Free Lunch "Fraud" Menu: Red Herring

Apparently, the greatest threat to the fiscal well-being of New Jersey is children who might be getting their school lunches for free [all emphases in this post mine]:

More than 100 people – including 83 public employees – gave false information about income on applications for free lunches submitted to school districts.  

That is the finding of a Comptroller’s investigation announced Wednesday involving 15 school districts over a three-year period that uncovered widespread fraud.

Comptroller Matthew Boxer’s office reported that it has referred 109 names to the Division of Criminal Justice for prosecution: the 83 public workers and 26 others who are spouses or other household members of the public workers. The total in unreported income of those cases was over $13 million [What a poorly constructed sentence; that is not the amount of fraud, but the income misreported - JJ].

Leave it to PolitckerNJ to breathlessly report that 101 families getting free school lunches is "widespread abuse" when over 380,000 kids in New Jersey receive free and reduced price lunch, and that's only about 80 percent of those who are eligible. But let's do a little more math and put the whole thing into perspective:

According to NJ Department of Education data, there were 503,486.5 (don't ask me which half...) children eligible for free or reduced price lunch in 2012-13; that's puts the statewide eligibility rate at 31%. The Comptroller looked at 15 school districts, searching for fraud:

• Bayonne Board Of Education 
• Egg Harbor Township School District 
• Essex County Vocational Technical Schools 
• Linden City Board Of Education 
• Long Branch Public Schools 
• Millville Board Of Education 
• The Newark Public Schools 
• Paterson Public Schools 
• Pemberton Township Schools 
• Pennsauken Township Board Of Education 
• Pleasantville Public School District 
• Toms River Regional School District 
• Trenton Public Schools 
• Union City School District 
• Winslow Township School District 

These districts, however, are unusually large, and represent over 11% of New Jersey's total student population:

Moreover, these districts have unusually high rates of eligibility for free and reduced price lunch; while they make up on 11% of the total student population, they make up nearly twice that of that FRPL population:

Some of you are probably saying: "Wait, that's circular: if there's fraud in reporting FRPL eligibility, you can't trust these statistics!" Except, as Bruce Baker has recently shown, there is a very strong correlation between FRPL statistics and other measures of poverty:

That "rsq=.89" figure is geek-speak for: "89 percent of the variation between districts in FRPL rates is explained by census poverty figures." In other words: the FRPL data and poverty data from the census pretty much reports the same relative rates of poverty for school districts in New Jersey.

Let's go back to those 101 incidents of alleged fraud the Comptroller found. The total student population for the 15 districts investigated is 154,268, which is a "fraud rate"* of 0.07%. These districts, again, have large number of students eligible for FRPL: 110,424.5. That's a "fraud rate," based on FRPL eligibility, of 0.09%.

Extrapolate that out to the entire state and in the worst case scenario, there are less than 1000 cases of fraud we would project the Comptroller could find within a three-year period. Remember, there are more than 1.3 million students in New Jersey's schools, and we are talking about a "fraud rate" of less than one-tenth of one percent. Folks, you can't even see a "fraud rate" that small:

Look, people shouldn't commit any fraud, and I'm all for prosecuting those who engage in it. But how about a little perspective? As far as scandals go, this is tiny... unless there's an ulterior motive to this investigation.

Turn to page 18 of the Comptroller's report:

According to information obtained from the state Department of Education, school districts receive additional state aid based upon the number of children in their districts deemed NSLP eligible. This additional aid is awarded pursuant to the School Funding Reform Act, NJSA 18A:7F-43 et seq., based on the districts' low-income population, which is determined by NSLP eligibility data. While school districts thus have a financial incentive to maximize the number of students participating in NSLP, aggressive efforts to encourage successful applications can result in additional instances of fraud. The large number of cases where benefits have been reduced or eliminated through the verification process indicates that this issue is more than merely theoretical. These concerns are particularly relevant when the when the recruitment efforts are not couples with cautionary warnings and guidance from the districts about avoiding fraud and complying with program requirements. Information we obtained during the course of our investigation provided cause for concern in this regard. For example, several interviewees advised OSC that either no contact person was provided for questions concerning the NSLP application or they were referred to district employees who did not appear to have specific knowledge of program requirements. Breaking the connection between NSLP eligibility and state aid to school districts could both avoid awarding aid based on inaccurate information and address the incentive to enroll ineligible applicants in the free lunch program.

