A forensic audit has found that the Nutrition Services department in the Rialto Unified School District received more than $3 million in excess federal funding over a three-year period due to inflated student meal counts.
The audit, which produced 11 findings, concluded that in the summer months of June and July of 2021, 2022 and 2023 the district received more than $2.9 million in overpayments from the U.S. Department of Agriculture, attributed to misreported data in the district’s eTrition system, which tracks student meal accounts and meal program data.
Additionally, the district received excess reimbursements of more than $88,000 in December 2021 and more than $27,000 in December 2022, totaling more than $115,000. The operator listed in eTrition as the one who made the additional meal count entries was former Nutrition Services program innovator Kristina Kraushaar, according to the Oct. 31 findings report by accounting and auditing firm CliftonLarsenAllen, or CLA, which was obtained by the Southern California News Group.
Kraushaar resigned from the district on Feb. 26 to take a position as the food services director for Chaffey Joint Union High School District.
Now the district has to pay the money back, and is working with the state on reimbursement, district spokesperson Syeda Jafri in a news release.
“The district has incurred a $3 million penalty related to the over-reported meal counts,” Jafri said. “It is working cooperatively with the California Department of Education to reconcile these discrepancies and ensure accuracy moving forward.”
Criminal investigation urged
An attorney for the main whistleblower in the scandal says that’s not enough.
Daniel Moussatche of the Riverside law firm Wagner Zemming Christiansen demanded a criminal investigation, claiming the district’s audit “minimizes their liability and lack of oversight.”
Moussatche, who represents Nutrition Services supervisor Sarah Dunbar-Riley, said the audit findings are only the tip of the iceberg, and confirmed “a massive fraud without a full investigation of all the illegal activities raised by multiple whistleblowers.”
“The time has come for state and federal criminal investigators to investigate and bring criminal wrongdoers to justice,” Moussatche said. “There are literally millions of dollars of taxpayers’ money that are yet to be accounted for and the district does not want to fully audit the nutrition program.”
District officials did not immediately respond to the question as to whether the district will request a criminal investigation
In a statement, board President Stephanie E. Lewis said, “As we implement the recommendations from the nutritional services audit, we reaffirm our commitment to the community: protecting our resources, enhancing our academic mission, and ensuring that every student has the opportunity to thrive. We stand united in our dedication to educational excellence and are driven by a sense of purpose.”
Who foots the bill?
Under the National School Lunch Program, the U.S. Department of Agriculture offers free or low-cost meals to participating schools, and the states oversee and administer the program. In California, that task falls to the state Department of Education. Participating school districts, such as Rialto Unified, submit monthly reimbursement claims to the state indicating the number of student meals served, and the state then cuts a check to the district and is reimbursed by the USDA. The Department of Education also coordinates with school districts to reimburse the federal government for any overpayments made.
The audit findings underscore a nearly yearlong investigation by the Southern California News Group into allegations by more than a dozen current and former Nutrition Services employees who claimed that former department lead agent Fausat Rahman-Davies and her top managers, Kraushaar and former assistant agent Maria Rangel, had been been inflating student meal counts for years and misappropriating food intended for students.
The motivation behind the meal count misreporting remains unclear. Current and former Nutrition Services workers and other district employees did say that Rahman-Davies essentially was given carte blanche to run the department, and she, in turn, made unreasonable demands on her staff that exceeded the scope of their job descriptions.
“She called it her village, and she called us her villagers,” said one Nutrition Services employee who spoke on condition of anonymity.
Rahman-Davies, Rangel and Kraushaar have not responded to requests for comment on the allegations since the Southern California News Group began its investigation in December 2024.
According to the audit findings report, Rahman-Davies denied that she instructed her staff to falsify meal counts.
Rahman-Davies, who worked for 30 years in the Nutrition Services department, the last six as its lead agent, agreed to resign in September as the audit was wrapping up. Rangel retired in June.
The audit also found that Rahman-Davies directed her staff to volunteer, on district time, at a local food pantry that donated food to the district’s Keystone Pantry, which provides food to local families. Rahman-Davies also directed employees to distribute food from the district’s Keystone Pantry “outside the established process to individuals,” according to the audit findings.
