When Is A $16 Muffin Not a $16 Muffin?

It turns out DOJ didn't have $16 muffins after all--they were just charged $16 for each muffin.

Remember yesterday’s story about the Justice Department’s $16 Muffins and $32 Cracker Jacks? Well, Kevin Drum has done some digging and a pronounces it a myth. Here’s what the report in question actually found:

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. We credit the EOIR for implementing the following controls to reduce food and beverage costs: (1) it provided just refreshments and not full meals, (2) it ordered fewer refreshments than the total number of reported attendees, and (3) it received 15 gallons of coffee, 30 gallons of iced tea, and 200 pieces of fruit for free. 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.

Kevin quite correctly deduces that the muffins weren’t actually $16; rather, the cost of the “free” coffee, tea, and fruit were built into the muffins. That’s what I guessed was going on when I observed, “itemized costs are often dubious, with some items inflated to keep others under artificial spending limits.”

This is pretty standard procedure at conferences and, well, just about everything. You usually don’t actually get an itemized breakdown of costs. And, when you do, it’s often seemingly random. That’s why a hospital aspirin costs $200 and a military hammer costs $600; they’re just made up numbers to add up to the total cost.

I’m reminded of an old joke about a businessman whose umbrella was broken while traveling for work. He bought a new one and expensed it, only to be told by the accounting department that this was not an allowable travel expense. After his next trip, he turned in his expense report with a Post-It attached: FIND THE UMBRELLA.

So, basically, the budget allowance for refreshments was $14.72, they actually spent $14.74, and the amount was all assigned to muffins and cookies. That’s a bookkeeping decision, not an outrageous overcharge for baked goods. And, certainly, less than $15 per person for snacks and drinks strikes me as a reasonable expense.

Now, as Kevin goes on to note, “None of this is to say that DOJ didn’t overspend on its conferences.” Indeed, that was the whole point of the internal DOJ audit. But the problem is in holding them at expensive sites, spending huge amounts on outsourced event managers, and such. Or, quite possibly, holding so many conferences to begin with.

FILED UNDER: Bureaucracy, US Politics,
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. I pretty much expected something like this to come out when I saw the original story.

    Nonetheless, I very much expect to be hearing about “$16 muffins” for easily the next decade (if not longer).

  2. Hey Norm says:

    So much for the “Buffet Rule”.

  3. MM says:

    But the problem is in holding them at expensive sites, spending huge amounts on outsourced event managers, and such. Or, quite possibly, holding so many conferences to begin with.

    Well yes, but nobody is going to have that discussion. Instead people are going to talk about expensive muffins and $5 cokes as examples of government waste, rather than the value of the conferences themselves.

  4. Muffler says:

    Is anyone yet tired of these over simplified accusations meant to cause emotional response by the GOP? You might start to be concerned that the GOP doesn’t really spend time doing the math or doesn’t know how to do the math or is uninterested in any math. Seems the last two fit the bill the most. Just look at trickle down economics.

  5. mattb says:

    @Muffler:

    Is anyone yet tired of these over simplified accusations meant to cause emotional response…

    Yes… but I had to cut this off as this problem isn’t restricted just to the GOP — its just that they’ve recently been the loudest.

    This is one area where I think it is fair to make comparisons. The problem is — of course — that its easy to foster moral outrage (especially when people see it as connected to them). Unfortunately, it’s also easy to channel that outrage into short term profits (be they ratings. books, or election results) without ever addressing the longer term problem.

    Outrage, in other words, is a very profitable industry.

  6. john personna says:

    Hmmm. So where did the $75M go?

  7. joe blow says:

    @Steven L. Taylor:

    To knowingly bill the federal government for what you state as free is called fraud. Please don’t be fooled by the propaganda engine.

  8. joe blow says:

    To state to the federal government something is not being charged for or “free” and then knowingly charge for it by marking up another service or product above reasonable market cost is called FRAUD. Thanks for outing them …and that you are clearly in the bag.

  9. Nikki says:

    @joe blow: Oh please. You don’t believe that Hyatt, Hilton, Marriott and all the rest don’t do this when it comes to getting government conferences at their properties? It’s called doing business.

  10. MarkedMan says:

    @Hey Norm: “Buffet Rule”. Brilliant. Props.

  11. MarkedMan says:

    Bottom line – the budget for catered food and drink was just shy of $15 and if anyone thinks that is unreasonable at a conference then you’ve never arranged a conference. The organizers stayed within the budget (OK, before the wingers here get their panties in a twist, I’ll concede that they went a tenth of a percent over budget). Some hack in the Republican BS machine scoured their ER and figured out a way to make this into a scandal. Which just reinforces my practice of rejecting out of hand anything these guys say. They are not interested in truth, only BS, and it is not worth the effort to find out if they’ve accidentally stumbled upon truth.

