Direct Diversion Processing Monitoring

1. Direct Diversion ProcessingMonitoring Wednesday, October 29, 2014 4:00 to 5:00 p.m. Holiday Inn Hotel and Convention Center Stevens Point, WI

2. Direct Diversion Processing Monitoring • Process: • Participating School Food Authorities (SFAs) enter bulk pound commitments to designated processors on annual order survey. • Final, revised bulk pound commitments are available for SFAs to view after mid-May. • After July, SFAs should verify all final bulk pound commitments have been deposited into their account by each processor. • Throughout school year, SFAs must monitor all direct diversion monthly activity.

3. Direct Diversion Monitoring • Participating SFAs enter USDA Foods bulk pound commitments on annual survey.

4. Annual Order Entry Screen

5. Annual Order: Survey Results • Final USDA Foods bulk pounds after adjustments are available approximately mid-May.

6. Annual Order: Survey Results ADJUSTED POUNDS

7. Direct Diversion Monitoring • Participating SFAs compare all final bulk pound commitments to the processor’s inventory management system: • To ensure that the final bulk pound commitments have been deposited. • To verify the accuracy of the deposits entered.

8. Processor Link Bulk Pounds Deposit Carryover Pounds SY2013-14 Commitment

9. K-12 Bulk Pounds Deposit SY2013-14 Allocations Carryover Pounds

10. Monthly Monitoring • Basic areas for monthly monitoring: • Verify number of cases ordered against what was received. • Verify fee invoiced to ensure accuracy. • Verify USDA pounds per case and that draw down occurred.

11. Monthly Monitoring • Monitoring varies according to which value pass through method is being utilized. • Value Pass Through Method available: • Fee-for-Service—Processor • Fee-for-Service—Distributor • Rebates/Refunds • Net Off Invoice (NOI)

12. Fee-for-Service—Processor • Wisconsin Department of Public Instruction Example from SY2013-14 • Tyson Chicken Nuggets: • State Processing Program: • 23,516 cases x 13.20/lbs per case = 310,412 lbs. • Poultry has white and dark meat deposits: • 170,726.60 – white meat deposit (55%) • 139,685.40 – dark meat deposit (45%)

13. Fee-for-Service—Processor White Meat Bank SY2013-14 Commitments/white meat

14. Fee-for-Service—Processor Dark Meat Bank SY 2013-14 Commitments/Dark Meat

15. Fee-for-Service—Processor • Using invoice from processor: • Verify that the number of cases received match SFA’s order. • Verify that the price per case on the invoice matches the bid price obtained by the SFA.

16. Fee-for-Service—Processor TOTAL CASES RECEIVED PRICE PER CASE

17. Fee-for-Service—Processor AMOUNT RECEIVED IN WAREHOUSE

18. Fee-for-Service—Processor TOTAL CASES RECEIVED PRICE PER CASE

19. Fee-for-Service—Processor AMOUNT RECEIVED IN WAREHOUSE

20. Fee-for-Service—Processor • Using the processor’s inventory management system (may be an electronic monitoring system or manual monitoring system): • Verify number of cases received listed on invoice(s) matches number of cases shipped listed in system. • Verify amount of pound draw down per case matches Summary End Product Data Schedule (SEPDS) for each product. • Verify that pounds were draw down in inventory management system.

21. Fee for Service—Processor Draw down per case (13.20 lbs) Product Code (2155)

22. Fee-for-Service—Processor Total Cases Received (1572) Total pounds drawn down: 13.20 lbs/case x 1572 = 20,750.40 lbs. Product Code (2155)

23. Fee-for-Service—Distributor • Using invoice from distributor: • Verify that the number of cases received match SFA’s order. • Verify that the price per case on the invoice matches the procurement price obtained by the SFA. This price includes the fee for service price plus distributor’s delivery fee. Ensure that the invoice does not include a separate delivery fee.

24. Fee-for-Service—Distributor Invoice No. Number of Cases (6) Price per Case ($40.85) Processor Name and Product Description

25. Fee-for-Service—Distributor • Using the processor’s inventory management system (may be an electronic monitoring system or manual monitoring system): • Verify number of cases received listed on invoice(s) matches number of cases shipped listed in system. • Verify amount of pound draw down per case matches Summary End Product Data Schedule (SEPDS) for each product. • Verify that pounds were draw down in inventory management system.

