ELIZABETH — The Elizabeth Board of Education — which has been the focus of an investigation over abuses within its school lunch program — agreed today to settle charges it improperly provided free meals and catering for school board meetings.

In a settlement with U.S. Attorney Paul Fishman, the school district agreed to pay $322,310 in costs and penalties to resolve allegations it used federal and state funds to supply meals and catering services for the school board and other school functions.

According to the U.S. Attorney's office, the district used the federally subsidized lunch program to set up and serve $182,243 in meals for the board over a six-year period, and another $90,567 to cater food to various schools, principals, and administrators within the district between 2008 and June 2014.

The district did not acknowledge or admit to any wrongdoing, but said it agreed to the settlement to avoid the cost of litigation.

"It was a bookkeeping error that was corrected in 2013 before we were ever approached by the U.S. Attorney's office," said Bruce Rosen, a lawyer for the Elizabeth board. "It's all been paid back. It should have come out of the board's budget, rather than the food services budget. The vast majority of it was the cost of overtime by workers, not the cost of food."

In addition to paying back the program $272,810, the board also agreed to $49,500 in civil penalties.

As part of the settlement, the Elizabeth board additionally agreed to further training and will be subject to three years of monitoring by N.J. Department of Education, Office of Fiscal Accountability and Compliance and N.J. Department of Agriculture, officials said.

The National School Lunch Program offers state and federal reimbursements to provide free or reduced-cost breakfast and lunch to children of needy families. Eligibility is based on income.

Federal officials said while there is nothing improper about a district using the food service program to generate additional revenue by selling snacks and meals and providing catering services, all the money earned from these services must be used solely for the lunch program.

Past abuses

Elizabeth has been the target of an ongoing state investigation into its federal lunch program, with a series of criminal cases that were sparked by an examination of board records obtained by The Star-Ledger.

Former school board president Marie Munn was convicted last year of falsifying applications to obtain free meals for her children, after the investigation by the newspaper found she was ineligible for the program. Prosecutors said Munn grossly understated her household income by as much as $100,000, allowing her children to receive $2,649 in free lunch benefits to which they were not entitled. She was later sentenced to probation.

The abuses in Elizabeth led to an inquiry by the state comptroller, which found what it called "widespread fraud" in New Jersey's school lunch program. In a report, the comptroller cited more than 100 people on public payrolls, or their family members, who allegedly lied about their income so their kids could eat in school for free. Among those caught cheating were 40 school district employees and six school board members in Pleasantville, Newark and Paterson.

Charges are still pending against two attorneys for the Elizabeth school district also charged in the case — Kirk Nelson, the attorney for the board of education, and Frank Capece, the board's outside counsel.

Both were accused of helping another former board member, Juan "John" Donoso, cover up his own falsified lunch program application. A spokesman for the state Attorney General's office said a status conference is scheduled for June to determine a trial date for all three.



Ted Sherman may be reached at tsherman@njadvancemedia.com. Follow him on Twitter @TedShermanSL. Find NJ.com on Facebook.