NY College Contractor Allegedly Cost University Approximately $159K
March 6, 2023
A food service contractor at Stony Brook University in New York is under investigation for allegations of fraud and misconduct, including fraudulent accounting and reporting, and using university funds to pay for employees at off-campus locations, adding up to at least $159,000 in fraudulent charges.
According to The Statesman, a campus student newspaper, catering contractor CulinArt was hired by the public university in 2017 to run an on-campus dining facility. The New York attorney general’s office has opened an investigation into their business practices at Stony Brook. The company has previously been sued for alleged fraud, and agreed to an $18 million settlement with New York public schools in 2012.
Multiple former employees have alleged wrongdoing by CulinArt at SBU, three of which resigned, and one was fired, the newspaper reported. One former employee claims the company violated its profit-sharing agreement, wherein CulinArt was obligated to share any profits above 6% with the university, but never did, and also admitted to accounting fraud in multiple capacities.
Another former employee claims that the company lied about payroll to take advantage of Stony Brook’s Covid-19 policy. When the campus shut down in 2020, the university offered to pay the wages of CulinArt’s on-campus employees. When CulinArt learned of this offer, CulinArt allegedly moved employees that didn’t work on-campus to the on-campus payroll to have their salaries compensated for free.
The Statesman reported that CulinArt charged Stony Brook $19,000 for an employee that never worked at Stony Brook, $2,500 for gas and milage for an unrelated commute, and overbilled by $18,000 on an invoice for Ramen noodles.
CulinArt also billed the university for health and welfare benefits of nonexistent employees, The Statesman reported. The company sent SBU a $460,000 invoice for 162 workers — while 42 of them, or 26%, had already been fired, former employees and internal documents show.
Twenty-six percent of $460,000 is $119,259, bringing the estimated fraudulent cost to $159,000.
Taxpayers should be concerned when public institutions funded by their tax dollars are taking financial losses because of lax oversight of their contractors.
Architect of the Capitol Fired Over Scandals, Made $187K
March 7, 2023
In a rare moment of bipartisanship in Washington, Congressional leaders from both parties strongly criticized the former Architect of the Capitol, Brett Blanton, for scandals that came to light in a recent Inspector General’s report. He earned an annual salary of $187,000 for years.
The Architect of the Capitol is tasked with maintaining the U.S. Capitol building and its adjacent House and Senate office buildings, including managing restoration efforts, helping with routine maintenance and repairs, and maintaining the grounds outside of the Capitol.
Blanton was appointed Architect of the Capitol in 2020, but his service was mired in scandals and abuses of public trust. The IG found that Blanton used three government, law enforcement-grade vehicles for personal uses and errands, falsely claimed he was an off duty police officer, and stood by while his wife advertised private tours of the Capitol when it was closed to the public due to the pandemic.
While his pay was never made public, a memo from the Government Accountability Office detailed that the highest salary level anyone in the office of Architect of the Capitol could make without special approval was Executive Schedule Level III, which according to executive salary tables, is $187,300 per year.
President Joe Biden acted swiftly to fire Blanton after Congressional leaders from both parties called for his resignation, and Congress is now beginning a search for a new Architect of the Capitol.
Public servants making lavish salaries should be worth their compensation and the authority entrusted to them, and not push the boundaries of their office for personal gain.
D.C. Overpays Millions for Public Housing
March 8, 2023
The Washington D.C. Housing Authority is responsible for running public housing programs in the nation’s capital, but a recent investigation by The Washington Post found the Authority routinely paid above market rates for housing, with millions of dollars of overpayments.
The DCHA distributes over 15,000 housing vouchers per year, but soaring D.C. rent prices have led to a waitlist of over 30,000 residents seeking vouchers. Overpayments mean that there is less money available, and that money could have helped more people afford housing.
The administration is run by Brenda Donald, who dismissed a memo from her predecessor warning about this issue, and sided with landlords who were pushing to prevent lower payments.
The investigation tells many stories of individuals living in run-down housing for exorbitant prices. In one case, the DCHA paid $2,467 per month for a dilapidated apartment in an area where the median one-bedroom apartment price was $1,613. In another, DCHA was paying $2,467 per month while a nearby building was charging $1,900 for similar rooms.
According to the Post, the problem is landlords who have recognized and exploited the system, knowing that DCHA automatically pays the asking price without shopping around or requiring residents to find more affordable options. The result is overpriced, shoddy housing that lacks the amenities and social services that residents need.
The DCHA needs to immediately review its high voucher prices and negotiation policies, and end the exploitation of the system by landlords.
Throwback Thursday: Judges Demanded Expensive Additions to Courthouse
March 9, 2023
In 1977, judges in Atlanta, Georgia demanded $7 million – over $21 million in 2023 dollars – for a slew of last-minute upgrades and additions solely for their own comfort and convenience.
Sen. William Proxmire, a Democrat from Wisconsin, awarded the U.S. District Court judges of Atlanta, Georgia his Golden Fleece Award for these selfish and expensive demands.
Originally, a new federal courthouse for Atlanta was approved at a price tag of $47 million, which should have been more than sufficient to meet the needs of the judges. Two years into the construction, however, judges began making demands.
First, the judges insisted on having six jury rooms, despite there only being four courtrooms in the building, along with an oversized chamber for rare “ceremonial occasions.” Additionally, they requested extra wood paneling behind the judges’ chairs, and wanted steel railings and chair bases to be swapped for a more luxurious brass.
The worst part of the redesign, however, pertained to the 22nd floor. After it was completed, the judges decided that they wanted to completely overhaul the Clerk of the Court’s filing system, upgrading it to a mechanized system that was so heavy, it required that the entire floor be redone, the supports be replaced, and the building exterior be updated.
All of these pesky requests to help spruce up the already expensive building resulted in 230 change orders, which were originally set to cost taxpayers $18 million, but negotiations added $7 million. As Proxmire humorously notes, “These judges ought to be sentenced to embarrassment for life without hope of parole for holding the American taxpayer in such contempt!”
Washington State Taxpayers Pay $330K/Month for Empty Hotel
March 10, 2023
The Red Lion Hotel in Renton, Washington, which once housed low-income people in need of housing, now sits empty and abandoned. Unfortunately, taxpayers are footing the bill to keep the lights on in this deserted hotel, costing about $330,000 per month, according to KIRO7 News.
The hotel was once a thriving place of business, with decent accommodations and a restaurant. When the pandemic hit and hotel business dried up, the owners sold it to King County, which the county intended to use as homeless shelter.
In November 2020, however, the hotel was burned to the ground, and the police charged a suspect with arson. The people living there had to be relocated, and the county moved them to another hotel in the area, at a cost of $28.6 million. The Red Lion Hotel remained gutted and unusable, and no plans were made to rebuild it.
Unfortunately, the county is continuing to pay $330,000 per month for the Red Lion, including for heat and electricity, despite shattered windows and boarded up sections in this unusable property. The county is reportedly negotiating to get out of the lease, but until an agreement is reached, taxpayers in King County will continue to pay rent for this property.
A reasonable person might expect that even if there are contractual obligations to continue leasing the property for a set period of time, the utilities would at least be turned off, and taxpayers wouldn’t have to pay for heat in a structure with shattered windows.
County governments are culprits of waste as much as any federal or state entity, and county officials need to remain vigilant to ensure their taxpayers are getting a good deal on their investments.
The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.