B-176994, AUG 14, 1974

B-176994, AUG 14, 1974

CLAIM BY UNITED BRONX PARENTS ASSOCIATION (SPONSOR) FOR REIMBURSEMENT OF AMOUNT IN ADDITION TO AMOUNTS PREVIOUSLY PAID FOR MEALS PROVIDED BY ARA (CATERER) UNDER 1971 SPECIAL FOOD SERVICE PROGRAM FOR CHILDREN (SUMMER OPERATIONS) PURSUANT TO SECTION 13 OF NATIONAL SCHOOL LUNCH ACT, 42 U.S.C. 1761, MAY NOT BE ALLOWED, SINCE PAYMENT WOULD NOT BE JUSTIFIED WHERE ONLY PERTINENT ADDITIONAL EVIDENCE AS TO NUMBER OF MEALS PROVIDED IS AFFIDAVIT EXECUTED MORE THAN 2 YEARS AFTERWARD BY FORMER GENERAL MANAGER IN CHARGE OF ARA'S PRODUCTION FACILITY IN WHICH HE ESTIMATED THAT 4,000 OR 5,000 DOZEN ADDITIONAL SANDWICH ROLLS HAD BEEN PROVIDED FOR PROGRAM.

CLAIM OF UNITED BRONX PARENTS ASSOCIATION:

THIS DECISION TO THE SECRETARY OF AGRICULTURE IS IN RESPONSE TO THE REQUEST DATED JANUARY 23, 1974, BY THE ASSISTANT SECRETARY, DEPARTMENT OF AGRICULTURE FOR OUR ADVICE ON A CLAIM FOR ADDITIONAL REIMBURSEMENT SUBMITTED BY THE UNITED BRONX PARENTS ASSOCIATION FOR MEALS DELIVERED BY ARA SERVICES, INC., A CATERER, UNDER THE 1971 SPECIAL SUMMER FOOD SERVICE PROGRAM IN NEW YORK CITY.

IN OUR DECISION B-176994, DECEMBER 5, 1972, WE DID NOT OBJECT TO THE PAYMENT OF THAT PORTION OF THE CLAIM FOR ADDITIONAL REIMBURSEMENT WHICH WAS REASONABLY SUBSTANTIATED IN THE OPINION OF THE OFFICE OF INSPECTOR GENERAL, OF THE DEPARTMENT OF AGRICULTURE IN THE AMOUNT OF $521,427. THE UNITED BRONX PARENTS ASSOCIATION AGAIN SEEKS REIMBURSEMENT OF THE BALANCE OF ITS CLAIM TO THE EXTENT OF $108,282.72. IT IS STATED IN THE ASSISTANT SECRETARY'S LETTER OF JANUARY 23, 1974, THAT ARA HAS SUBMITTED A COMPROMISE PROPOSAL TO SEATTLE FOR HALF OF THE REMAINING REIMBURSEMENT THEY FEEL IS DUE THEM FOR THE SUMMER OF 1971. THE AMOUNT NOW CLAIMED REPRESENTS THAT COMPROMISE FIGURE.

AS RELATED IN OUR PRIOR DECISION, THE SPECIAL FOOD SERVICE PROGRAM FOR CHILDREN IS AUTHORIZED BY SECTION 13 OF THE NATIONAL SCHOOL LUNCH ACT, 42 U.S.C. 1761. IT PROVIDES THAT THE SECRETARY OF AGRICULTURE IS TO FORMULATE AND CARRY OUT A PROGRAM TO ASSIST STATES IN NONPROFIT FOOD PROGRAMS FOR CHILDREN IN SERVICE INSTITUTIONS AS DEFINED IN THAT SECTION.

IN 1971, THE FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE, ENTERED INTO AN AGREEMENT WITH THE STATE OF NEW YORK FOR THE ADMINISTRATION OF THE PROGRAM IN THAT STATE. THE NEW YORK STATE DEPARTMENT OF EDUCATION CONTRACTED WITH THE UNITED BRONX PARENTS ASSOCIATION, AS A SPONSOR, TO OPERATE THE 1971 SUMMER PROGRAM IN THE NEW YORK CITY METROPOLITAN AREA. BY CONTRACT WITH THE UNITED BRONX PARENTS ASSOCIATION, ARA SERVICES, INC., A CATERER, AGREED TO PREPARE AND DELIVER LUNCHES TO THE SERVING SITES AT 52 CENTS PER LUNCH.

