LAUSD TO DOUBLE SPENDING ON MEALS DESPITE CRIMINAL PROBE AS FOOD SERVICES DIRECTOR RESIGNS

By Thomas Himes, Los Angeles Daily News  | http://bit.ly/1MI41Ce

8/3/15, 12:31 PM PDT  ::  Despite an ongoing criminal investigation, the Los Angeles Unified School District plans to nearly double the meals it buys under a multimillion-dollar contract.

In the upcoming school year, Los Angeles Unified will increase the number of suppers it purchases from about 70,000 per day to 140,000.

Those meals will be bought through a contract that was criticized by the district’s inspector general in an audit released last month.

According to the audit, the district’s director of food services, David Binkle, agreed to buy the meal kits at a 23 percent markup.

LAUSD announced Monday that Binkle had resigned as of Friday.

<< Until Friday, David Binkle was director of food services for the Los Angeles Unified School District. He resigned on that day, the LAUSD said Monday. (File photo by Pablo Martinez Monsivais/Associated Press)

The district could have purchased the suppers directly from Five Star Gourmet Foods for $1.20 per kit, but instead added a middleman, Gold Star Foods, according to the audit. The same kits bought from Five Star through Gold Star cost the district $1.48 per meal.

“It is not clear why it was necessary for the district to receive the Supper Kits through Goldstar at additional cost instead of receiving it directly from Five Star,” auditors noted.

LAUSD spent $12.1 million on suppers in 2013, according to the audit. By expanding the program this year, LAUSD expects to collect an additional $16.6 million in federal dollars, according to the district’s website.

Dealings between Binkle and Five Star Gourmet Foods are being probed for criminal wrongdoing by investigators in the inspector general’s office. Binkle joined LAUSD as deputy director of Food Services in 2008, and was promoted to the top position in February 2012. He was placed on paid leave Dec. 4. He continued to collect $152,000 in salary until Friday’s resignation.

According to the report, Five Star expended $8,831.64 for district officials to travel. The money was spent at Binkle’s request, according to the audit.

“Asking a contractor to pay for airfare and hotel accommodations is clearly in violation of the Employee Code of Ethics and the Contractor Code of Conduct,” according to the audit.

Meanwhile, Gold Star Foods agreed to disburse public funds for Binkle to stay at the Hotel Palomar in Beverly Hills during a gathering of LAUSD food workers, according to the audit.

The contracting problems can be traced back to a 2011 decision that was supposed to defray administrative costs by allowing food services to forgo standard contracting practices, according to the audit.

Chief Procurement Officer George Silva said the additional money paid for suppers is a transportation cost. Gold Star delivers the Five Star meals to campuses across the district.

Additionally, the price LAUSD pays for the meals and delivery has decreased to $1.45 per supper, including a 14 cent transportation fee. Silva could not explain why the delivery fee significantly decreased, while the price of the supper kits increased.

The arrangement, he said, is a good deal for the district.

“I’s a very cost-effective deal there,” Silva said.

Gold Star, Silva said, is already delivering other food products to district campuses, so adding the suppers to those trucks made sense.

But the district also purchases other food products directly from Five Star, without a middleman. Those meals are delivered to campuses by district trucks.

But because the suppers include perishable items, food services Co-Director Timikel Sharpe said the district can’t afford to have the meals sit at a distribution center while they wait to be delivered by district trucks.

“We need to get those to the schools as quickly as possible, not another location where they may sit for a day,” Sharpe said.

When the district doubles the supper program this year, it will not request bids from competing companies. Even though contractors are able to lower their unit price when items are bought in higher quantities, Silva said the district could not have anticipated that it would double its order this year.

Laura Benavidez, food services co-director, said the program still hasn’t reached all of the students in after-school programs.

“When we originally started the supper program, we didn’t know what type of participation to expect,” Benavidez said. “This is normal when starting a new program. We have seen a gradual increase in participation over the past two years.”

Representatives of Five Star and Gold Star referred requests for comment to LAUSD, citing contract provisions that prohibit public statements on such matters.

Los Angeles Unified’s $354-million food program serves more than 130 million meals a year.