Group Justifies Excess Spending on Dietary Needs

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January 22, 2011; Source: Boston Globe | In an audit, the U.S. Justice Department has found that a well known education related nonprofit that holds some pretty significant contracts with the federal government misspent $286,689 in grant dollars on a program related to providing training and assistance to Native American youth. But the Education Development Center of Newton, Mass., says some of these questionable expenditures – especially those for food and drink – are really nothing more than a misunderstanding.

For instance, it says it had no choice but to spend $14,230, or $198 a day, for meals and drinks for 24 people who attended an event the group held in New Orleans. In addition to blaming the costs on a hotel food and beverage minimum, it justified the expenses saying "that in order to earn the trust of American Indian grantees and to engage them . . . it was crucial to provide participants with a reasonable breakfast.’’

The Boston Globe also reports the Center said the higher than customary meal expenses were necessary because Native Americans suffer from disproportionately high rates of diabetes and it wanted to be sure to serve them healthy food. That argument, however, didn't persuade government auditors. The inspector general's report says that expenditures for meals should not be "based upon race or ethnic background.’’

Other questionable expenses included $79,000 paid to a consultant “based on a one-page document describing services provided only in general terms.’’ Then there was the time an employee was reimbursed $991 for driving 1,708 miles between Minnesota and Oklahoma to attend a meeting. While the group argued it was cheaper to drive than fly and rent a car, it couldn't produce any documentation backing the claim.

Although the group says it is looking into these claims and is "dedicated to achieving the highest level of compliance in accordance with the terms of our grants and contracts," so far it's made no promises about whether that means it’s going to return any of the money.—Bruce Trachtenberg