Corporate Swill Mills Ripping Off Schools

Last July, school cafeteria giant Sodexo agreed to pay $20 million to settle charges that it had overcharged 21 school districts and the State University of New York system. Sodexo had been receiving kickbacks from their suppliers and pocketing the profits, rather than passing the discounts on to the districts that hired them. Sodexo has a long and sordid history of ripping off school districts (see here) and an equally rotten history of ripping off and abusing their employees (see here and here).

The U.S. Department of Agriculture believes that Sodexo may not be the only food giant ripping off schools. They will begin an audit in August of school lunch providers throughout the U.S. Rep. Rosa L. DeLauro of Connecticut was quoted in Education Week saying, "I am concerned that these practices are prevalent in many more school districts around the country, potentially resulting in the misuse of tens of millions of dollars of taxpayer funds intended to provide schoolchildren with access to healthy school meals."

According to Education Week, the three largest providers of school food-management services are Sodexo, Aramark, and Chartwells. Sodexo works in more than 480 school districts across the country. USDA regulations require school districts to closely monitor contracts with outside food-service providers to prevent theft, something that is often not done well (or at all). In fact, the main reason why districts contract out food services to huge corporate swill mills is to save money, a benefit that is reduced proportionately to the amount of money spent on monitoring these relationships. Furthermore, district administrators generally have better [sic] things to do than to monitor how their districts’ resources are spent (like holding their teachers accountable for test scores and graduation rates).

The cafeteria suppliers are not just ripping off school districts. They have also been ripping off the feds. A 2002 audit found that five of eight companies were taking free commodity foods from the USDA that are supposed to go toward free and reduced lunch programs and charging school districts for it.