The recipe to avoid $16 muffins

In August 2009, the Department of justice held a legal training conference at the Capital Hilton in Washington, D.C. More than two years later, on September 20, 2011, the Department of Justice Office of Inspector General issued an internal audit report, where they stated, “We found the Department spent $16 on each of the 250 muffins served at an August 2009 legal conference in Washington.” This drew an immediate response from Sen. Chuck Grassley, the senior Republican on the Senate Judiciary Committee, which has oversight of the Justice Department. “Sixteen dollar muffins… are what make Americans cynical about government and why they are demanding change. People are outraged, and rightly so.”

If the muffins really did cost $16, then Sen. Grassley would be correct. But did they? Taken directly from the report, here is an excerpt from the paragraph that caused the controversy:
Considering the EOIR reported that at least 534 people received refreshments at its 2009 Legal Training Conference in Washington, D.C., it spent an average of $14.74 per attendee per day on food and beverages—just above the $14.72 JMD limit for refreshments. However, many individual food and beverage items listed on conference invoices and paid by the EOIR were very costly. The EOIR spent $4,200 on 250 muffins and $2,880 on 300 cookies and brownies. By itemizing these costs, we determined that, with service and gratuity, muffins cost over $16 each and cookies and brownies cost almost $10 each.

Butter, sugar, eggs, vanilla, flour, salt, baking powder and baking soda are common ingredients in most types of muffins. When adding up the cost of these ingredients, the total cost is far less than $16. What else contributed to the cost of these muffins?

Hilton Worldwide says the price included not only breakfast baked goods but also fresh fruit, coffee, tea, soft drinks, tax and tips – which the report says the conference received “for free.” Hilton also says the report misinterpreted their invoices, which often use shorthand and don’t reflect the full menu provided.

Of course, the invoices were the source of the problem. If they had been more complete and detailed, this whole issue would have been avoided. The auditors would have seen that the cost of the food service included many other items, such as labor costs.

Labor costs
Payroll costs can account for as much as one-third of a meal function’s total price. The actual price for muffins, coffee and whatever else includes the cost for making and serving them, setting up the tables, chairs, place settings, decorations and center pieces. It also includes the costs of dishwashers, banquet housepersons, supervisors and cleaning up, not to mention the fixed cost of the facility itself. In some cases, as in this one, food items are purchased from suppliers who specialize in producing mass quantities that they sell to numerous facilities. While this reduces the facility’s labor cost, it does increase the cost of the food.

What did the ‘muffin’ really include?
• Fresh fruit
• Coffee
• Tea
• Soft drinks
• Labor
And, of course, the muffins.

It’s the meeting planner who is responsible for ensuring that the invoices reflect the true costs of all items, whether each item is individually priced or the entire meal is priced collectively and includes all items listed in detail. That way, if any questions do arise regarding the cost of a meeting, the answers will be readily available.

What do you think should have been done to prevent this from happening? How else could it have been handled? I look forward to hearing your comments.

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0 Responses to The recipe to avoid $16 muffins

  1. $16 is indeed an exorbitant amount to pay for a muffin! Interesting post.

    A simplified answer to your question: perhaps it could have been avoided if the conference organizers had spent a bit more time in the accounting department. In large scale events, people generally tend to look over the minor details and focus more on larger issues.

  2. Mark Rechner says:

    Good point. If the meeting planners were more familiar with the accounting process and how expenses are considered, it could help prevent occurences like this. Thanks!

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