DURING THE COURSE OF ITS PERFORMANCE OF THIS CONTRACT, ARA CLAIMED THAT IT PREPARED, ASSEMBLED AND DELIVERED A UNITED BRONX PARENTS ASSOCIATION 6,026,628 COMPLETE MEALS FOR A TOTAL OF $3,133,846.56. (SEE P. 3, RECLAIM, 1971 UNITED BRONX PARENTS, UNDATED.) THE OFFICE OF THE INSPECTOR GENERAL, DEPARTMENT OF AGRICULTURE, CONDUCTED AN ADULT (AUDIT REPORT NO. 60108-12-C) WHICH RECOMMENDED THAT THE SPONSOR'S CLAIM FOR FEDERAL REIMBURSEMENT BE LIMITED TO $2,420, 408 (4,656,457 LUNCHES TIMES 52 CENTS, LESS $950 FOR LUNCHES SERVED TO UNAUTHORIZED ADULTS). THIS RECOMMENDATION WAS BASED ON THE EVIDENCE OF THE NUMBER OF LUNCHES SUBSTANTIATED BY DELIVERY RECEIPTS AND RESULTED IN THE ISSUANCE OF A CHECK IN THE RECOMMENDED AMOUNT.

SUBSEQUENT TO THE ISSUANCE OF THIS CHECK, THE CATERER SUBMITTED SECONDARY EVIDENCE TO SHOW THAT ENOUGH FOOD COMPONENTS WERE PURCHASED TO ASSEMBLE ADDITIONAL LUNCHES WHICH COULD NOT OTHERWISE BE VERIFIED BY RECEIPTS OF LUNCHES SIGNED BY SITE SUPERVISORS OR SUPPORTING ROUTE SHEETS. A SECOND AUDIT (AUDIT REPORT NO. 60109-7-C) WAS CONDUCTED BY THE INSPECTOR GENERAL'S OFFICE WHICH CONCLUDED THAT THERE WAS SUBSTANTIVE EVIDENCE TO SUPPORT A MAXIMUM OF 5,679,868 LUNCHES FOR AN ADDITIONAL $521,427 AFTER A DEDUCTION OF $10,746 FOR INSUFFICIENT MARGARINE. ON THE BASIS OF THIS REPORT, THE DEPARTMENT OF AGRICULTURE REQUESTED THE CONCURRENCE OF THIS OFFICE OF THE PAYMENT OF $521,427 ON THIS CLAIM.

IN OUR DECISION OF DECEMBER 5, 1972, WE INDICATED WE WOULD NOT OBJECT TO THE PAYMENT OF THIS RECOMMENDED SUM OF $521,427, BUT WE DID NOT FIND THE EVIDENCE SUPPORTING PROPOSED REIMBURSEMENT AS CONCLUSIVE. NEVERTHELESS, WE TOOK NOTE OF THE EXTENUATING CIRCUMSTANCES, AND THE INFORMATION DEVELOPED BY THE OFFICE OF THE INSPECTOR-GENERAL AND OTHERS IN FINDING A REASONABLE BASIS FOR PRESUMING THAT ADDITIONAL LUNCHES WERE PREPARED AND DELIVERED BY ARA SERVICES, INC. WE CAUTIONED IN THAT DECISION, HOWEVER, THAT THIS FORM OF EVIDENCE GENERALLY SHOULD NOT BE RELIED UPON IN DETERMINING THE AMOUNTS PROPERLY PAYABLE.

IN THE PRESENT REQUEST, THE ASSISTANT SECRETARY OF AGRICULTURE ASKS ADVICE AS TO THE PAYMENT OF AN ADDITIONAL AMOUNT TO THE UNITED BRONX PARENTS ASSOCIATION BASED ON FURTHER EVIDENCE SUBMITTED BY THE ASSOCIATION AND FOR OTHER CONSIDERATIONS. SUCH CONSIDERATIONS INCLUDE THE UNUSUAL AND CUMULATIVE PROBLEMS IN LAUNCHING THE PROGRAM UNDER WHICH ARA HAD TO OPERATE, THE RECORDS OF ARA FOR LUNCHEON INGREDIENTS WHICH INDICATE MORE LUNCHES COULD HAVE BEEN PREPARED THAN CREDIT HAS BEEN GIVEN, THE EXTRA EFFORT USED TO ASSURE LUNCHES WERE DELIVERED AS ORDERED, AND THE IMPROVED MANAGEMENT AND RECORD-KEEPING OF ARA IN THE PERFORMANCE OF THE SAME TYPE OF WORK DURING THE FOLLOWING SUMMER OF 1972.

