Nonprofit Support Group Caught Up in Scandal at Los Angeles Unified

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July 15, 2015; Los Angeles Daily News

A prestigious nonprofit support group affiliated with the nation’s second-largest school district, with a high-profile staff and blue-ribbon board of directors, found itself in the middle of a scandal over waste in Los Angeles Unified School District’s food program.

An audit of L.A. Unified’s food services program, released by the district’s inspector general, reveals “swanky hotel stays, cozy relationships with contractors and millions of dollars in waste,” according to a report in the Los Angeles Daily News.

The audit singles out the food services director, who has been collecting an annual salary of $152,000 while on paid leave for more than five months. David Binkle established a reputation as a promoter of healthy eating, appearing at the White House with first lady Michelle Obama.

According to the audit, the $341 million-a-year program had problems that can be traced back to the district’s decision to let food services forgo standard contracting practices in 2011, on the belief that administrative costs would be lowered. That gave Binkle almost complete control over millions of dollars in contracts, and the paper reports that he used that power to give preference to contractors who showered him with perks.

Those perks were not reported on forms mandated by state law. In addition, Binkle failed to disclose his food consulting company, which made more than $950,000 per year, according to the audit.

Money was spent from the district’s marketing fund to pay key executives at the nonprofit L.A. Fund for Public Education $117,500 to promote the district’s controversial breakfast program, which it features prominently on its website. The Fund is a blue-chip support group for L.A. Unified, whose board includes the mayor, the publisher of the Los Angeles Times and a number of entertainment industry bigwigs. The group says on its website that it “builds innovative partnerships to create solutions that will improve the educational, health and wellness outcomes for students in Los Angeles.”

Binkle denied authorizing the payment, claiming that the nonprofit was authorized to spend tax dollars without his permission. The Fund denied that, and said it had no direct involvement with the program because the individual executives worked directly for the district.

The audit also revealed that the district overpaid for meals provided by one favored contractor, which paid for airfare and hotel costs for district employees to attend a food conference, a violation of the district’s ethics policy.

The Daily News reports that LAUSD Superintendent Ramon Cortines says he has taken steps to prevent future ethical breaches and mismanagement. The audit also says that the food services department’s operating deficit more than tripled between 2010 and 2013, even though the district served 900,000 fewer meals, meaning that the cost of food increased 41 percent.

Some of that is due to buying the healthier food Binkle and the L.A. Fund promoted, but the inspector general said that the bulk of the increase was due to lax contracting practices, ordering too much food, duplicating orders and carrying excessive inventory. At the same time, the paper reports that about one-fifth of food served was wasted, even though food offered free by the USDA wasn’t ordered on time.—Larry Kaplan