NYC comptroller audit raises red flags about school milk contrac

NYC comptroller audit raises red flags about school milk contract

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NEW YORK (MYFOXNY) -

New York City Comptroller Scott Stringer says for every extra penny charged for a small carton of public school milk, the Department of Education loses $1.5 million that could have been used to fund classroom supplies and school activities. That is why his office's audit of three milk companies possibly fixing prices on $134 million of milk contracts is so important.

A plant in Jamaica, Queens, is where all the milk for 850,000 New York City public school kids is processed. The milk gets trucked in then comes out from the same bins into different labeled cartons. The milk companies -- Elmhurst Dairy, Bartlett Dairy and the now bankrupt Beyer Farms -- won contracts to deliver milk to New York City public school kids from 2008 to 2013. But a comptroller's audit found that the three companies began as competitors for the school contracts but two months later became business partners.

Stringer's audit alleges Bartlet Dairy's percentage of milk delivered to NYC public schools kids went from the originally contracted 6 percent to almost 70 percent before even one milk carton was delivered. Stringer said the Department of Education ignored red flags that the milk contracts were tainted, possibly fixed, implying -- though not proving -- the possibility milk prices were set at higher rates.

We contacted the three milk companies and the Department of Education asking for comment. None returned our calls or e mails.

The Department of Education was quoted in the comptroller's audit saying it agreed it should be more careful but felt it had not made mistakes previously.

One reason the Department Of Education may not have been that concerned about milk prices is because the federal government pays for a large portion of the milk New York City public school kids drink.

Stringer said he is so concerned about the possibility of fixing school milk prices that his office has referred its audit to the U.S. Department of Justice's Antitrust Division.

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