WASHINGTON -- Officers of many nonprofit organizations have illegally enriched themselves by pocketing millions of dollars of federal money that was meant to feed poor children in day care homes, federal investigators and state officials say.
The inspector general of the Agriculture Department, Roger C. Viadero, said the nonprofit organizations routinely filed false claims overstating the number of meals served at the homes, which are recruited and supervised by the nonprofit groups. Some of these groups, he said, claimed federal money for meals served to "nonexistent children" in fictitious day care homes, while others extorted money by demanding kickbacks from legitimate day care providers.
"This type of fraud takes food out of the mouths of children," Viadero said, summarizing what his agents had found in more than 3,200 unannounced visits to private day care homes and child care centers that receive federal money.
The federal government spends $1.7 billion a year to provide meals for 2.4 million children in day care. Viadero began a nationwide investigation of the program after a whistle-blower complained about problems at a nonprofit organization in California.
Viadero's office issued a comprehensive audit last month laying out the abuses, which he said were attributable in part to basic flaws in the program's structure that federal officials had not moved fast enough to correct.
The nonprofit groups, known as sponsors, play a critical role as middlemen between the government and day care homes and centers. The sponsors are supposed to monitor the day care homes. They review and pay claims for meals served. And they are supposed to ensure that the meals meet federal nutrition standards.
So far the federal government has filed criminal charges against 44 people, asserting that they defrauded the program, known formally as the Child and Adult Care Food Program. Twenty-eight of them have been convicted or pleaded guilty; the other cases are still open.
Child care advocates see the federal program as a guarantor of quality care. But Viadero said children were often short-changed.
In his audit report, Viadero, a former New York City police officer who worked for 15 years at the FBI, said: "Day care providers and their sponsors were found to be submitting false claims on a grand scale. Some were engaging in money laundering, embezzlement, forgery and extortion. Many simply padded their payrolls to justify fatter government checks."
Katherine J. O'Neill, a dietitian at B. J. Enterprises in Scottsdale, Ariz., a sponsor for 380 day care homes, said the investigators had focused too much on paperwork and bookkeeping errors.
"Children can be happy even if day care providers don't do all their paperwork on time," said O'Neill, whose company was criticized for such errors. "Kids are eating better because of this program. Instead of a bologna sandwich and Kool-Aid, they have a turkey sandwich, lettuce, fruit and milk for lunch."
The need for day care has grown in recent years as a booming economy has drawn more parents into the labor force and millions of women are trying to comply with work requirements under new federal and state welfare laws.
On the average, each sponsor supervises 150 day care homes, but some are responsible for more than 1,500. State licensing rules vary, but typically a home may have up to six children.