Policy Memo 137

DOH-CACFP: Number 137 (02/10)

TO: All CACFP Sponsoring Organizations

FROM: Lynne Oudekerk, Acting State Director, Child and Adult Care Food Program

SUBJECT: Fraud Detection and Investigation

I. Purpose and Scope

The purpose of this policy memorandum is to notify CACFP Sponsoring Organizations of their responsibility to report suspected fraud or abuse of the Program. This memorandum includes the procedures for referring suspected fraud or abuse to the Bureau of Special Investigations (BSI) in the Division of Nutrition (DON), NYS Department of Health.

BSI is a law enforcement office within DON whose mission is to minimize the intentional misuse of State and Federal funds administered by DON. BSI's fraud detection and prevention is achieved through the use of traditional investigative methods to reduce waste, fraud or abuse.

II. Background Information

1. BSI conducts investigations at all levels of CACFP administration:
   1. Recipients of CACFP benefits including family day care home providers, sponsored child care centers, and children's parents/guardians;
   2. Sponsoring agency staff and independent child care center staff;
   3. State CACFP employees.
2. Fraud or abuse can occur in many ways, therefore Sponsoring Organizations should be aware of the potential for fraud in these circumstances:
   1. Parents/guardians and day care home providers who misrepresent their circumstances to make themselves eligible to participate in CACFP; such as,
      • false income statements, including the failure to report all household earnings
      • enrolling in more than one child care program
   2. Sponsors, child care centers, and family day care homes who submit false claims by:
      • claiming children who are not enrolled or not in attendance
      • inflating meal counts
      • forging child enrollment or household income application forms
      • requiring parents/guardians to bring food for meals and snacks claimed
      • claiming meals that were not served
      • claiming meals on days when the program is closed (such as holidays)
      • submitting the same claim to two different CACFP Sponsors
   3. Sponsor staff is also committing fraud or abuse when:
      • family members are hired as vendors or for professional services
      • staff knowingly submit false claims
      • staff create false identities in order to receive CACFP reimbursement
      • staff use CACFP funds for purposes other than operation of the Program
3. If fraud or abuse are suspected, please follow the procedures below:
   1. Referrals for investigations should be given directly to BSI using the enclosed form or by calling their toll free hotline at 1-877-282-6657.
   2. BSI will open a case and begin contacting Sponsor staff for additional information.
      • Sponsoring Organizations are required to cooperate with BSI during investigations and to share Program records.
      • BSI may request Sponsor staff accompany them on site visits or may visit sites unannounced.
      • Frequently, Sponsors are asked not to take any action until an investigation is completed.
      • The serious deficiency process will be implemented if actual fraud or abuse has been documented. However, a notice of serious deficiency may not be issued until after the investigation is completed.

III. Summary of Changes

This memorandum explains the CACFP Sponsor's role in identifying and reporting fraud or abuse in CACFP. Sponsoring Organizations should make their staff and facilities aware of the process for making referrals of suspected fraud or abuse to BSI. Please contact your CACFP Unit Director if you have further questions.

Enclosure: BSI Complaint Form