MUSD FOOD PROVIDER'S BILLING IN QUESTION - The Explorer: Import

MUSD FOOD PROVIDER'S BILLING IN QUESTION

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Posted: Wednesday, December 12, 2001 12:00 am | Updated: 7:46 am, Thu Mar 24, 2011.

A private sector food service corporation that was allowed virtually unrestricted access to Marana Unified School District financial accounts billed taxpayers for more than a half million dollars in computers, trucks, renovations and other expenses since the beginning of the 1999-2000 fiscal year.

Aramark, a global corporation that has been contracted to operate 14 cafeterias in MUSD's schools, submitted invoices over two years totaling $502,444 to the district's maintenance and technology departments after it depleted its own food service budget of more than $2.1 million, according to documents obtained from the school district.

The invoices, which included a 12-inch plastic bowl that cost $62 and a $27,000 payment for a 1995 Isuzu refrigerated truck, were paid by the district, and MUSD officials said they have no intention of trying to recoup any of the expenditures.

"I want to stress that Aramark did nothing illegal or unethical with these invoices," said MUSD Assistant Superintendent Scott Mundell, who oversees the district's finance department. "I try to liken it to an analogy that they wanted a shiny red sports car, and we've decided they have to drive a cheap car now."

Bill Helmintoller, Aramark's manager of MUSD's food service, did not return repeated phone calls seeking comment.

Under terms of the contract between MUSD and Aramark, all of the equipment purchased remains in the possession of the district if and when Aramark leaves the district.

But Mundell said there was "virtually no oversight" from the district to insure the equipment was actually needed.

MUSD's attorney John Richardson was in the process of renegotiating the contract with Aramark last week.

"There will be safeguards in place in the contract to regulate the expenses," Richardson said. "It will be up to MUSD to decide if they want to continue their relationship with Aramark."

Aramark has already been informed that they will no longer be allowed to simply bill district accounts outside the allocated food service budget, Mundell said.

"They now have to get written and verbal permission from me before purchases are made. Not just written permission, but written and verbal permission," Mundell said, adding that Aramark is the only district vendor who has been allowed to bill MUSD accounts outside the vendor's specific budget.

Exactly who in the district originated the practice of allowing Aramark to submit invoices to the maintenance and technology department remains unclear. Who, if anyone, was responsible for approving the payments, is also uncertain.

Mundell said he discovered the problem last April, shortly after he took over the finance department from retiring assistant superintendent Herman "Dutch" VanderMaten.

"The first indication of a problem came when the head of the technology department called me and said 'can you do something about these invoices, these guys are killing my budget.' At that point I began to look into it and discovered the invoices to the departments and saw we had a problem," Mundell said.

Mundell said VanderMaten originated the practice of allowing Aramark to bill the district as a way to avoid raising the costs of students' meals.

VanderMaten said Aramark was allowed to bill the district while he was in charge of MUSD's finance department, but that he approved the invoices and did not find any irregularities.

"Yes, we didn't want to see cafeteria prices go up that would impact students and their parents, but there was oversight. The invoices would be approved by my office before they were paid," VanderMaten said.

He said he also disagreed with Mundell's finding that the district's accounts were hit for over a half a million dollars.

"No, that can't be right. There was no way that it went up that high when I was there," VanderMaten said.

According to an expenditure analysis prepared for the MUSD governing board by Mundell, Aramark billed the district's account $312,161 in 1999-2000, and $116,656 in 2000-2201. The purchases from the district's account ranged from the used Isuzu truck to kitchen equipment.

Over the same two year period, Aramark billed MUSD's technology department $27,154 for new computer-assisted cash registers, printers, keyboards, software and other equipment. The bills include a cash register that costs $12,822, and several key pads that cost $218 each.

Aramark billed MUSD's maintenance department $37,953 in 1999-2000, and $8,517 in 2000-2001.

Bob Thomas, MUSD assistant superintendent for maintenance, said the money was spent on repairs and renovations of the district's cafeterias.

"That's come to an end. They have to get approval now," Thomas said.

Aramark, which took over the district's food service contract three years ago, launched a new campaign to revamp it's service last year.

On May 22, 2000, Aramark unveiled it's new corporate mascot, Spike.

"They charged us about $7,000 for that one. I don't think they even need to be doing publicity for their services," Mundell said.

Aramark spent $9,000 on advertising and promotions last year, according to the district's food service budget.

According to Aramark's page on the MUSD Web site, Helmintoller describes Spike as "a furry blue character with a winning smile" intended to teach children the value of good nutrition.

"Spike is pretty cool. Not only will the younger students love him, but the older students will think he's groovy. Spike will be coming to our schools in February and I encourage all of you to attend this live show. The day I saw Spike, I thought I was going to laugh my head off," Helmintoller wrote on the Web page.

Another sore point for district officials is that Aramark has been running a deficit each year, despite contractual requirements to show a profit or break even.

In its contract for 1999-2000, Aramark agreed to show at least a $50,000 surplus for the year. Instead, the provider lost about $31,000.

The contract was changed to require Aramark to at least break even. So far this year, Aramark has run a $2,285 deficit, according to documents obtained from the district.

The over runs were only in the food service budget, and were in addition to the more than $500,000 the company charged district accounts over the two year period.

Richardson said the old contracts required Aramark to surrender half of its management fee if it ran a deficit.

The management fee was set at $36,093 this year, according to the budget.

A provision in the old contract allowed Aramark to make up the half of its lost management fee before paying any future profits to MUSD, Richardson said.

"We took umbrage to that, saying our concern is that it be a shared responsibility, and we don't want to enter into a new relationship with you, or think of having a long term relationship with you if we think we're never going to make a profit or break even. Why wouldn't we just go out for bid and get some contract that doesn't have that provision?" Richardson said.

Going out to bid is a distinct possibility, Mundell said.

"We will try and renegotiate the contract with Aramark, but I also believe the governing board will be examining it's options sometime soon," Mundell said.

"There's not a whole lot of other food providers out there as options," said Governing Board President Bonnie Demorotski. "And the provider we had before Aramark was even worse."

MUSD food service facts

According to public financial filings, Aramark had more than $7 billion in sales in 2000, has 139,000 employees, and is the third largest food provider in the world.

At Marana Unified School District, elementary school students pay $1.50 for a full cost lunch, and middle and high school students pay $1.60. The costs were raised this year by a dime.

According to detailed invoices obtained from MUSD, some of the items Aramark purchased and billed district accounts for over the last two years include:

$635 for a two-bulb heat rack with an adjustable stand.

$690 for a 20-pan capacity bun rack.

$63.15 for an adapter for a sign bracket.

$93.06 for a seven-inch by 11-inch acrylic sign.

$53.40 for a heavy weight cooking fork.

$62.27 for a 12-inch round plastic pebble bowl.

$36.33 for another 12-inch round plastic pebble bowl.

© 2014 The Explorer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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