Other key findings in the audit include:
- The district’s eTrition system was compromised because multiple individuals had access to a shared list of static usernames and passwords.
- Meal count entry transactions had been voided from the eTrition system without identifying the employee who did it.
- Rahman-Davies did not fully perform verification procedures for student meals claimed in the eTrition system
Allegations surfaced in 2023
The allegations first surfaced in the summer of 2023 during a separate investigation triggered by Dunbar-Riley’s complaints of employee mistreatment in the Nutrition Services department by Rahman-Davies, Rangel and Kraushaar. Dunbar-Riley is now suing the district, alleging whistleblower retaliation and harassment.
Dunbar-Riley’s allegations prompted then Superintendent Cuauhtemoc Avila to commission an audit in December 2023, but it was shut down — or “paused,” as the district explained it — shortly after he was abruptly placed on leave in May 2024 and Edward D’Souza was named acting superintendent.
District officials have not addressed the question as to why the first audit was shut down, who shut it down, and why it took nearly a year for the district to resume it.
It was later revealed in a claim and subsequent lawsuit by Avila that he was placed on leave due to a claim of sexual harassment by Patricia Chavez, the district’s former lead agent of innovation, which was later determined to be unfounded. Yet after a 10-month investigation, the school board voted unanimously to fire Avila in February, without cause.
In his lawsuit, Avila claims board member Edgar Montes — a friend and ally of Rahman-Davies — orchestrated his placement on administrative leave.
The board replaced Avila with interim Superintendent Judy White, who resumed the audit in March and brought in CLA to conduct it.
Vindication for former superintendent?
In a statement, Avila’s attorney, Robert Brown, said, “The results of the investigation appear to justify Dr. Avila’s decision not to bow to pressure to close the Nutrition Services investigation. I hope the District regards these findings as serious enough to merit criminal prosecution of the potential wrongdoers. I’m very curious as to what action the District is going to take after being presented with these investigative findings.”
Rialto Police Chief Mark Kling said his department would not investigate the school district because it would be out of its jurisdiction. He said the the FBI and state attorney general’s office would be the proper agencies to investigate.
“I would encourage the district to contact both the FBI and the state AG’s office to advise them of the information,” Kling said.
Inconsistencies identified
According to the district, auditors analyzed eTrition reports for bulk entries made, the timing of when the entries were made, whether there was any evidence of voiding of entries that were then replaced with larger meal count numbers, and any other inconsistent patterns. Investigators, according to the district, limited their analysis to fiscal years from 2021 to 2024, but did not indicate why.
While meal counts for the regular, daily food program were largely accurate, discrepancies were identified in meal counts reported to the state during certain months of the COVID-19 pandemic, as well as in the district’s subsequent summer feeding program, Jafri said.
“In response to multiple findings, business services leaders and nutrition supervisors immediately addressed several identified procedural weaknesses,” Jafri said.
Auditors, according to the report, also were thwarted by some employees who refused to cooperate in the investigation or denied wrongdoing.
“Operators recorded in eTrition denied having entered inflated numbers in eTrition or declined an interview with CLA,” according to the report.
Unable to determine who made changes
District officials said meal count quantities initially entered by school sites for June 2023 were voided between July 3 and 13, 2023, and replaced with greater meal quantities for six secondary schools. But it was impossible to determine who was responsible for the adjustment.
“Although there is evidence that the original meal count quantities entered by secondary school sites were voided and then replaced with greater quantities, it is not possible to determine what operator entered these voiding transactions into eTrition in June 2023,” according to the district’s news release. “The investigators were unable to rely on the operator listed because passwords were compromised as they were accessible by multiple employees.
“This practice violated standard cybersecurity protocols, increased the risk of unauthorized access, and made it impossible to reliably track user activity or hold individuals accountable for system entries,” the district concluded in its summary of the findings.
Jafri said compliance with state and federal regulations “is a top priority for the district, and we will continue to implement policies and procedures to ensure full compliance with Nutrition Services regulations and best practices.”
“The first step is to acknowledge the findings and implement corrective actions,” she said. “The next step is to work with the state to correct the claim and return the monies to the federal government.”
