A federal program that provides food for low-income women and their children is so badly mismanaged in Georgia that state taxpayers could be slammed with a $20 million penalty.
Systemic problems in the Women, Infants and Children nutritional program, commonly know as WIC, have allowed stores to charge the government outrageous prices for basic commodities such as milk, according to a review of state and federal records by The Atlanta Journal-Constitution. The situation is so dire that federal officials want Georgia to stop approving new stores as WIC vendors until the state gets its act together.
“There have been huge problems with WIC,” concedes Brenda Fitzgerald, commissioner of the state Department of Public Health, which oversees the program.
Fitzgerald, who took control of the program about 18 months ago, told the AJC the department is making progress — hiring 20 new investigators to tackle fraud. As a result, she said, almost 100 stores have been shut down and ordered to pay around $17 million in restitution.
But she said it will take more time to turn the troubled $297 million program around. It’s a daunting task.
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Due in part to a declining birth rate, the number of Georgians receiving WIC has dropped in recent years. But costs have, nonetheless, continued to rise, fueled in part by exorbitant food costs.
Georgia’s WIC program has the highest per-participant food cost of any state in the nation, according to federal records, ranking above other states where the cost of living is higher. A federal review found that WIC was paying up to $7 for a gallon of milk in Georgia because the state isn’t doing enough to keep costs down at stores approved to accept WIC.
An outside consultant brought in by the state to assess WIC issued a scathing review. In a Jan. 28 report, North Highland Worldwide found low participation, high food costs, poor management and persistent fraud. In particular, some of the inefficiencies stem from “disjointed, antiquated and insufficient” computer systems, the consultant found.
WIC is funded with federal dollars from the U.S. Department of Agriculture but is administered by the state officials who oversee the particulars. It provides low-income pregnant women and new mothers with paper vouchers which they cash in for foods including milk and cheese, as well as infant formula.
WIC also provides instruction on breastfeeding and lessons on healthy eating. Some 1,450 stores are authorized to accept WIC in Georgia, ranging from large grocery stores like Kroger to small mom-and-pop shops. Unlike food stamps, which have a dollar value, WIC vouchers are redeemed for a particular food item.
Even though each voucher is numbered, the USDA found evidence that some vouchers were being copied and vendors were being reimbursed multiple times for each voucher. Fitzgerald said she has told the banks that process vendor claims to cross-check the voucher numbers and reject duplicates.
“It is one of our top priorities,” Fitzgerald said. “It was scary the amount of repeat vouchers we had.”
Records obtained by The Atlanta Journal-Constitution through an open records request show that the USDA officials have repeatedly told Georgia it needs to fix its WIC program. Yet the same problems have resurfaced year after year, cosing taxpayers millions of dollars.
For example, federal investigators found that the state failed to cash in $7 million in rebates on infant formula purchased with WIC. That money would have gone straight into taxpayer coffers to offset WIC costs.
Yet other problems seem to result from bureaucratic stubbornness at the federal level. A federal review blasted Georgia for housing its WIC data on an insecure computer system and ordered the state to get a new one. But Fitzgerald said that when she tried to bypass the lengthy federal procurement process to implement the change quickly she was rebuffed. The result: the badly-needed revamp could take another year, she said.
An inefficient computer network makes it hard – if not impossible – to track vendors, recipients and claims. Some owners of stores who were barred from accepting WIC opened new stores under different names.
The biggest problems come from small storefronts that traffic heavily in WIC vouchers. In the Northern District of Georgia, based in Atlanta, prosecutors handled three cases of WIC fraud worth hundreds of thousands of dollars.
Herbert Dix, owner of Spank’s Quick Stop in Griffin, is to go on trial later this year on 101 counts of fraud involving a total of $393,000. Shamsha Vasaya, owner of the Chevron Food Mart in Marietta, pleaded guilty last November to defrauding the Georgia WIC program of $557,421. She was sentenced to almost three years in prison. Lashunda Lovelace, owner of ABC KIDZ , is accused of defrauding the Georgia WIC program of almost $172,000.
Some frauds involve complicated rings that have broad reach around the state. On Feb. 8 three people connected to stores in Atlanta, Savannah, Decatur and Barnesville pleaded guilty to fraud. Their scheme involved giving cash to program recipients and then submitting inflated claims. One of the defendants, Petrina Barge, was sentenced to 51 months in federal prison and ordered to pay almost $6 million in restitution.
Ed Tarver, the U.S. attorney in Georgia’s Southern District, has charged 16 people with defrauding the WIC program. Thirteen of them, including Barge, have pleaded guilty since early last year. The remaining three are scheduled to go on trial in Savannah in June.
Fitzgerald and others say a new reshuffling of the state bureaucracy could also spell improvements for WIC.
State Sen. Renee Unterman, R-Buford, was behind the push to make the Department of Public Health a separate state agency, in part so programs like WIC would get the attention they need. Unterman said that and other improvements will help — over time.
“Is it fixed? Obviously not. It’s got a long way to go,” she said.
In the meantime, Georgia faces a $20 million penalty for failing to properly file forms and classify vendors, especially those considered at high-risk of being part of a fraud operation. Fitzgerald said she’s asked the USDA to rescind that action.
“We have made steady progress and achieved real gains in the fight against fraud,” Fitzgerald said in a letter to the USDA. “In 18 months since we became an independent department, 96 vendors (stores) have been terminated from the program and not one of those terminations has been overturned. My inspector general estimates that those 96 vendors would have billed over $55 million to date had our investigators not removed them from the vendor rolls.”