  12. john personna says:

    @MarkedMan:

    There was another bit in the original report:

    The Justice Department spent $73.3 million on conferences in fiscal 2009, compared with $47.8 million a year earlier, according to the report.

    Are we now in danger of not questioning the increase, because $16 for a “muffin” isn’t too bad?

  13. MarkedMan says:

    @john personna: What are you basing your questioning on? The Justice Department increased their conference budget. OK. Why the baseline assumption that it was a waste? I’m not saying I KNOW it wasn’t, maybe you’re right. I hope responsible people are giving it a responsible look, but I’m not going to get worked up unless someone with some legitimacy finds a problem. The incredibly dishonest and flawed “analysis” that uncovered the $16 muffin scandal and the blow-hard dittohead Fox-news hyper ventilating coverage doesn’t even remotely fall into that category.

    Here’s a corollary to your call for further press inquiry: I accuse you of being a murderer. Investigation reveals that you once shared a bus seat with the victim, but were two states away when the murder happened. I then say, “yeah, maybe you didn’t commit that murder but now that we know your name has been linked to at least one capital crime let’s see what else we can dredge up.”

  14. john personna says:

    @MarkedMan:

    Here’s a corollary to your call for further press inquiry: I accuse you of being a murderer. Investigation reveals that you once shared a bus seat with the victim, but were two states away when the murder happened. I then say, “yeah, maybe you didn’t commit that murder but now that we know your name has been linked to at least one capital crime let’s see what else we can dredge up.”

    It’s nutty talk like that, that makes me think you don’t want to question the $47M to $73M increase.

  15. James Joyner says:

    @MarkedMan: No, the $18 muffin, $35 Cracker Jack, and the like were in the DOJ IJ report. Bloomberg and others pulled it out and wrote a story on it.

    @john personna: You’ll note that my original blog post on the subject guessed that something like this was behind the muffins but went on to talk about the massive amount spent on conferences overall. Which was what the DOJ IJ report was actually complaining about; the muffins and whatnot were just examples in the report from someone who didn’t understand how these things work.

  16. To follow up on James’ comment: I have no problem criticizing/analyzing conference spending at the DOJ.

    What irks me is that slogans like “$16 muffins” becomes simplistic “arguments” used as a though that is all one really needs to know about how Washington works. It makes serious discussion a bit difficult.

  17. MarkedMan says:

    @john personna: You’re right. I don’t want to question the increase. So far there is nothing to indicate anything untoward going on. If someone were to audit my departmental travel budget they would find it went up by something like a factor of 10 over the previous year. Because my work required me to be on the road over 100 nights last year. So the fact that the DOJ’s conference budget went up doesn’t tell us a GD thing. Is there any reason to think that it is some ripoff or scam? If you are of the mindset that everyone who works for the government is a sleazy parasite, well, yes. But if you are of the mindset that maybe you should have a bit of evidence before you start pillorying people in public, that you should treat people with respect regardless of the who they work for, then, well, no.

  18. James Joyner says:

    @MarkedMan: Again: It’s the Justice Department Inspector General’s office who’s claiming that there were major improprieties in the travel budget.

  19. MarkedMan says:

    @James Joyner: James, if I’m wrong about this, if I’ve succumbed to the “if I’m angry that only makes me more right” fallacy, I’ll take back everything I’ve said. But so my understanding is that the JDIG found that a) the JD has spent a lot more money in 2009 than in 2008 on conferences, and b) that muffins cost $16. The first is only significant if you can show that the conferences weren’t justified. The second is, well, such a bad analysis it makes it hard to believe any other inferences made. But like I said, if the IG report lists specific and significant improprieties, I will take it all back and apologize to boot.

  20. James Joyner says:

    @MarkedMan: The entire report is available in PDF format.

    Scanning it reveals that it was written by the pedantic fellow who pointed out the $18 muffins, which were prominently mentioned even in the Executive Summary. You also get this sort of thing:

    Sponsoring components and event planners were unable to provide adequate justifications for the expensive food and beverages at the reviewed FY 2008 and 2009 conferences. Event planners sometimes attributed the expense of food and beverages to the high cost of locations where some of the reviewed conferences were held, such as San Francisco, California. Other event planners said that because previous conferences always
    featured meals, attendees have come to expect meals at their conferences. We do not believe that these reasons appropriately justify using DOJ funds to serve expensive meals.

    The meals were pretty expensive, averaging some $80 a head. That’s fairly pricey even by hotel standards and especially on the taxpayer dime. But expectations are actually a fairly reasonable factor; people expecting decent meals are going to be unhappy if given bologna sandwiches.

