Oroho: New fraud charges in school lunch program show state school aid formula still vulnerable

Senator Steven Oroho said that new criminal charges related to the fraudulent enrollment of ineligible students in the free and reduced-price school lunch program in Elizabeth show that the State’s school funding formula remains vulnerable to external manipulations.

“Year after year, we keep finding people who are willing to commit fraud to get their kids free or reduced-price lunches at school that they are ineligible to receive,” said Oroho. “These cases of fraud cost taxpayers much more than just a few dollars for a lunch. In fact, billions in State school aid allocations are based, in part, on a flawed school funding formula that uses enrollment in the lunch program as a key metric of poverty. As long as we tie State school aid to a number that can be manipulated at the district level, we’ll never have an equitable distribution of funding to the districts that deserve it.”

This is not the first time that students in Elizabeth have been found to be enrolled improperly in the free and reduced-price lunch program by parents who work for the district or their spouses.

A report by the State Comptroller in 2013 detailed widespread fraud in the program statewide, including in Elizabeth.

Enrollment in the free and reduced-price school lunch program triggers an “at risk” designation for enrolled students under the State’s school funding formula, resulting in the award of thousands of dollars of additional State education aid for each enrolled student to their school district.

Noting that link, the Comptroller’s report recommends that “breaking the connection between free lunch eligibility and state aid to school districts could both avoid awarding aid based on inaccurate information and address district incentives to enroll ineligible applicants in the free lunch program.”

“Since each student enrolled in the lunch program gets a school district thousands in extra aid that they otherwise wouldn’t get, districts have little incentive to strictly monitor applications for fraud,” said Oroho. “Meanwhile, that fraud results in less State aid being available for districts that follow the rules to provide property tax relief to their residents. The Comptroller told us to fix this six years ago. We shouldn’t delay action on this critical reform any longer.”

Oroho said that’s why a key component of the Senate Republican “Every Child Counts” school funding reform plan is a change in the way “at-risk” students are measured.

Rather than use the self-reported and easily manipulated free and reduced-price lunch program enrollments as the measure of a district’s “at risk” population, the Senate Republican plan proposes to use the Federal small area income and poverty estimate, which is currently used for Title I funding.

“Our ‘Every Child Counts’ plan provides for a more equitable distribution of school aid to every district while minimizing opportunities for places like Elizabeth to skew the formula improperly to their benefit,” Oroho added. “Until we enact these reasonable changes, we’ll never get a fair school funding formula.”