as well. Your report 

seems to indicate that some of the cases you found were indeed intentional. Not might be your word. That is mine. 

But when you give an example that someone who is making 

$26,000 a year in fact reported making $52,000 a year, in Indiana 

I call that intentional. In your opinion, do we know how big a problem there is out there with regard to fraud, abuse, whatever word 

you want to use, in the program? And is USDA close to figuring 

that out? 

Ms. LUCAS-JUDY. Well, as you mentioned, you know, fraud involves the willful intent to deceive in getting a benefit, and that 

was something, you know, where we found indicators of potential 

fraud, we referred them to USDA, to the states, and to the school 

districts for further investigation and action there. 

As far as the amount of fraud that might be out there, the overall improper payment rate for the School Lunch Program, for example, was estimated at about 15.25 percent. Not all of that is going 

to be fraud; some of that could be due to other factors. 

So USDA just recently released a study where they looked at 

some of those different elements of the improper payments and 

they found that about 8 or 9 percent improper payments rate is 

due to certification errors. Of that, about 70 percent results in overpayments. And then of that amount, you have got about half that 

were the result of application errors. So that would be the place 

that they would be looking for potential fraud. 

Chairman ROKITA. Thank you. 

And a follow up, another question for you in the 30 seconds we 

have left: The $1,200 range issue that you brought up, what is your 

solution there? Should the range be broadened, or the threshold be 

broadened, or should we—should it be eliminated? 

Ms. LUCAS-JUDY. That is actually one of the recommendations 

that we made was that USDA do a pilot program to assess using 

data-matching the way that we did to determine, you know, because we found applications that had stated income that was below 

the range when, in fact, you know, we found them to be above the 

range. And if the pilot program was successful we recommended 

that USDA seek legislative authority to expand its certification 

process. 

Chairman ROKITA. Thank you. 

My time is expired. 

I will now recognize Ms. Fudge for 5 minutes. 

Ms. FUDGE. Thank you very much, Mr. Chairman. 

And I thank all of you for your testimony today. 

CEWDOCROOM with DISTILLER

103 

I thank my colleagues for being here and being involved in this 

discussion. 

Let me just for the record say that I understand fiscal responsibility and accountability as well as anyone. I believe that those who 

break the law should be punished. 

I also believe that it is important that when you make recommendations to USDA or any other agency you give them the opportunity to make the corrections, and I appreciate the fact that 

you have done that and USDA has agreed that they want to do it. 

It is important for us to understand a couple of things. One is 

that when we use the words ‘‘waste, fraud, and abuse,’’ we don’t 

use it in defense; we don’t use it in transportation and infrastructure. We use it for poor people. We use it in domestic programs. 

We use it in Social Security, Medicaid, and Medicare. 

We create a narrative that is stereotypical, that is unfair and inaccurate. We are doing it in this committee and we are doing it in 

Agriculture, where I also sit, which has some oversight of nutrition. 

I have come to the point where it is my understanding that the 

only thing we are concerned about is poor people and if they are 

scamming the system. 

We didn’t do it in Iraq and Afghanistan, where we have spent 

more than $800 billion. I don’t recall a hearing about waste, fraud, 

and abuse. Only in these programs. 

I appreciate the fact that you are working very hard to make 

sure that the taxpayers’ money is spent appropriately. I agree with 

what you do. 

I also agree that it is important to feed hungry children. I agree 

with that. 

I agree with the fact that we need to have this oversight in this 

committee. What I don’t agree with is how we go about it, so uneven and heavy-handed. 

And so I want to again thank you for being here. I want to thank 

you for your work. 

But I also want you to understand that this is just not about 

hungry children. This is about how we treat and respect people we 

represent—the taxpayers that send us here. 

Mr. Chairman, I yield back. 

Chairman ROKITA. Gentlelady yields back. 

Now it is time for closing remarks. 

I would like to again thank our witnesses for taking the time to 

testify today. Your comments and your ideas are very much appreciated. 

And I would like to again turn it over to Ms. Fudge for her closing remarks. 

Ms. FUDGE. I have no comments to add. 

Chairman ROKITA. With that, I will offer my closing remarks. 

In addition to the thanks that I just extended to each of you, I 

ask you to continue doing your work. It is important. Most of all, 

it is important to the poor people Ms. Fudge talked about. 

We have limited funds. As a member of the Budget Committee, 

I can definitely tell you that we are broke. And we are broke 

through bad decision-making, quite frankly, but that is another 

hearing. 

CEWDOCROOM with DISTILLER

104 

We need to get limited funds to those children who need it the 

most, and that is our goal here. That should be the goal of all of 

government. 

You have done your jobs in exemplary fashion in that regard. 

Your work needs to continue. 

Please help us. Please help us stay on the USDA and other agencies that need to get these reforms in place so that we can get 

these funds to the kids that desperately need them. 

And the goal, frankly, should be to get the kids off these programs. Our success should not be measured by how many are on 

these programs. Our success should be measured by how many we 

can elevate off these programs. 

So with that, hearing no more—seeing no more business before 

the committee, this committee remains adjourned. 

[Questions submitted for the record and their responses follows:] 

CEWDOCROOM with DISTILLER

105 

CEWDOCROOM with DISTILLER


Insert offset folio 72 here 94551.072
106 

CEWDOCROOM with DISTILLER


Insert offset folio 73 here 94551.073
107 

CEWDOCROOM with DISTILLER


Insert offset folio 74 here 94551.074
108 

CEWDOCROOM with DISTILLER


Insert offset folio 75 here 94551.075
109 

CEWDOCROOM with DISTILLER


Insert offset folio 76 here 94551.076
110 

[Responses to questions submitted for the record follows:] 

CEWDOCROOM with DISTILLER

111 

CEWDOCROOM with DISTILLER


Insert offset folio 77 here 94551.077
112 

CEWDOCROOM with DISTILLER


Insert offset folio 78 here 94551.078
113 

CEWDOCROOM with DISTILLER


Insert offset folio 79 here 94551.079
114 

CEWDOCROOM with DISTILLER


Insert offset folio 80 here 94551.080
115 

CEWDOCROOM with DISTILLER


Insert offset folio 81 here 94551.081
116 

CEWDOCROOM with DISTILLER


Insert offset folio 82 here 94551.082
117 

CEWDOCROOM with DISTILLER


Insert offset folio 83 here 94551.083
118 

CEWDOCROOM with DISTILLER


Insert offset folio 84 here 94551.084
119 

CEWDOCROOM with DISTILLER


Insert offset folio 85 here 94551.085
120 

CEWDOCROOM with DISTILLER


Insert offset folio 86 here 94551.086
121 

CEWDOCROOM with DISTILLER


Insert offset folio 87 here 94551.087
122 

CEWDOCROOM with DISTILLER


Insert offset folio 88 here 94551.088
123 

[Whereupon, at 11:26 a.m., the subcommittee was adjourned.] 

Æ 

CEWDOCROOM with DISTILLER