Congresswoman requests investigation into contracted-out food services after Sodexho settles with New York state

Sodexho reached a $20 million settlement with the Attorney General of the state of New York in July for overcharging 21 school districts and the state university for food services. "This company cut sweetheart deals with suppliers and then denied taxpayer-supported schools the benefits," Attorney General Cuomo said in a statement.

Now, Congresswoman Rosa DeLaura has asked the United States Department of Agriculture (USDA) to begin an investigation by the Officer of the Inspector General and to alert state education and agriculture agencies to the $20 million settlement. Congresswoman DeLaura states:

Attorney General Cuomo's investigation revealed that it is common practice within the food service industry for providers like Sodexo to leverage their size and market dominance to obtain rebates from vendors that supply food products, equipment and supplies without passing those savings onto local school districts - despite federal and state laws and local contract language that requires them to do so. 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 school children with access to healthy school meals.

Congresswoman DeLaura requests a review of contract school meal programs in other states to help identify and recover any federal funds that have been misappropriated through the illegal procurement practices revealed in the New York investigation.

Sounds like a good idea. Now, what about Canada?

The Attorney General's statement notes that the investigation "revealed that it is common practice within the food service industry for service providers like Sodexo to leverage their size and market dominance to obtain rebates from vendors that supply food products, equipment and supplies." Moreover, the Attorney General "continues to examine the rebating practices of other large, multi-national corporate providers of food service and facilities management to taxpayer-funded organizations".

For more background see here, or for the SEIU story, see here.

dallan@cupe.ca

Comments

More spending on new hospitals and new beds? Nope

Hospital funding: There is something off about the provincial government's Budget claims on hospital capital funding (funding to build and renovate hospital beds and facilities). For what it is worth (which is not that much, given the long time frame the government cites), the province claims it will increase hospital capital spending over the next 10 years from $11 billion to $20 billion – or on average to about $2 billion per year. But, this is just a notional increase from the previous announcement of future hospital capital spending. Moreover, even if we did take this as a serious promise and not just a wisp of smoke, the government's own reports shows they have actually funded hospital infrastructure about $3 billion a year over the 2011/12-2015/16 period. So this “increase” is really a decrease from past actual spending. Even last year's (2016-17) hospital capital funding increase was reported in this Budget at $2.3 billion - i.e. about ...

Ford government fails to respond to 72% increase in COVID inpatient days, deepening the capacity crisis

COVID infections continue to drive up hospital costs and inpatient hospitalizations in Ontario. For the most recent fiscal year (April 1, 2022- March 31, 2023) hospital stays related to COVID cost $1.221 billion, according to new CIHI data. This is about 4% of total hospital spending, creating a very significant new cost pressure beyond the usual pressures of population growth, aging, inflation, and rising utilization. Costs for COVID related hospitalizations increased 22.2% in Ontario in 2022/23 from the previous fiscal year, rising from $999 million to $1.221 billion. That rise is particularly notable as the OMICRON spike of late 2021 and early 2022 had passed by the the 2022/23 fiscal year. The $222 million increase in COVID hospitalization costs came in the same year as the Ford government cut special COVID funding and, in fact, cut total hospital funding by $156 million. In total, there were 60,653 COVID hospitalizations...

The hospital crisis: No capacity, no plan, no end

While Canada has achieved universal public healthcare coverage, that does not mean conservative forces have given up trying to erode that coverage and expand corporate care where it does not currently exist. The battle has become particularly intense in Ontario under the Ford Progressive Conservative government, which is implementing serious cuts to the level of care and moving to bring in for-profit mini-hospitals. Inadequate Staﬃng. Less and less of hospital spending is on staff. Employee compensation as a share of hospital expenditures has consistently shrunk in Ontario. This is not some immutable law of hospital development. It is in stark contrast with the rest of Canada, where compensation has become a larger share and now accounts for 67.1%. Hospitals in provinces other than Ontario now have 18 percent more staﬀ per capita than hospitals in Ontario. Overall, if Ontario had the same staﬃng capacity as the other provinces and territories, there would be another...

Defend Public Healthcare

Search This Blog