Comptroller audit slams DOE milk contracts

February 28, 2014 Heather Chin
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The city Department of Education (DOE) faces an investigation by the U.S. Department of Justice following an audit by city Comptroller Scott Stringer that claimed the DOE “needlessly put taxpayers at risk” by having inadequate “review [of] the financial capacity of the vendors that were awarded milk contracts” and inadequate “procedures for detecting the warning signs of possible collusion” between bidders.

According to the audit, “the three winning bidders began as competitors, [but] became business partners within two months of the contracts being awarded.  Beyer [Farms] and Elmhurst [Dairy], which had won the lion’s share of the distribution bids in August and September 2008, subcontracted the majority of that work in October 2008 to their former competitor, Bartlett [Dairy].”

Beyer also eventually went bankrupt in 2012—following years of debt and that was disregarded by the DOE.

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