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Company to reimburse HFM BOCES

December 19, 2013
By ARTHUR CLEVELAND , The Leader Herald

JOHNSTOWN - HFM BOCES will receive more than $15,000 from US Foods after the company reached a $330,000 settlement for overcharging dozens of institutions across the state.

According to a news release from state Attorney General Eric Schneiderman, US Foods failed to pass on cost savings it received to more than 67 institutions, such as schools, homes for the elderly and disabled, the New York State Museum and the state Senate.

According to the news release, Hamilton-Fulton-Montgomery Board of Cooperative Educational Services will be reimbursed $15,353 from US Foods.

HFM BOCES Superintendent Patrick Michel was unavailable for comment.

The Attorney General's Taxpayer Protection Bureau's investigation into US Foods was part of an ongoing, industry-wide probe into whether food service companies are overcharging government customers, the release said.

According to the release, the investigation into the Illinois-based distributor found that, since April 2009, US Foods has failed to disclose and pass through to New York institutions cost-saving discounts it received for volume and growth programs. US Foods receives these discounts from manufacturers when it meets certain sales goals.

Under the terms of its contract with the state Office of General Services, the company is required to disclose and pass on these discounts to state and local institutions that make purchases through the contract, the release said.

"Financial transparency and accountability are requirements when doing business with the state of New York and my office is here to ensure that contractors are playing by the rules," Schneiderman said in the release. "Rules that require the full disclosure of discounts are meant to pass savings on to local and state government agencies and institutions that benefit from these contracts."

Of the total settlement, $200,000 is being divided among the state and local organizations, while the Attorney General receives $130,000 to cover the cost of the investigation.

The reimbursements will range from a high of $51,535 going to the William Koehler Memorial Senior Center in Putnam County to a low of $205 going to the New York State Museum, and Utica's Mohawk Valley Psychiatric Center.



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