Preparing for a Food Service Audit

1. Preparing for a Food Service Audit Tips for Surviving a Review Clare Keating Preferred Meal Systems, Inc. May 19, 2011

2. Audit Concerns • How much is it going to cost us? • How long is it going to take? • How much work is it going to be? • Who is going to do all this? • When will it be over? • No really, is it going to cost us?

3. Business Goals / Today’s Agenda • Avoiding Fiscal Actionduring a Review • Accurate Claims for Maximum Reimbursement

4. Tools for Success • Illinois State Board of Education (ISBE) School-Based Child Nutrition Programs Administrative Handbook July 2010- updated Jan 2011 • http://www.isbe.net/nutrition/sbn_handbook/toc.htm • ISBE (free) Workshops • NSLP Certification of Eligibility and Verification- • http://webprod1.isbe.net/cnscalendar/asp/EventList.asp • Basic Training Workshops • Meal Planning, Meal Counting, Claiming • Watch website for dates and locations

5. A Few Acronyms to Know • CRE- Coordinated Review Effort • This is your Administrative Review • SMI- School Meals Initiative • This is your Nutritional Review • NSLP- National School Lunch Program • SBP- School Breakfast Program • TANF / SNAP- Temporary Assistance for Needy Families / Supplemental Nutrition Assistance Program • AAR- Additional Administrative Review More acronyms defined in ISBE Administrative Handbook

6. Coordinated Review Effort (CRE) Review

7. What is a Coordinated Review Effort (CRE) Review? • A CRE Review is an Administrative review of all documents and procedures in federal meal programs. Monitors review eligibility documentation, meal counts and claims, menus, food quantities and serving sizes, and several other areas for compliance. • A CRE Review ensures that students eligible for meal benefits have access to meals that meet all regulations and are counted and claimed in the correct categories. • CRE’s are conducted once every three years. (*new HHFKA 2010)

8. Fiscal Action during a Review • Occurs When: • Eligibility Documentation is inaccurate • Direct Certification • Household Income Applications • Categorical Eligibility • Meal Counting & Claiming Procedures are inaccurate • The most common errors are Application and Claiming Errors

9. Critical Review Areas • Household Eligibility Application determinations, including compliance with the completion of the Electronic Direct Certification process • Benefit issuance • Meal-counting system • Claim consolidation • Menus Important Note: Critical area violations may result in a fiscal assessment. • ISBE may waive the fiscal assessment if less than $600. • No waiver where substantial evidence of violations of criminal law or civil fraud statutes exist.

10. Determining Eligibility

11. Determining Eligibility • Critical to revenue in NSLP and SBP’s • Errors in Household Income Applications and Direct Certification cause the most fiscal action • Attending a workshop is strongly recommended! ISBE Certification and Verification Workshop • July 26 Marion Williamson County Pavilion • July 27 Bloomington Doubletree • Aug 10 Schaumburg Courtyard Marriott • Aug 11 Kankakee Hilton Garden Inn

12. Staying Current • Changes in procedures and paperwork occur each year: • Attend a workshop annually! • Check ISBE website for new documents • Yearly Application- out with the old- in with the new • Updated Income Guidelines- July 1 • Read the Outlook for what’s new

13. Determining Eligibility • Procedures • Send out no earlier than 30 days prior to start of school • Process Applications Centrally • Family Applications may list several students in one district but in different schools • More control over the process- fewer hands, less training needed • Easier to maintain applications in one location • Easier to identify students for extended benefits • Monitors prefer

14. Eligibility Determination Methods • Direct Certification • Certification of SNAP/TANF benefits via Electronic Direct Certification System • Household Eligibility Applications • SNAP/TANF application • Income application • Foster child application • Categorical Eligibility • Homeless, migrant, runaway, or Head Start listing- • *new HHFKA 2010- Foster child • Extension of Benefits to all other children in household

15. What to Expect—Administrative Reviews • Review Checklist with details of WHAT is being reviewed is found on pages 10-14 in the School Food Authority Reviews Section of the Administrative Handbook and online at http://www.isbe.net/nutrition/pdf/nslp_review_checklist.pdf • Reviews are conducted via a cycle once every three years (*new, was every 5 years) • Review Process • Announcement letter to District Superintendent/Authorized Representative • Phone call to schedule on-site visit • On-site visit (usually 1-3 days, depending on SFA size, *new regs require longer, 1-2 weeks) • Review report documenting review findings sent via mail • If needed, the SFA must respond to citations via a Corrective Action Plan • In the near future, review process will be electronic.

16. Tips to Prepare for the Review • Talk to the Reviewer about documents to send prior to the review (Meal Edits) and school selection • Match Benefit Issuance documents to Applications (Arrange applications in the same order) • Review Applications for accuracy • Use Review Checklist that comes with the announcement letter • Reserve a comfortable area with large table, ample space and easy access to District rep • Have meal times for school of review ready • Be Prepared! • Be Available during the review

17. Common Citations for Eligibility Determination on CRE Reviews • Eligibility Determination • Applications not complete, SS# missing, not signed • Math Errors • Incorrect SNAP/TANF numbers • Students approved in wrong category ($$$) • Extension of Benefits • No documentation • Verification • Process is not complete for every application chosen for review.

18. Meal Counting and Claiming

19. Meal Counting • Accurate Meal Counts are critical to claiming meals for reimbursements and receiving funding • Train Foodservice Staff • To understand and identify a reimbursable meal based on chosen Menu Planning Option • To Ensure all meals are accurately counted and recorded in the correct category • Establish Internal Controls that reconcile Production Records to Meals Counted

20. Meal Counting Procedures • Eligibility Documentation • The SFA must have documentation to claim free or reduce-price meals for reimbursement. • Collection Procedures • Steps must be in place for a medium of exchange that does not overtly identify students as free or reduced-price meals. • Point-of-Service Counts • Meals must be counted daily at that point in the food service line where it can be determined a reimbursable meal has been served to an eligible student.

