The Ohio Department of Rehabilitation and Correction (ODRC) overpaid food service giant Aramark $57,193 for food provided to nonexistent prisoners, investigators found.
The overpayment was uncovered by the state Office of the Inspector General (OIG). According to a June 15, 2017 report, the OIG began investigating Aramark after learning of a dispute between the company and the Michigan Department of Corrections over billing discrepancies in excess of $3 million. [See: PLN, Jan. 2018, p.46].
Aramark has held the contract to provide meals to Ohio state prisoners for over four years. The state pays the company around $60 million annually to feed more than 50,000 prisoners in 31 ODRC facilities. Meals provided by Aramark cost the state around $1.31 each.
In January 2017, the union representing ODRC employees submitted its third bid to take over prison food services upon completion of Aramark’s contract the following June. The price per meal quoted by the Ohio Civil Service Employees Association (OCSEA) was $1.226 – low enough to save the state $4.4 million per year.
After rejecting OCSEA’s initial bid in 2013, state prison officials fined Aramark $235,000 for several contract violations – including problems with cleanliness in its kitchens. Company spokeswoman Karen Cutler said those issues stemmed from older kitchen equipment inherited by Aramark and that the problems – including maggots in food serving areas – had been fully addressed. [See: PLN, Dec. 2015, p.1].
However, the ODRC has also banned 135 Aramark employees for having improper relationships with prisoners. In spite of these problems, the state awarded a second contract to the company in 2015, again beating out OCSEA’s food service bid. Since then another 33 Aramark workers have been banned from Ohio prisons due to misconduct.
According to the OIG report, state prison officials gave Aramark a bed count that included 13 nonexistent prisoners at the London Correctional Institution. The fake names had been included as part of a test of the ODRC’s database. Using the incorrect count for its billing, the company was overpaid $57,193 between September 2013 and November 2016. Aramark credited the entire amount to the state’s bill in March 2017.
The OIG report also highlighted $80,343 in improper payments related to the use of paper products while kitchen renovations took place. That overpayment included $350 in tips to pizza delivery drivers. While the ODRC’s Office of Acquisition and Contract Compliance told investigators that the payments were part of a verbal agreement, the contract between Aramark and the state specifically disallowed such oral agreements.
The investigation also revealed that “prescribed ODRC forms used to support credits billed by Aramark were not completed in their entirety, information on the prescribed forms was not verified for accuracy, and approvals for billing of the additional expenses billed by Aramark to ODRC was not reflected on the documentation submitted.”
ODRC spokeswoman JoEllen Smith said the agency had “rectified the issues noted in the report and will continue to address other areas of concern.” In June 2017, the state renewed Aramark’s contract for another two-year term – declining once again to accept OCSEA’s lower bid. The ODRC said an independent review had concluded that the union bid failed to fully reflect “the true cost of procuring and delivering food services.”
Not only did the ODRC have higher confidence in Aramark’s calculations – despite the incorrect billing, improper payments and high number of Aramark employees that had been banned from state prisons – it was willing to give the company another chance.
“Aramark acts quickly and makes the appropriate decisions when there is misconduct,” said ODRC spokesman Grant Doepel. “Additionally, training has been added to address inappropriate staff behavior.”
Yet a lawsuit was filed in June 2017 by a woman serving a six-year sentence on a drug-related conviction, who said she was sexually assaulted by her supervisor in the kitchen of a Cleveland prison where she worked while incarcerated. Jonathan Velez, 28, an Aramark employee at the time, pleaded guilty to gross sexual imposition; he was sentenced in February 2017 to eight months in prison and must now register as a sex offender.
“When you hire substandard individuals, you get substandard results,” commented OCSEA President Christopher Mabe.
He also cited a report by Policy Matters Ohio that showed Aramark ranked 21st out of the state’s top 50 businesses with respect to the number of employees on public assistance, with 1,587 Aramark workers receiving food stamps or enrolled in the Supplemental Nutrition Assistance Program as of May 2016.
“All government contracts should demand a living wage,” said Mabe. “And our food service plan did just that, plus more. At least, Ohio should require its contractors pay enough that workers can support a family without needing food aid. Union contractual rights on top of that would give Ohio workers the boost they need, not to mention taxpayers.”
Michigan and Ohio are not the only states that have had problems with Aramark’s prison food services. According to the OIG report, “Further research … revealed additional news articles highlighting issues with Aramark’s overbilling of meals served at various other correctional institutions throughout the United States.”
Sources: www.watchdog.ohio.gov, www.dispatch.com, Dayton Daily News, www.oscea.org
Originally published in Prison Legal News on January 31, 2018.