No. 178 (01/15) Fraud Detection and Investigation [supersedes No. 137 (02/10)]

DOH-CACFP: Number 178 (01/15), Supersedes Number 137 (02/10)

TO: All CACFP Sponsoring Organizations

FROM: Dwight LaDu, 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 CACFP's fraud detection and prevention unit, which seeks to minimize the intentional misuse of state and federal funds.

II. Background Information

1. 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
2. If fraud or abuse is suspected, make referrals for investigations directly to CACFP by calling the toll free hotline at 1-800-942-3858, option 3, to reach the CACFP Investigator.
   • CACFP will use traditional investigative methods to reduce waste, fraud or abuse.
   • Sponsoring Organizations are required to cooperate with CACFP during investigations and to share Program records.
   • CACFP 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 CACFP. Please contact CACFP if you have further questions.