school nutrition program finance administration “fiscal excellence”

School Nutrition Program Finance

Administration“Fiscal Excellence”

Tennessee Department of EducationFiscal Accountability – School Nutrition

Spring 2012 Workshops

7 CFR Parts 210.14 and 220.13(i)

Non-profit basis

Safeguard assets

Management of Non-Profit Food Service Account

A-87 (2 CFR Part 225 Appendix B)

Properly classified as direct or indirect.

Allowable Costs

Bad Debts:

Unpaid charges

Returned checks

Unallowable Costs

Allowable

Allocable

Charged Appropriately

3 Questions

Other Federal Programs – program costs for reimbursement

SFA’s – reimbursement = meals x rate

SNP vs. Other Federal Programs

The goal of the SNP is for every student to have nutritionally adequate meals served at school.

School Nutrition Program

Paid Lunches 0.26 (Free + Reduced) <60%

Paid Lunches 0.28 (Free + Reduced) >=60%

Free Lunches 2.77 (Free + Reduced) <60%

Free Lunches 2.79 (Free + Reduced) >=60%

Reduced Lunches 2.37 (Free + Reduced) <60%

Reduced Lunches 2.39 (Free + Reduced) >=60%

2011-2012 Reimbursements

Federal meal reimbursements Children’s and adults’ payments for meals A la carte items Interest Catering

Revenue Sources

Purchase: land and/or buildings or to construct buildings

Revenue may not be used to

Cash on hand Cash receivables Earnings on investments Cash on deposit Value of stocks, bonds, or other securities.

Net Cash Resources

Net Cash Resources in Excess of 3 months average expenditures

Net Cash Resources

Improve food quality

Make other improvements to the school meals operations

Excess Balance Plan

One issue on School Nutrition Side:

Not being allowed to budget and expend the excess balance plan.

Excess Balance Plan

Treated Consistently

A cost may not be assigned to a Federal award as a direct costs if that same cost, incurred for the same purpose, in similar circumstances, has been allocated to other Federal awards as an indirect cost.

Two Examples:

Direct vs. Indirect

A school district requires its custodians to record the distribution of their work hours on time cards that capture only two categories:

Kitchen and Cafeteria andOther

“Kitchen” is billed to food service as direct“Other” is treated as an indirect cost, no

portion allocated to food service.

Inconsistent – only SNP is charged directly. Indirect Cost Guidance p. 18

Direct vs. Indirect

Similarly, food service cannot be charged directly for normal maintenance cost if such costs are included in the school district’s indirect cost pool.

Indirect Cost Guidancepage 21

Direct vs. Indirect

Food in addition to reimbursement Federal farm subsidy Based on number of meals served to

students 2011/2012 value is 23 cents Revenue reported under 47112. Accompanying expenditure under 469

Commodity $’s and Reporting

One time yearly receipt 100% used solely in SNP 10% applied to:

◦ Employment of endorsed food service supervisor◦ Employment of cafeteria managers or assistant

managers certified by SNA or working toward certification

◦ Professional training programs for non-accredited personnel.

State Matching

Rebates received during the year in which the food is purchased are a reduction to food costs.

Rebates received on prior year purchased are recorded as “Other” revenue.

Rebates

Required to make all disbursements of public funds by consecutively pre-numbered warrants or checks. TCA 5 -8-207

Refunds are reductions of revenue, rather than new expenditures.

Internal Accounting manual allows refunds under $2.00 (however not good financial management)

Refunds

TCA 8 -11-110

(f) In the event any federal funds for school lunch program purposes are handled by the county trustee, the trustee shall be allowed for the handling of such funds an amount not to exceed ¼%; provided, that such amount shall not be taken from federal funds, but the equivalent thereof shall be paid to the trustee out of either school funds or county general purpose funds…”

Trustee’s Commission

FNS Instruction 782-5

“The minimum adult payment should reflect the full price charged to students, plus the current value of Federal cash reimbursement plus the value of donated food assistance (entitlement and bonus)

Pricing Adult Meals

Directly involved in the operation and administration of the school nutrition program

and Paid from SNP funds or Permission granted on a case by case basis

by the State School Nutrition Program Director. This requires written request from the Director of Schools.

Adults Eating Free

All foods and beverages sold outside of the reimbursable meal

Purchased from school food service funds

The sale must generate at least the same proportion of SFA revenues as they contribute to SFA food costs

Non-Program Revenue

Healthy, Hunger-Free Kids Act of 2010 requires:

SFA’s to ensure sufficient funds are provided to the nonprofit school food service account for lunches served to students not eligible for free or reduced price meals either through1. prices charged for paid lunches2. non-Federal sources

Paid Lunch Equity (PLE)

Example

Paid Lunch Equity (PLE)

Per audit - includes value of inventory

Per books – may or may not include value of inventory

Reported to State Department does not include value of inventory

All must balance except for reconciling inventory per audit

Operating Balance

Income – Account number 47114

Expenditures – current chart of accounts with addition of sub object code

Fresh Fruit and Vegetable

What steps are you taking toward inventory control?

Do you have written procedures to govern inventory management?

Inventory Control

Do your cafeterias cater? If so, do you have a contract? Is the contract itemized to include all

expenses (food, labor, non-food supplies, etc.)?

Did your SNP recoup all costs incurred?

Catering

SNP Supervisor’s Responsibility:

Notify DOS who in turn is obligated to notify comptroller’s office.

http://www.comptroller1.state.tn.us/ca/ (fraud reporting form)

Share Examples

Fraud

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