    Here, again, the auditor doesn’t understand how the world works:

    We also identified several instances when event planners reported that
    hotels waived meeting space rental fees when the event planners incurred a minimum food and beverage cost. Although free meeting space may provide an opportunity for DOJ components to save money, we found no evidence that components or event planners determined that the cost of meals and refreshments was less than what the cost of meeting space would have been had the meeting space not been provided for free. Without this
    type of cost-benefit analysis, DOJ components and event planners cannot demonstrate that they complied with the Federal Travel Regulation or DOJ guidelines that require that conference costs are kept to a minimum.

    The Executive Summary concludes:

    DOJ components sponsoring conferences have a responsibility to:
    (1) minimize conference planning costs and (2) ensure the food and beverages provided are incidental, reasonable, and only provided at workrelated events. Our audit determined that DOJ components that sponsored conferences did not track and report external event planning costs as required, and that these costs, especially indirect costs, varied widely. In addition, individual conferences featured full meals, beverages, and snacks that were costly, especially after hotel service charges and event planner indirect costs were applied to each meal and refreshment. By itemizing each item of food or beverage provided to conference attendees, we found that one conference had $16 muffins while another had coffee and tea that cost
    more than $1 per ounce. Our audit work and findings resulted in 10 recommendations to help
    DOJ components properly account for and minimize conference costs. For example, we recommend that pertinent DOJ components ensure that:
     Conference cost reports are accurate in that they include all salaries, benefits, and other costs charged to the government by all associated funding recipients, and
     Cooperative agreements with training and technical assistance providers are used to procure logistical event planning services only once it is demonstrated that this method is the most cost effective approach.

    So, while some of this is arguably chickenshit, it’s the DOJ assessing its own performance at following the guidelines. In addition to pricey locales, the biggest ding seems to be outsourcing event planning at premium rates. We don’t do that in the non-profit world, so I wouldn’t expect the government to do it, either.

    That reporters have less of a clue about how these things work than the DOJ IG is hardly surprising.

  21. john personna says:

    But expectations are actually a fairly reasonable factor; people expecting decent meals are going to be unhappy if given bologna sandwiches.

    Doesn’t Subway Catering make everyone happy? 😉

    Seriously, as someone mentioned above, it is probably that the JD is mentally comparing with industry “peer groups.” In that situation, choosing the right “peer” justifies what you like.

    In my field $1000 desk chairs were an executive perk, but our state college faculty had them “because industry does.” Etc.

  22. James Joyner says:

    @john personna: In my experience, government mirrors but lags industry on these things. That is, there’s a hierarchy in which college presidents mirror corporate CEOs, deans and provosts mirror VPs, and professors mirror middle managers and roughly the same thing in the federal sector, substituting SES/flag officer, GS14-15/O-5-6, and GS 12-13/O-4. But, in most incidences I’ve seen, they’re actually one step down in most cases. The exceptions being when security concerns can be used as an excuse for perks.

  23. john personna says:

    @James Joyner:

    professors mirror middle managers

    Mismatch 😉

  24. john personna says:

    (When straight Profs came into our shops, they came in as Sr. Engineers.)

  25. JKB says:

    Scott Greenfield has a unique perspective on this matter. From someone who has defended corporate defendants from fresh-faced AUSAs who believe they know how things should be run.

    The message of $16 muffins isn’t just that the government doesn’t do a very good job of using its resources with some reasonable degree of thrift. The message is that the very people who believe that they are uniquely capable of telling others, people who are employed for the purpose of achieving goals and accomplishing tasks, how they must do so upon pain of prosecution and conviction, aren’t very good at it. In fact, they suck at it, as demonstrated by the $16 muffin. Or the laundry list of other financial misuse, as determined by the DOJ Inspector General.

  26. @JKB: That quote assumes that the government actually paid $16 for a muffin. Did you read James’ post?

    Indeed, you are proving that I had reason for my lament in my first comment in this thread.

  27. JKB says:

    @Steven L. Taylor: Did you read the quote? The point isn’t $16 muffins. It is that the DOJ who have prosecuted corporate officers and business owners for less, can’t follow their own rules, or feel free to deviate from the regulations without following procedure as is evidenced by the IG report. A report over which no one will probably even be disciplined much less prosecuted.

    As for everyone’s opinion that the costs aren’t really that much and they cover the service, etc. That hardly matters as the point is the DOJ had regulations that were disregarded by DOJ personnel when they arranged these conferences. Providing food at government conferences and meeting is fraught with danger due to overlapping regulation and Congressional bans. Yet for some reason, DC bureaucrats seem never to learn and are always trying to skirt the rules. One assumes because senior managers want to be like the corporate world or something.

  28. @JKB: Yes, I read the quote. Did you read the post?

  29. mattb says:

    @Steven L. Taylor:

    @JKB: Yes, I read the quote. Did you read the post?

    I’m not sure he even read the post he linked to. If he did he would have seen that the first/only commenter on that thread largely says the exact same thing as James does — noting the flawed fundamental assumption of the essay — that the muffins actually cost $16 and that this is all an issue of accounting practices.

    The article author’s response “cool story bro.”