School nutrition program finance administration fiscal excellence
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School Nutrition Program Finance Administration “Fiscal Excellence”. Tennessee Department of Education Fiscal Accountability – School Nutrition Spring 2012 Workshops. Management of Non-Profit Food Service Account. 7 CFR Parts 210.14 and 220.13( i ) Non-profit basis Safeguard assets.

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School Nutrition Program Finance Administration “Fiscal Excellence”

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School nutrition program finance administration fiscal excellence

School Nutrition Program FinanceAdministration“Fiscal Excellence”

Tennessee Department of Education

Fiscal Accountability – School Nutrition

Spring 2012 Workshops

Management of non profit food service account

Management of Non-Profit Food Service Account

7 CFR Parts 210.14 and 220.13(i)

  • Non-profit basis

  • Safeguard assets

Allowable costs

Allowable Costs

  • A-87 (2 CFR Part 225 Appendix B)

  • Properly classified as direct or indirect.

Unallowable costs

Unallowable Costs

Bad Debts:

  • Unpaid charges

  • Returned checks

3 questions

3 Questions

  • Allowable

  • Allocable

  • Charged Appropriately

Snp vs other federal programs

SNP vs. Other Federal Programs

  • Other Federal Programs – program costs for reimbursement

  • SFA’s – reimbursement = meals x rate

School nutrition program

School Nutrition Program

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

2011 2012 reimbursements

2011-2012 Reimbursements

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%

Revenue sources

Revenue Sources

  • Federal meal reimbursements

  • Children’s and adults’ payments for meals

  • A la carte items

  • Interest

  • Catering

Revenue may not be used to

Revenue may not be used to


  • land and/or

  • buildings or

  • to construct buildings

Net cash resources

Net Cash Resources

  • Cash on hand

  • Cash receivables

  • Earnings on investments

  • Cash on deposit

  • Value of stocks, bonds, or other securities.

Net cash resources1

Net Cash Resources

Net Cash Resources in Excess of 3 months average expenditures

Excess balance plan

Excess Balance Plan

  • Improve food quality

  • Make other improvements to the school meals operations

Excess balance plan1

Excess Balance Plan

One issue on School Nutrition Side:

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

Direct vs indirect

Direct vs. Indirect

  • 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 indirect1

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 and


“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 indirect2

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 Guidance

    page 21

Commodity s and reporting

Commodity $’s and Reporting

  • 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

State matching

State Matching

  • 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.



  • 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.



  • 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)

Trustee s commission

Trustee’s Commission

  • 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…”

Pricing adult meals

Pricing Adult Meals

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)

Adults eating free

Adults Eating Free

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


  • Paid from SNP funds


  • Permission granted on a case by case basis by the State School Nutrition Program Director. This requires written request from the Director of Schools.

Non program revenue

Non-Program Revenue

  • 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

Paid lunch equity ple

Paid Lunch Equity (PLE)

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 through

1. prices charged for paid lunches

2. non-Federal sources

Paid lunch equity ple1

Paid Lunch Equity (PLE)


Operating balance

Operating Balance

  • 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

Fresh fruit and vegetable

Fresh Fruit and Vegetable

  • Income – Account number 47114

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

Inventory control

Inventory Control

  • What steps are you taking toward inventory control?

  • Do you have written procedures to govern inventory management?



  • 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?



SNP Supervisor’s Responsibility:

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


    (fraud reporting form)

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School nutrition program finance administration fiscal excellence

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