DHS to pay $1.1 million to Feds over food program error - WSMV News 4

DHS to pay $1.1 million to Feds over food program error

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NASHVILLE, TN (WSMV) -

It’s a million-dollar mistake, and taxpayers are footing the bill.

The Department of Human Services has been asked to pay $1.1 million to the federal government over “an erroneous approval” dealing with a federal program that feeds vulnerable children and adults.

Commissioner Danielle Barnes had been on the job for just two weeks when she received a letter from the U.S. Department of Agriculture, which provides funding for the Child and Adult Care Food Program and the Summer Food Service Program.

The memo requested DHS pay $1,159,751.72 within 30 days.

“We are going to recoup that money from the agency,” Barnes said in her first interview as commissioner.

The letter stated DHS had “erroneously” approved funds for Ivory Enterprise, LLC, in Memphis during fiscal years 2015 and 2016.

The approval was based on 501c(3) non-profit paperwork that had nothing to do with Ivory, which is considered a “for-profit” organization by the USDA.

A DHS spokeswoman said the department has cut ties with Ivory and already cut the check for the requested amount.

But the department continues to face criticism over how it handles the food program.

In a 2015 audit, the Tennessee comptroller’s office questioned $11.5 million tied to the program, which is monitored by DHS.

Some sponsors have been accused of spending thousands of dollars to benefit top executives and even falsifying meal reimbursement records.

Just last week, a state investigation revealed the nonprofit, All About Giving, may not have lived up to its name.

The report questioned expenses totaling more than $230,000 such as an Xbox, Google Live, and out-of-state and in-state hotel expenses.

Only $19 in charges could be supported by documentation, the comptroller’s investigation found.

CEO LaShane Hayes pleaded guilty to conspiracy and fraud in federal court.

“What they’re doing is using taxpayer dollars to buy things that have nothing to do with kids,” said John Dunn, a spokesman for the Tennessee Comptroller of the Treasury, in an interview last week.

“The biggest criticism [about this program] is that there’s not enough oversight,” said reporter Alanna Autler. “What are you going to do to fix that?”

“I think there have been some fail safes in place,” Barnes said. “We’re already making progress and the public should know that.”

DHS claims one of its biggest challenges is keeping track of paperwork.

Now sponsors are able to upload their documents online, which allows to staff to better monitor daily activities.

However, the department only is required to audit the program every three years.

Other improvements include background checks, which the department initiated last year.

In 2015, the state discovered that Jeannette Jives-Nealy had stolen more than $162,000 from the group she operated in Memphis, Kingdom Dominion Worldwide Ministries.

Jives-Nealy was supposed to be working with DHS to provide meals to children in economically-disadvantaged areas.

Public records show Jives-Nealy had been convicted for racketeering and theft in Florida. After she was released from prison, she started Kingdom Dominion.

A Shelby County grand jury eventually indicted Jives-Nealy for theft over $60,000.

Barnes could not say how many children were disadvantaged by bad actors in recent years, but acknowledged there is room for improvement.

“Any child who goes without food is too many,” Barnes said. “And we want to make sure we address that properly.”

Last week state Sen. Steve Dickerson, R-Nashville, said he is hopeful the recent hire of a new commissioner will improve oversight. He said if it doesn't, lawmakers will take action.

"To see people take that money and misuse it when we are trying to help children, it's distressing beyond words," Dickerson said.

Barnes said DHS plans to continue working closely with the comptroller's office in uncovering misspending. The new commissioner also said she is a fan of more transparency.

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