11/07/2011 03:00 pm ET Updated Jan 07, 2012

Snokist Growers, School Lunch Supplier, Investigated By FDA For Repackaging Moldy Applesauce

Federal officials are investigating a school lunch supplier for repackaging applesauce containing potentially dangerous, multi-colored molds.

Food and Drug Administration officials have issued a warning letter to Snokist Growers, a Washington state fruit processor that provides products to baby food makers and to the nation's schools through the National School Lunch Program. Snokist, the FDA says in its letter, uses methods of processing and reconditioning moldy applesauce that is not fully safe and effective to protect people from foodborne illness.

The FDA writes that health violations observed from inspections "cause the food products produced in your facility to be adulterated... in that the food products were prepared, packaged, or held under insanitary conditions whereby they may have become contaminated with filth or rendered injurious to health."

Earlier this year, recalled Snokist products were blamed for the illnesses of nine North Carolina children, who reportedly became sick after consuming applesauce at school, according to MSNBC.

The FDA also says that Snokist failed to correct issues that were brought up in a June inspection, after the company recalled more than 3,300 cases of applesauce in May for dented seals.

The summer inspection revealed that the production facility was laden with violations, including an instance where "non food grade hydraulic fluid was observed dripping from a pipe onto the housing of the apple slice conveyor."

The FDA also found no hand-washing facilities in the production area, dozens of fruit flies -- both alive and dead -- on or near cans and fruit, as well as bird feathers and feces within the facilities.

Snokist issued a statement last week, noting that reworked contaminated product comprise a "very small amount" -- less than 0.3 percent -- of their processed foods.

"It is also important to note that to our knowledge, no reworked product was ever used in product going to the USDA. This means it never went to schools or public food banks," Snowkist officials said in the statement.

The FDA does allow companies to "recondition" food as long as the completed product is uncontaminated, according to MSNBC.

Student health as a product of school food has long been an issue of scrutiny. In late 2009, lawmakers sought reform when it was discovered that standards for inspecting and testing meats sent to schools were lower than those for fast food restaurants and grocery stores.

An investigation in Massachusetts led to the March discovery of a school frozen food storage facility infested with rodents and insects.