WITH REGARD TO THE RECORDS FOR THE LUNCHES PREPARED BY ARA, THE LAST AUDIT COULD VERIFY ONLY 418,564 LUNCHES BASED ON THE LEAST PURCHASED INGREDIENT - SANDWICH ROLLS. IN THE "RECLAIM" SUBMITTED BY THE UNITED BRONX PARENTS ASSOCIATION WHICH ACCOMPANIED THE LETTER OF THE ASSISTANT SECRETARY OF AGRICULTURE, ARA SUBMITTED AN AFFIDAVIT OF A FORMER GENERAL MANAGER (EXHIBIT K) INDICATING THAT MORE SANDWICH ROLLS WERE DELIVERED TO ARA THAN PREVIOUSLY COULD BE ESTABLISHED. IN THE AFFIDAVIT OF MR. BERNARD SONKIN, HE ESTIMATED FROM MEMORY SOME 2 YEARS AFTER THE OCCURRENCE THAT BETWEEN 4,000 AND 5,000 DOZEN FREE SANDWICH ROLLS WERE DELIVERED BY THE HERMAN'S STAR BAKERIES, ASIDE FROM THEIR REGULAR DELIVERIES, IN COMPENSATION FOR THE BAKERY NOT BEING ABLE TO MEET ARA'S SPECIFICATION OF FULLY SPLIT ROLLS. THIS STATEMENT REGARDING THE DELIVERIES OF SANDWICH ROLLS IS NOT OTHERWISE CORROBORATED IN THE FILE.

IN EXHIBIT J OF THE RECLAIM, THE NUMBER OF LUNCHES BASED ON THE INGREDIENTS OF MEAT AND CHEESE PLUS SANDWICH ROLLS IS RECOMPUTED ON THE BASIS OF THE ADDITIONAL SANDWICH ROLLS DELIVERED WHICH CANNOT BE VERIFIED. IT IS THE POSITION OF ARA THAT EVEN THOUGH IT CANNOT OTHERWISE ACCOUNT FOR THE OTHER SANDWICH ROLLS ASIDE FROM THE AFFIDAVIT OF MR. SONKIN, THEY MUST HAVE BEEN SUPPLIED AND USED IN LUNCHES. IT THEREFORE PRESENTS A CLAIM FOR $108,282.72 WHICH IS FOR ONE-HALF OF THE REMAINING UNCOMPENSATED LUNCHES IT CLAIMS TO HAVE PREPARED INCLUDING THOSE WITH SANDWICH ROLLS WHICH CANNOT OTHERWISE BE DOCUMENTED.

THIS OFFICE CANNOT CONCUR WITH THE PROPOSED ADDITIONAL PAYMENT TO THE UNITED BRONX PARENTS ASSOCIATION BASED ON THE FACTS PRESENTED. AS STATED IN OUR DECISION OF DECEMBER 5, 1972, EVEN THOUGH THE EVIDENCE WAS NOT CONCLUSIVE, THERE WAS A REASONABLE BASIS FOR PRESUMING THAT THE ADDITIONAL LUNCHES FOR WHICH PAYMENT WAS RECOMMENDED AT THAT TIME WERE PRODUCED AND DELIVERED TO THE SITES. THE ADDITIONAL EVIDENCE NOW PRESENTED DOES NOT PROVIDE A SIMILAR REASONABLE BASIS FOR THE PAYMENT OF ANY ADDITIONAL AMOUNT. SPECIFICALLY THE RECOLLECTION OF THE AFFIANT OF THE RECEIPT OF FOUR TO FIVE THOUSAND DOZEN SANDWICH ROLLS MORE THAN 2 YEARS BEFORE THE EXECUTION OF THE AFFIDAVIT DOES NOT, IN OUR OPINION, PROVIDE A REASONABLE BASIS FOR THE APPROVAL OF THE PAYMENT OF AN AMOUNT TO THE BRONX PARENTS ASSOCIATION IN ADDITION TO THAT ALREADY PAID.

ACCORDINGLY THIS OFFICE DOES NOT FIND SUFFICIENT LEGAL JUSTIFICATION FOR PAYMENT OF THE ADDITIONAL AMOUNT CLAIMED BY THE UNITED BRONX PARENTS ASSOCIATION.