Star Tribune
Food program oversight strengthened as state returns to pre-pandemic rules
Oversight of federal child nutrition programs is intensifying in Minnesota again as the state returns to pre-pandemic rules for feeding needy children.
While that is welcome news to many longtime nonprofit meal providers, several said they also worry the allegations of a $250 million food fraud scandal will spur new regulations that could make it more difficult for legitimate organizations to distribute food to low-income children.
“In general, it’s more difficult to bring on new sites now because of the extra oversight and due diligence … justifiably,” said Marcus Pope, president of Youthprise, a Minneapolis nonprofit that’s participated in nutrition programs since 2015. “We recognize that there will be additional scrutiny but the scrutiny shouldn’t be at the level it prevents people who have done the work well from being able to continue to do the work.”
Federal waivers loosened rules and oversight when COVID-19 first arrived. Regulators with the Minnesota Department of Education (MDE), which administers the federal program, reduced in-person visits to examine meal distribution, for instance. And meals could be sent home instead of requiring children to eat at a dining site. The more lax rules opened the door to the fraud scheme that federal prosecutors say is the largest pandemic-related fraud in the country.
Those waivers all ended by June 30, returning the state to more rigorous pre-pandemic rules.
Now, nonprofit leaders say, the programs will likely “self-correct” from the high numbers of meals reported during the pandemic. Setting aside the alleged fraud, legitimate organizations were serving more meals during the pandemic because schools were closed and families could pick up multiple meals at once, nonprofit leaders said.
The return to pre-pandemic rules is already slowing down approval of new sites and preventing some organizations from participating, providers said.
Officials from MDE declined an interview request for this article.
To try to dispense food quickly and safely amid the pandemic and school closures, the U.S. Department of Agriculture (USDA), which funds the programs, granted Minnesota more than 100 waivers. The waivers let for-profit restaurants participate and allowed distributors to give to-go or packaged meals that families could make at home instead of the pre-pandemic model of dishing out hot meals in dining sites. Some in-person monitoring requirements were also lifted, reducing visits by sponsoring agencies and MDE.
“It was just, in my opinion, a perfect storm,” said Christa DeBoer, Youthprise’s nutrition program director. “People potentially took advantage of that while the rest of us focused on serving the communities.”
Over three summer months, providers across Minnesota claimed to serve 37 million meals in 2021, up from 3.5 million meals the summer of 2019.
Ellie Lucas, CEO of Hunger Impact Partners, a statewide advocacy group, said COVID and the economy weren’t enough to drive up such explosive growth.
“The numbers indicated that [the state was] feeding more children than existed,” she said.
Federal prosecutors say that defendants associated with Feeding Our Future inflated their meal counts and submitted fraudulent invoices, making up names of children on attendance rosters. They say co-conspirators created shell companies to launder the money, traded kickbacks and bribes, and used the scheme to get rich, paying for goods such as Porsches and luxury homes.
Feeding Our Future leader Aimee Bock has denied any wrongdoing and some of the 49 people charged so far have also pleaded not guilty. Prosecutors have called it the first set of charges in a continuing investigation.
The return to pre-pandemic rules means hot meals need to be served to kids in congregate dining.
Longstanding Minneapolis nonprofit Loaves & Fishes decided to keep serving to-go meals this summer because clients preferred it, said executive director Cathy Maes, but that meant that when the waivers ended, the nonprofit wasn’t eligible for about $50,000 in federal money.
Most of Feeding Our Future’s former sites have also been sidelined. Prosecutors haven’t alleged that all of Feeding Our Future’s sites were fraudulently operated, saying in indictments that some sites did purchase and serve a small amount of food.
According to MDE, just 13 of Feeding Our Future’s more than 100 sites have signed on with a new sponsor so far, most through Edina-based Provider’s Choice.
Meal sites can either apply through MDE to be self-sponsored or contract with a sponsoring agency to oversee the complicated paperwork and reimbursements.
Fardowsa Ali worked with Feeding Our Future during the pandemic and applied to be her own sponsor, but she said MDE rejected her twice. She said she’s still feeding children at Hooyo Child Care Center in Minneapolis, but without any federal reimbursements she has to pay for the meals herself.
“They are not helping us,” she said of MDE. “We tried to apply and they rejected our application. We applied again and they gave us a bunch of really difficult things to do.”
MDE has referred former Feeding Our Future sites to Youthprise and other nonprofits and school districts.
Several of Feeding Our Future’s former sites have also contacted Youthprise looking for a new sponsor. But unlike Feeding Our Future, Pope said Youthprise provides food to sites so it can have more control over quality and compliance. Pope said once some inquiring sites learned that, they stopped the application process.
“You have a lot of sites that are just in limbo right now because of everything that’s going on,” he added. “There are some legit sites that are challenged by this. But there are some sites that didn’t do right. … We want to serve the community and we want to serve sites, but we don’t want to work with folks who haven’t done right by the system.”
Youthprise’s vendor, CKC Good Food, operates a sprawling 42,000-square-foot warehouse and office building in Eagan. Nancy Close started CKC more than three decades ago after her Afghan restaurant in St. Paul kept getting requests to provide meals to child care centers and schools. Now, she said her business prepares more than 17,000 meals a day for more than 150 schools and nonprofits.
“There’s no money in it. You make pennies on it,” Close said.