21. Meal Counting and Claiming • Reports • The number of reimbursable meals served daily, by category of eligible students are recorded. • The SFA must evaluate the meal counts for each site prior to submission of the Claim for Reimbursement through the Meal Count Edit Check. • Claim for Reimbursement • Submitted Electronically • Establish Internal Controls • Segregation of duties • On-site visits • Reconciliation of production records to meals

22. Meal Pricing • Paid Meals • *new- Meal Price must be greater than or equal to the difference between the federal reimbursement rate for free meals and the federal reimbursement for paid meals. May increase 10¢ per year • Adult Meals • Must include Student Rate plus reimbursements and commodity allocation. E.g. Student Price + .26 + .2275 = Adult Price • Pricing of Ala Carte Items • Prices should be set so as to NOT compete with the reimbursable meal • * new- All non-reimbursable foods sold must generate revenue at least equal to their cost.

23. Common Citations for Meal Counting on Administrative Reviews • Benefit Issuance • Not updated for changes from verification or from the previous year’s application rolled over. • Meal Count Edits • Edits are not completed monthly. • Problems noted are not followed up. • Audit your FSMC for accuracy • Incomplete Meals Served

24. Common Citations on Administrative Reviews • Application Errors-Inaccurate determination of student eligibility • Claiming Errors- Incorrect meal counts and inaccurate claims • Meal Count Edits – edits are not completed monthly. Problems noted are not followed up • Benefit Issuance – not updated for changes from verification or from the previous year’s application rolled over. • Verification – process is not completed for every application chosen for review. • Sanitation Reviews – less than two reviews are conducted per school year. No documentation requesting review to the local health department. • On site reviews – not completed by February 1st or 3 or more reviews are completed on the same day by the same individual • Production Records – not completed or did not list all food items available in a given day including condiments. • Wellness Policy- no evaluation of policy to determine how well it is implemented • Hazard Analysis Critical Control Points (HACCP) plan – Not following the established plan or Standard Operating Procedures • Offer versus Serve under food based menu approaches – directing the student selections (entrée and milk).

25. School Meals Initiative (SMI) Review

26. SMI Review • Each School district will be scheduled for an SMI review at least once every five years. (*new HHFKA- 3 years) • ISBE (specifically the SMI reviewer) will inform the district in advance when the review is scheduled. • This notification will include: • What week will be selected for review; • What specific information you will need to provide. • Each school district chooses the school for review. • An on-site visit is scheduled at a mutually agreed upon date and time.

27. What is a School Meals Initiative (SMI) Review? • An SMI Review is a menu and nutritional review of the reimbursable school meals. • An SMI Review ensures that meals served under the NSLP and SBP meet the Dietary Guidelines for Americans and specific nutrient and calorie requirements for the age/grade level of the students you serve. • Nutritional analysis of a school week’s menu to ensure compliance with USDA-established standards for calories and other nutrients. • Conducted every three years (*new).

28. SMI Review - Documents Reviewed • School week menu • Production records • Standardized recipes • Nutritional information for productsserved • (if Nu-Menu’s) nutrient analysis

29. Tips for a Successful SMI • Be sure Menus are planned according to regulations • Update Standardized Recipes and be sure staff is trained to follow them • Collect Product Labels and Nutritional Information as products are used • Encourage students to take all components, especially fruits and vegetables • Choose a “Serve” school or one that most components are taken • Be sure Production Records are accurately filled out, no food items are missing and portion sizes are correct.

30. What’s New Recent and Upcoming Changes to Illinois and Federal Food Programs

31. Managing Life-Threatening Food Allergies in Schools • Districts must have policy in place by January 2011. • Guidelines and resources on website http://www.isbe.net/nutrition/htmls/food_allergy_guidelines.htm

32. Web-based Illinois Nutrition System (WINS) • New Computer System to replace Child Nutrition ACES • Planned to release for School Year 2011-2012 • Planned Changes • Application for program will be based on school year – July 1 – June 30 • Monthly Claim for Reimbursement will require the submission of DAILY meals claimed (free, reduced-price and paid) • More information will be forthcoming!

33. Healthy Hunger-Free Kids Act 2010 • Dietary Guidelines • Proposed Nutrition Standards for meal pattern • Final Rule Winter 2012 • Milk- 1% or Fat Free • School Year 2011-12 • Potable Water • Available at no charge to all children • ASAP or SY 2011-12 • Equity in Meal Pricing • Paid Lunch Price- July 1, 2011 • Non-reimbursable meal foods sold • Revenue equal or greater than cost- October 1, 2010

34. Healthy Hunger-Free Kids Act 2010, continued • CRE and SMI Reviews • Every 3 years, implementation date pending • Results must be posted • Community Eligibility Option • Phased in over several years, nationwide 2013-14 • Categorical Eligibility for Foster Children, Oct 2010 • Outreach to Eligible Families- Summer Food Service • Printed or electronic notification of free meals, Oct 2010 • Privacy Protection • Supply last four digits of SS# on household applications, July 1, 2011 (updated application coming soon)

35. Healthy Hunger-Free Kids Act 2010, continued • Local Wellness Policies/ School Nutrition Environment Reporting • TBD • Professional Standards for School Food Service • Required Education, training and certification • TBD • Program Evaluation • Full cooperation with USDA and contractors conducting research- Oct 1, 2010 • Food Safety Audits and Reports • Report of two required food safety inspections • Food safety applied to entire school campus • Oct 1, 2010

36. Visit www.isbe.net/nutrition for Workshop Dates and other important information

37. Thank You