A Western New York child and family service organization will receive more than $100,000 as part of an $18 million settlement between New York State and a food management company.
Compass Group USA improperly overcharged more than 39 schools and school districts in the state, according to Attorney General Eric T. Schneiderman. The company received discounts from food vendors it worked with but did not pass on those savings to the schools as required by state law.
Gateway Longview will receive $147,152 as its part of the settlement.
“Compass improperly profited by overcharging New York’s taxpayers and shortchanging our schools,” Schneiderman said. “There are no excuses for this kind of misconduct.”
An investigation by the Taxpayer Protection Bureau of the attorney general’s office found that Compass, which handles food-related procurement and staffs and supplies culinary facilities through its subsidiary Chartwells, failed to disclose or pass through to many of its educational customers cost-saving rebates paid to the company by vendors and suppliers.
Nearly $3 million in overcharges is being returned to schools and school districts, and the remaining $15 million will be returned to state coffers.
The settlement also requires greater transparency in the contracting process by establishing safeguards to ensure the company’s customers are informed about rebates.