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Aramark Food Contract with Kentucky under Scrutiny
by David M. Reutter
An October 2010 report issued by Kentucky’s Auditor of Public Accounts concerning the $12 million food service contract between Aramark Correctional Services (Aramark) and the Kentucky Department of Corrections (KDOC) found a lack of oversight, overpayments and a failure to provide the service required by the contract.
Aramark was awarded the contract in FY 2005. It was to provide three meals a day that contained an average of 2800 calories, costing KDOC $2.34 per prisoner per day. The contract’s adjustments set that cost at $2.63 per day in FY 2010.
The audit was set following a House Judiciary Committee finding that food service was a contributor to the August 2009 riot at Northpoint Training Center. Reports on the riot and legislative hearing testimony “suggested problems related to poor sanitation and pest control in the institutions’ kitchens, dining halls, and/or food storage areas, poor food quality, inadequate food quantity, and reports of large scale food-related illness outbreaks.
To conduct the audit, Aramark was requested to provide cost data, including the direct cost of services by prison. Aramark said it would only provide it “on the condition that the information not appear in the audit report or any other public release, and that it be protected from disclosure under terms and safeguards acceptable to Aramark.” The auditor refused that condition, contending that under the contracts provision Aramark is required to provide all information “pertinent to the contract.” The matter was submitted to KDOC and the Finance and Administration cabinet to determine if the failure to submit the records constituted breach of contract.
The contract provides for a four percent annual increase in cost to KDOC, with a four percent increase in FY 2010. The auditor had concern with these adjustments. It noted that changes to the Master Menu had “a qualitative impact on the selection in one year reviewed.” More than 40 changes were made that year.
Of those, the auditor noted that whole chicken quarters were removed from the entrée and replaced with a meatball sub entrée. Aramark said that returning chicken quarters to the menu would constitute a “meal enhancement.” It said it had offered that enhancement once a month and a cheeseburger on a bun twice a month at an additional cost of $.06 per prisoner per day, or about $250,000 per year.
That the chicken quarters were considered an enhancement greatly concerned the auditor, especially since there was no “corresponding price decrease for the removal of the chicken quarters from the menu.” KDOC justified that change because the three percent increase in cost that year, but the auditor determined Aramark was still given the increase, providing it “two cost adjustments in the same year.”
It was unveiled by the auditor that Aramark overbilled KDOC for 3,091 prisoners in August 2007, 3,359 prisoners in August 2008, and 2,730 prisoners in August 2009 above actual prisoner count; totaling overbilling for as much as $84,000 to $102,000 per year. It also found that in one month, Aramark charged KDOC for 890 staff meals at a rate of $.876 each when only 527 staff members had signed the meal log.
It was also found that the Master Menu was not consistently followed as required by the contract, and that menu substitutions were common occurrences. Testing revealed that 142 meals out of the 534 meals indicated a food shortage and/or substitution.
The “auditors identified instances in which substitutions were made with foods that were not in the same category, but documentation of [K]DOC’s preapproval of these items was not provided,” states the report. “These types of substitutions draw into question whether Aramark is violating the provisions of its contract to adhere to the Master Menu, and certain substitution choices also raise questions whether it is meeting the minimum daily caloric intake identified in the contract for the individuals impacted.”
Review of meal production records indicate that “certain items on the menu were watered down or that items were routinely missing or cut out of recipes.” In most instances, inventory records showed less product was used than the pull sheets indicated was needed for the recipes. “The auditors noted numerous instances in which spices were left out of recipes, and even more serious instances in which flour, beef base, and bulk food ingredients called for in the recipe were dramatically reduced or omitted.” Then, the trays served to prisoners had “inconsistent portions” on them.
It was also noted there was unacceptable control of leftovers, which could be “especially risky” for food safety. In that area, it was further found that the temperature of served foods was not verified to stay in a safe range to prevent “possible food illness outbreak.”
Between May 2009 and August 2009, Aramark received almost 115,000 pounds of prisoner grown produce at a cost of $531. The auditor found that fair market value of that produce was $148,000. While the contract permits Aramark to obtain such produce, it “appears to intend for any financial benefits of the program to be used to assist [K]DOC, not to further enhance profits of the vendor.”
Finally, the report notes that reported line stoppages range from 5-43 minutes; most stoppages, which are caused by food shortages, are not reported.
Governor Steve Beshear and Justice and Public Safety Secretary J. Michael Brown stood by the Aramark contract. “The bottom line is, the audit verifies that the contract is a good investment for taxpayers,” said Beshear. “It allows for us to provide more than adequate nutrition for prisoners’ needs and continues to save taxpayers money.”
The auditor disagreed. “There’s a pattern of non-compliance that’s raised some questions of whether or not taxpayers are getting their money’s worth,” said the State Auditor, Crit Wallen. “We can privatize services, but we can’t contract our responsibility. Our recommendations will ensure the vendor is held accountable.”
