East Lyme — The company that provides school lunches in East Lyme agreed to cover the legal expenses and auditing fees the town will incur to investigate the impact of their former director of dining services' alleged embezzlement of $334,778.

School board Chairman Kevin Seery said a representative from the company, Chartwells, met with the town's auditors, lawyers and school officials on Monday.

"We wanted to make sure that there won't be any losses to the district," Seery said. "We are satisfied with their intentions right now. They've been very cooperative."

According to the school district's contract with the company, if Chartwells runs a deficit at the end of the year, the school system does not have to make up the difference. If there is a profit, it's shared between the company and the school system.

It's unclear how much money the district may have lost in profit, school officials said.

Superintendent James Lombardo said any money recovered will go back to the district's enterprise fund, which is used for the school nutrition program.

According to court documents, Beverly Howard, 53, of Westerly, allegedly embezzled $334,778.31 from the school lunch fund over three years while working as the dining services director. Chartwells fired her around the time its auditors discovered the missing money in September.

The arrest warrant says the money was used to support a gambling loss that amounted to $381,406 over six years at Foxwoods Resort Casino and $536 at Mohegan Sun.

Howard was charged with first-degree larceny and is scheduled to appear in New London Superior Court Dec. 2.

In July, the Board of Education renewed its contract with Chartwells for one year. It is in the middle of a five-year contract, which is renewable every year and calls for the district to pay the company an annual operating fee of around $82,000. The district has used Chartwells as its school lunch provider for more than 10 years, and Seery said the board has no intention of changing the contract.

Dining service and cafeteria staff are employees of Chartwells. The school provides money for the kitchen equipment.