Former Sodexo Employees Under Investigation for Fraud Against Lubbock ISD; Garza Issues Statement

Two former employees of a major Lubbock ISD contractor are under investigation for fraudulent purchases.

The two under investigation worked for Sodexo, which is the company responsible for maintenance of the facilities and grounds within Lubbock ISD, including custodial services.

Lubbock ISD Superintendent Dr. Karen Garza (pictured) earlier today released a statement concerning the investigation currently being conducted by Lubbock County District Attorney Matt Powell:

Our relationship with Sodexo began 24 years ago.  Sodexo is a privately held company responsible for the daily maintenance of our district facilities and grounds.  The district’s annual contract with Sodexo is about $14.5 M.

Recently, there have been two management issues on the part of Sodexo that uncovered mismanagement and financial impropriety.  The employees in question are no longer employed by Sodexo.

The first incident occurred this past February.  In my capacity as superintendent, I moved the monitoring and daily execution of the Sodexo contract to the same district employee who also negotiates the contract.  This district employee noted some transactions that were of concern.  We immediately notified Sodexo leadership and the company initiated an investigation of its financial transactions.  Sodexo’s investigation into the matter determined that there was a conflict of interest involving a former Sodexo employee.  Sodexo reimbursed the District in the amount of $220,000.  Sodexo also provided additional compensation to the District in the amount of $280,000.

Following this first incident, Sodexo replaced its local management.  The district continued to work with Sodexo leadership and the new local management in monitoring financial transactions that resulted in the discovery of the second incident.  The second incident occurred in July when the new local Sodexo manager noted possible financial impropriety by employees.  The company immediately notified Lubbock ISD leadership and initiated an investigation of the financial transactions dating back to 2003.

The resulting investigation conducted by Sodexo revealed improper activity on the part of two Sodexo employees.  Sodexo representatives have fully cooperated with the District throughout this process, and all documentation from the investigations has been turned over to Matt Powell, the Lubbock County District Attorney.  The two employees no longer work for Sodexo.

The employees involved in these matters were Sodexo employees, not Lubbock ISD employees.  There has been NO wrongdoing whatsoever on the part of Lubbock ISD employees.

Sodexo has made the district whole through restitution for improper transactions dating back to 2003 totaling $446,804 and additional interest and settlement with the full amount totaling $1,671,790.

We intend to go out to bid for these services in January 2012, a year earlier than required.  The provisions of bid proposal include an annual independent audit paid for by the selected vendor as well as additional contracted safeguards.

We continue to closely monitor all business transactions of Sodexo and all other vendors to ensure that we are protecting taxpayer dollars.