Bill Gang

Thu, Feb 3, 2000 (11:42 a.m.)

A District Court lawsuit has been filed by the nonprofit corporation that for six years ran a federally funded program to feed needy children before its ouster last year amid reports of financial irregularities.

The Smart Start Summer Food Service Program filed the legal action Wednesday against the state Department of Education, seeking more than $1.2 million and an injunction ordering the reinstatement of the program.

The state agency administers the program funded by the U.S. Department of Agriculture, which provides cold breakfasts and lunches to about 100,000 low-income children monthly when school is not in session.

The Smart Start Summer Food Service Program is a subsidiary of Ethel Willia Inc., which does business as Child Care Center and Smart Start Child Care Center.

The lawsuit, filed by attorney John Fadgen, claims the state agency wrongly terminated the contract after one of the program executives, James Chaney, filed a civil rights complaint against the Education Department in 1998.

According to the legal action, the civil rights complaint prompted the state agency to audit the Smart Start program. That resulted in the contract being cut short.

It also resulted in the department refusing to pay for expenses that routinely were reimbursed in past years -- including vehicle and distribution site leases, employee pay, equipment purchases and operating costs.

Funding for the program approached $2 million in 1999, up from $1.5 million in 1998 and $940,000 in 1997.

But court records show the Education Department audit found the available records were "poorly maintained" and there were a variety of costs and expenses that did not fall under the free breakfast and lunch programs.

There were bills for salmon, flank steak, hamburger, hot dogs and chicken nuggets, despite the fact the program was to serve only cold meals to the children.

Hearing officer John Albrecht of the state attorney general's office also noted that available records showed Smart Start had been short of fruits, bread, meats and meat alternatives that were supposed to be part of the lunches.

In addition, court documents show that Chaney and another administrator were drawing full-time salaries while holding down other full-time jobs.

Albrecht also questioned a $230 bill for long distance telephone calls to Mexico and two $500 rent receipts for the same property for the same period of time.

Smart Start operated from 13 sites in Clark County and was the largest provider under the food service program in Nevada, the lawsuit stated.