The USDA sets reimbursement rates and nutrition guidelines, for instance, stipulating how much protein, calories and sodium every meal must have.
Some nonprofits now fear the Feeding Our Future scandal will decrease trust in nonprofits and add regulations. Minnesota is one of seven states where the state agency doesn’t have administrative rulemaking authority. The Legislature would have to sign off on any policy changes.
Lucas of Hunger Impact Partners is pushing for changes, including limiting the number of sites under a newly formed sponsor and streamlining record-keeping. She said there’s a fine line between overregulation and rooting out fraud.
“The most important thing,” she said, “is that the people operating the federal programs are operating with integrity so the meals get to the children who deserve them.”
Staff writer Jeffrey Meitrodt contributed to this report.
As a photojournalism professor, R. Smith Schuneman mixed high expectations with a warm manner to launch the careers of a wide spectrum of photographers.
His students at the University of Minnesota, many of whom regarded Schuneman as a pivotal influence in their lives, went on to shoot for National Geographic, Look, Life and numerous other magazines and newspapers, as well as for corporate clients, photography studios and a wide array of film and video productions.
Then Schuneman, who went by his nickname “Smitty” and never by his given name of Raymond, embarked on a second career with the creation of Media Loft , an events and communications agency. He eventually sold the company to his employees before retiring with his wife, Pat, to a lakeside home in Okoboji, Iowa.
“Smitty could be utterly ruthless, uncompromising or unyielding in his goal of making photojournalists out of us,” wrote Richard Olsenius, a former student of Schuneman’s, in a memorial book prepared by friends. “But it was underlied with a deep-rooted concern for what is right and moral. He demanded honesty from our work.”
He died Nov. 24 at age 88 of heart problems.
Schuneman was born in 1936 in Spirit Lake, Iowa. His parents Raymond “Art” and Olive “Bunch” Schuneman ran the local newspaper in Milford, Iowa, and it was there that Schuneman began publishing photos while still in school.
He also ran a side business covering weddings, events and “whatever pictures were needed around the small town,” his wife said.
She remembers seeing Schuneman for the first time when her band director arranged for her to take drum lessons from him. She was 15 and he was 16. She later worked for him at his photo service, processing the film.
Lawmakers this session will talk to parents, teachers and others about whether they are identifying too many students as needing special education services and if some kids could use less-intensive support, she said. There’s a “mismatch” where some kids get more services than they need, said GOP Rep. Ron Kresha, who will be Youakim’s co-chair in the evenly divided House.
“There’s always going to be this tendency to [say], ‘Hey, let’s get as much services to this kid as we can because we want them to succeed.’ I think that’s a noble quest, but what are we taking away from other students who may have needs that we may not be addressing?” Kresha said, noting that some services may have to be rolled back in light of the potential deficit.
Nationally, special education officials are wary of President-elect Donald Trump’s proposal to eliminate the Department of Education, said Phyllis Wolfram, executive director of the national Council of Administrators of Special Education. Minnesota isn’t alone in its rising costs and demand for services, she said, adding that providers are grappling with challenging behaviors and mental health needs, including for younger children.
“We’re still seeing needs and challenges for students that are coming from a post-COVID era, and they don’t just diminish in one or two years,” Wolfram said.
Meanwhile, there is a shortage of special education staff and schools must rely on more expensive contract workers, said Niceta Thomas, president of Minnesota Administrators for Special Education. She said more families are moving to Minnesota with children who require special education and students’ needs are more severe.
“No matter what ability they come from, all children deserve a free and appropriate education,” Thomas said. “We need to make sure we’re meeting that.”
Willy Boulay and Mike Hudson have a grand vision for building affordable apartments for people with below-median incomes that are as nice as market-rate properties.
Their first buildings, one in Minneapolis that opened in May and another about to open in St. Paul, live up to their plans. Both have fitness centers, balconies on most units, roof decks, solar arrays, EV chargers, community rooms, even indoor playgrounds they tested themselves.
“The slide will support guys over 30,” Boulay said as he and Hudson took me through Canvas, their 161-unit project in northeast Minneapolis. It gets its name from all the original paintings purchased from neighborhood artists to fill halls and other common areas.
The seven-story building cost $71 million and is open to renters of all ages who make 60% of average market income, a level sometimes known as workforce housing. Hennepin County and the city of Minneapolis provided subsidies in the form of tax-exempt bonds and tax credits that will discount rents for 40 years. It’s a typical form of financing for affordable housing to help cover the difference between it and market-rate homes.
As of last week, Canvas had just two vacancies. Well, plus one big one on the ground floor.
To get the project approved, their firm, Broadway Street Development, had to comply with the desires of City Council members for buildings in a so-called “production” district, designated to create employment-focused developments.
As a result, the ground floor was built with 18-foot ceilings and about half of it, around 23,000 square feet, was set aside for commercial use. Perhaps a microbrewery with a taproom will lease it, or a commercial production studio, or a small industrial business that isn’t too disruptive to the hundreds of residents above.
Boulay and Hudson are confident they will get the space filled. They noted, however, that projects coming after them haven’t required as much space set aside. Which leads me to remind readers that, when my now-retired colleague Neal St. Anthony wrote about Canvas as construction was getting underway two years ago, he focused on the years of work Boulay, Hudson and partner Sterling Black of LS Black Constructors had already put in to get it financed.
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