26. Fee-for-Service—Distributor Summary End Product Data Schedule (SEPDS) Bulk pounds draw down per case (31.07 lbs) Product Code (9737) Entitlement Value per Case ($71.07)

27. Fee-for-Service—Distributor Total bulk pounds drawn down for all AdvancePierre purchases Total entitlement value draw down for number of cases purchased in April, 2014 (71.07/case x 67 cases) Bulk draw down per case/total draw down for 67 cases

28. Fee-for-Service—Distributor Shipping Details Screen in ProcessorLink Invoice Number (638573) Number of cases shipped (6) Product Code (9737) Draw down per case of 31.07 lbs & total for 6 cases (31.07 x 6 cases = 186.42 lbs) Entitlement value: $71.07/case x 6 cases = $426.42 total

29. Rebates/Refunds • Using invoice from distributor: • Verify that the number of cases received match SFA’s order. • Verify that the price per case on the invoice matches the commercial procurement price obtained by the SFA. • File a rebate with the processor.

30. Rebates/Refunds Number of cases shipped (1) Product Description Price per Case ($43.36)

31. Product Code and Description Pounds per case purchased

32. Rebates/Refunds • Using the processor’s inventory management system (may be an electronic monitoring system or manual monitoring system): • Verify number of cases received listed on invoice(s) matches number of cases shipped listed in system. • Verify amount of pound draw down per case matches rebate form for each product. • Verify that pounds were draw down in inventory management system.

33. Rebates/Refunds Summary End Product Data Schedule (SEPDS) Product Code and Description Draw Down per Case (9.13 lbs)

34. Rebates/Refunds Total Cases (10) Product Code and Description Pounds of draw down per case : 9.13 lbs/case x 10 cases = 91.30 lbs.

35. Rebates/Refunds • Ensure that rebate funds are received from processor.

36. Net Off Invoice (NOI) • Using invoice from distributor: • Verify that the number of cases received match SFA’s order. • Verify that the price per case and the USDA Foods value on the invoice matches the bid price obtained by the SFA. • With NOI there are two line items on the distributor’s invoice: • The commercial bid price (including the distributor’s delivery fee). • Credit for the value of USDA Foods per case.

37. Net Off Invoice (NOI) Product Description Price per case ($51.46) Number of cases (4) Entitlement Value per case ($27.62)

38. Net Off Invoice (NOI) • Using the processor’s inventory management system (may be an electronic monitoring system or manual monitoring system): • Verify number of cases received listed on invoice(s) matches number of cases shipped listed in system. • Verify amount of pound draw down per case matches Summary End Product Data Schedule (SEPDS) for each product. • Verify that pounds were draw down in inventory management system.

39. Net Off Invoice (NOI) Entitlement Value per Case ($27.62/case) Product Code and Description. Bulk USDA Foods Pounds per Case (15.34 lbs per case)

40. Net Off Invoice (NOI) Processor Link. Shipment Summary Screen Product Description and Product Number.

41. Net Off Invoice (NOI) ProcessorLink: Shipment Details Invoice Number and Date No. of cases & total entitlement value (4 x $27.62/case = $110.48) Draw down per case/total for 4 cases 15.34 lbs/case x 4 cases = 61.36 lbs Product Code (41728)

42. MONITORING SUMMARY • Throughout the school year, participating SFAs continue to monitor monthly activity for each designated processor.

43. MONITORING SUMMARY 1. SFAs participating in direct diversion processing will enter bulk pound commitments to designated processors on the annual order survey. 2. After annual order survey closes, DPI balances statewide commitments into full truck loads. Adjustments are made by DPI in the online system. Final, revised pound commitments are available for SFAs to view after mid-May. 3. After July, SFAs should verify all final pound commitments against deposits made by each processor into the processor’s inventory management system. 4. Throughout the school year, SFAs must monitor monthly activity for each designated processor.

44. Monitoring Helpful Tips • If distributor will allow several orders, place all of your monthly direct diversion products on one order. SFA will then have one invoice per month for all direct diversion products, making verification easier. • Electronic inventory management systems: both companies (K-12 and ProcessorLink) offer training to SFAs on their own system.

45. DPI USDA Foods Team • Dino Ante, 608-266-3615 antonio.ante@dpi.wi.gov • Laura Sime, 608-267-9119 laura.sime@dpi.wi.gov • Lynne Slack, 608-266-2596 lynne.slack@dpi.wi.gov • Jim Witecha, 608-267-9283 james.witecha@dpi.wi.gov