NEWARK, N.J. – U.S. Attorney Paul J. Fishman and Special Agent-in-Charge William G. Squires of U.S. Department of Agriculture (USDA), Office of Inspector General announced today that the Elizabeth Public School District has agreed to credit its School Lunch Program $272,810 and pay $49,500 to the U.S. Department of Justice. The agreement settles allegations that the school district improperly used federal and state funds to provide meals and catering services for school board meetings and other special functions.

The USDA’s National School Lunch Program provides reimbursement payments to ensure low-cost or free meals (breakfast, lunch and snacks) for certain qualifying students. The USDA administers the program, while oversight, compliance and general administration is done by the N.J. Department of Education, Office of Fiscal Accountability and Compliance (OFAC) and the state Department of Agriculture (NJDA), Division of Food and Nutrition. The Elizabeth Public School District receives federal and state funds designated specifically for the lunch program. Those funds must be kept separate and independent from other funds and used solely for approved lunch program purposes. The district may generate revenue for its lunch program by selling snacks and meals and providing catering services, but all money used for and earned from these services must be used solely for the lunch program.

According to the settlement agreement: Between July 1, 2008, and June 30, 2014, the district failed to collect, reimburse, or apply $182,243 to its lunch program for catering services provided to its Board of Directors and $90,567 for catering services provided to various schools, principals, and administrators within the district for other special functions. The United States contends the district’s lunch program was deprived of the use of $272,810.

In addition to repaying the lunch program and paying penalties, the district will participate in training and be subject to three years of monitoring by OFAC and NJDA.

The claims settled by this agreement are allegations only; there have been no admissions of liability.