Chicago schools audit reports widespread fraud with free lunch program

The Chicago Public School District is faced with “persistent and widespread fraud” by highly-paid employees taking advantage of food stamp and state-subsidized health care benefits by underreporting their income, according to a 2022 annual report from the district’s Office of Inspector General.

The report provides multiple instances where CPS staff fraudulently underreported their income and received SNAP benefits while making their children eligible for free-and-reduced lunches at their schools. The examples cited in the report occurred from 2016 through 2020.

The school district stated that it has participated in a federal program for more than a decade that provides free lunches to all enrolled students, regardless of their family's income.

The Inspector General report states that the eligibility of students for free-and-reduced lunches is important because it is "also the determination of other important funding streams for CPS."

The report gave an example of one elementary school principal’s ex-husband, who reported only his “significantly smaller salary” on their children’s CPS Family Income Information Forms, despite not living in the residence with either the principal or the children.

“The principal told the OIG that her ex-husband completed the forms because he made less money, demonstrating that she was aware of and even condoned her omission from the forms and failed to correct them before they were submitted,” the report stated.

This fraud improperly qualified their children for the free or reduced-price meals program.

In another example, a former elementary school teacher fraudulently obtained state welfare benefits for her children, falsely claiming her employment with CPS had ended. This made her children eligible for the meals.

While the Office of the Inspector General detailed these and other specific instances of FRM fraud, it also raised concerns about schools potentially receiving more money both from its district and the federal government based on inflated free or reduced-price meal program numbers.

According to the Illinois State Board of Education’s Report Card, 77% of all CPS students are eligible for free or reduced-price meals.

The report provides information on many different investigations and allegations of fraud reported to the Board of Education in fiscal year 2022, which ran from July 1, 2021, to June 30, 2022.

“In Fiscal Year 2022, the OIG received 1,825 complaints alleging misconduct, waste, fraud and financial mismanagement at Chicago Public Schools,” the report details.

The OIG opened investigations into 725 of those 1,825 cases, which is 39.7%.

Chicago Public Schools has released a statement about the report.

It read: "Chicago Public Schools (CPS) greatly values our partnership with the Office of the Inspector General (OIG) and we support the work to investigate all issues of misconduct among our 40,000 team members. As a District, we take seriously our responsibility to serve our families with integrity and to address individuals who breach CPS policies and the public’s trust and hold them accountable. CPS will continue to ensure our District policies and procedures support the highest ethical standards to ensure our valued team members act in the best interest of our students."