And so we see what this jihad against free school lunches is really about: undermining school funding equity. And to do that, Comptroller Matthew Boxer takes an enormous leap: since there is evidence of extremely limited fraud in the school lunch program, free/reduced price lunch statistics must be inaccurate measures of district poverty.

Sorry, but that's absolutely unwarranted. Just because Boxer found a tiny fraction of cases that were fraudulent, it doesn't automatically follow that free lunch statistics hugely overstate relative poverty rates in school districts.

But that hasn't stopped New Jersey's largest newspaper, the Star-Ledger, from once again carrying Chris Christie's milk crate:   

This is just the tip of a much bigger scandal, fraud on a massive scale.

Cheating the school lunch program costs taxpayers far more than a subsidized sloppy Joe. To understand why, consider its impact on school funding.

School districts get additional state dollars based on the number of children enrolled in this federal free and reduced-price lunch program, which, sadly, acts as an incentive to sign up as many students as possible.

New Jersey is among the best states in the country in spending for low-income students. The state’s 31 poorest districts, formerly called Abbotts, on average spend about $3,000 more per pupil than the rest of the state.

To estimate how many needy students there are in a district, the state uses lunch data: It provides an extra $4,700 to $5,700 for each child enrolled in the program, which works out to hundreds of millions in state aid.

So there’s a big incentive for districts to lie, or to look the other way at fraud. The vast majority of free lunch applications are never reviewed for accuracy.

Some experts argue the real problem is underreporting — families that qualify for free lunch but don’t take advantage of it. But even they agree that while this program is vital for feeding the poorest children, it’s an unreliable measurement for state school funding.

Oh, please - that is just foolish beyond belief. Who are these "experts" ready to trash the data collection system for state aid on the basis of a tiny amount of fraud found in the Comptroller's report?  If they were really "experts," they wouldn't even consider such a ridiculous idea.

And leave it to Tom Moran and the S-L Editorial Board to screw up even the most basic facts about school lunch "fraud":

According to the state comptroller, Matthew Boxer, as many as 37 percent of participants are fraudulently enrolled. When he released his latest report last week documenting widespread abuse in the program, Gov. Chris Christie acted stunned — as if a burglar had been caught breaking into his house.

Wrong. That "37 percent" is nowhere to be found in Boxer's report; it's actually in the 2011 report of the State Auditor, Stephen Eells. Worse, the "37 percent" figure way overstates the potential "fraud" in the program; I know this because the Star-Ledger itself said so when they took tea-partyin' State Senator Mike Doherty to task for misreading the auditor's report (of course, even that report in the S-L overstated the level of "fraud").

Hey, I've got a crazy idea: how about, just this one time, everybody be honest? This whole absurd exercise in hyperbole is really about coming up with an excuse to defund SFRA once and for all, just so Chris Christie can get his hands on the state aid money that is required, by law, to go to the poorest school districts.

Wingnuts like Doherty and the S-L's resident conservative ideologue, Paul Mulshine, have been playing this ugly game for years; they harp on this non-issue over and over again to convince themselves that money doesn't matter in education, and poor children don't need extra school funding. The facts don't deter them; they, like Chris Christie, are always on the lookout for an excuse to stick it to poor people. Crying "Fraud!" is a perfect excuse for them: they can pretend that they care about kids in poverty while rolling back policies that have served New Jersey's children well for decades. 

Maybe framing it as an issue of "fraud" helps them sleep at night. Too bad the New Jersey media seems all too happy to help them fluff their pillows.

* Got to be careful here: the Comptroller's report cites 101 instances of parents committing fraud, but those parents may have had more than one child. If you want to double or triple my numbers here to account for that, go right ahead - but the percentages are still tiny. The Comptroller's report in no way signals "massive fraud" in school lunch eligibility.

But I can't wait for all you wingnuts and corporate shills out there to try to convince me otherwise...