Sources: “Examination of the Kentucky Department of Corrections’ Food Services Contract with Aramark Correctional Services,” Kentucky Auditor of Public Accounts (October 2010); Herald-Leader
An October 2010 report issued by Kentucky’s Auditor of Public Accounts concerning the $12 million food service contract between Aramark Correctional Services (Aramark) and the Kentucky Department of Corrections (KDOC) found a lack of oversight, overpayments and a failure to provide the service required by the contract.
Aramark was awarded the contract in FY 2005. It was to provide three meals a day that contained an average of 2800 calories, costing KDOC $2.34 per prisoner per day. The contract’s adjustments set that cost at $2.63 per day in FY 2010.
The audit was set following a House Judiciary Committee finding that food service was a contributor to the August 2009 riot at Northpoint Training Center. Reports on the riot and legislative hearing testimony “suggested problems related to poor sanitation and pest control in the institutions’ kitchens, dining halls, and/or food storage areas, poor food quality, inadequate food quantity, and reports of large scale food-related illness outbreaks.
To conduct the audit, Aramark was requested to provide cost data, including the direct cost of services by prison. Aramark said it would only provide it “on the condition that the information not appear in the audit report or any other public release, and that it be protected from disclosure under terms and safeguards acceptable to Aramark.” The auditor refused that condition, contending that under the contracts provision Aramark is required to provide all information “pertinent to the contract.” The matter was submitted to KDOC and the Finance and Administration cabinet to determine if the failure to submit the records constituted breach of contract.
The contract provides for a four percent annual increase in cost to KDOC, with a four percent increase in FY 2010. The auditor had concern with these adjustments. It noted that changes to the Master Menu had “a qualitative impact on the selection in one year reviewed.” More than 40 changes were made that year.
Of those, the auditor noted that whole chicken quarters were removed from the entrée and replaced with a meatball sub entrée. Aramark said that returning chicken quarters to the menu would constitute a “meal enhancement.” It said it had offered that enhancement once a month and a cheeseburger on a bun twice a month at an additional cost of $.06 per prisoner per day, or about $250,000 per year.
That the chicken quarters were considered an enhancement greatly concerned the auditor, especially since there was no “corresponding price decrease for the removal of the chicken quarters from the menu.” KDOC justified that change because the three percent increase in cost that year, but the auditor determined Aramark was still given the increase, providing it “two cost adjustments in the same year.”
It was unveiled by the auditor that Aramark overbilled KDOC for 3,091 prisoners in August 2007, 3,359 prisoners in August 2008, and 2,730 prisoners in August 2009 above actual prisoner count; totaling overbilling for as much as $84,000 to $102,000 per year. It also found that in one month, Aramark charged KDOC for 890 staff meals at a rate of $.876 each when only 527 staff members had signed the meal log.
It was also found that the Master Menu was not consistently followed as required by the contract, and that menu substitutions were common occurrences. Testing revealed that 142 meals out of the 534 meals indicated a food shortage and/or substitution.
The “auditors identified instances in which substitutions were made with foods that were not in the same category, but documentation of [K]DOC’s preapproval of these items was not provided,” states the report. “These types of substitutions draw into question whether Aramark is violating the provisions of its contract to adhere to the Master Menu, and certain substitution choices also raise questions whether it is meeting the minimum daily caloric intake identified in the contract for the individuals impacted.”
Review of meal production records indicate that “certain items on the menu were watered down or that items were routinely missing or cut out of recipes.” In most instances, inventory records showed less product was used than the pull sheets indicated was needed for the recipes. “The auditors noted numerous instances in which spices were left out of recipes, and even more serious instances in which flour, beef base, and bulk food ingredients called for in the recipe were dramatically reduced or omitted.” Then, the trays served to prisoners had “inconsistent portions” on them.
It was also noted there was unacceptable control of leftovers, which could be “especially risky” for food safety. In that area, it was further found that the temperature of served foods was not verified to stay in a safe range to prevent “possible food illness outbreak.”
Between May 2009 and August 2009, Aramark received almost 115,000 pounds of prisoner grown produce at a cost of $531. The auditor found that fair market value of that produce was $148,000. While the contract permits Aramark to obtain such produce, it “appears to intend for any financial benefits of the program to be used to assist [K]DOC, not to further enhance profits of the vendor.”
Finally, the report notes that reported line stoppages range from 5-43 minutes; most stoppages, which are caused by food shortages, are not reported.
Governor Steve Beshear and Justice and Public Safety Secretary J. Michael Brown stood by the Aramark contract. “The bottom line is, the audit verifies that the contract is a good investment for taxpayers,” said Beshear. “It allows for us to provide more than adequate nutrition for prisoners’ needs and continues to save taxpayers money.”
The auditor disagreed. “There’s a pattern of non-compliance that’s raised some questions of whether or not taxpayers are getting their money’s worth,” said the State Auditor, Crit Wallen. “We can privatize services, but we can’t contract our responsibility. Our recommendations will ensure the vendor is held accountable.”
Sources: “Examination of the Kentucky Department of Corrections’ Food Services Contract with Aramark Correctional Services,” Kentucky Auditor of Public Accounts (October 2010); Herald-Leader
