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FINANCIAL MANAGEMENT School Nutrition Program Administrative Review Training Embassy Suites September 9 - 11, 2009 Income Cash Payments Two sources of cash payments: 1. Students 2. Adults Full Pay Student Payment Local Board Approval

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financial management

FINANCIALMANAGEMENT

School Nutrition Program

Administrative Review Training

Embassy Suites

September 9 - 11, 2009

cash payments
Cash Payments

Two sources of cash payments:

1. Students

2. Adults

full pay student payment
Full Pay Student Payment
  • Local Board Approval
  • Highest Price Reported on System Application
  • Recover Average Plate Cost

or

Plate Cost

- Current Commodity Value

- Current Section 4 Reimbursement Rate

= Minimum Full Price Student Charge

reduced student payments
Reduced Student Payments
  • Price cannot exceed Free Reimbursement less Reduced Reimbursement.

BreakfastSNBLunch

$1.46 $1.48 $2.68

- 1.16- 1.18- 2.28

$ .30 $ .30 $ .40

second meal sold to student
Second Meal Sold to Student

$1.75

+ .25

+ .22

$2.22

(round for ease in making change)

  • Paid Student Charge

+

  • Section 4 Rate

+

  • USDA Commodity Rate

(round up)

=

Charge for 2nd meal sold to students

adult payments
Adult Payments

$1.75

+ .25

+ .22

$2.22

(round for ease in making change)

Highest Paid Student Charge

+

Section 4 Rate

+

USDA Commodity Rate (round up)

=

Charge for meal sold to Adult

meals served no payment
Meals Served – No Payment
  • Charged Meals
  • Free Adult Meals
charged meals
Charged Meals

Board approved Charge Policy:

  • Implemented as approved
  • Reconciliation of charges
  • “NO CHARGES ALLOWED” is acceptable.
  • “Bad debts, including losses arising from uncollectible accounts are unallowable.”

(2 CFR 225 Appendix B)

free adult meals
Free Adult Meals

An adult may eat free if:

  • Directly involved in the operation and administration of the SNP.
  • Paid from SNP funds.

or

  • Received written permission from the State SNP Director.
a la carte sales
A la Carte Sales
  • 2 ½ - 3 x cost of product (rule of thumb)
  • Avoid competition with SNP
  • May be costing you money

1. Labor costs

2. Loss of Reimbursement Revenue

3. Loss of Commodity Entitlement

income cont d
Income (cont’d)

Federal Reimbursement

  • Major Source
  • Rates Issued Annually
  • July 1 – June 30
lunch reimbursement rates
Lunch Reimbursement Rates

Meal Type Rates ($) Comment

Paid Lunches 0.25 (Free + Reduced) <60%

Paid Lunches 0.27 (Free + Reduced) >=60%

Free Lunches 2.68 (Free + Reduced) <60%

Free Lunches 2.70 (Free + Reduced) >=60%

Reduced Lunches 2.28 (Free + Reduced) <60%

Reduced Lunches 2.30 (Free + Reduced) >=60%

breakfast reimbursement rates
Breakfast Reimbursement Rates

Paid Breakfasts 0.26

Free Breakfasts 1.46

Reduced Breakfasts 1.16

Free Severe Need Breakfasts 1.74

Reduced Severe Need Breakfasts 1.44

severe need breakfast
Severe Need Breakfast
  • Individual School Statistics
  • April – 2 years prior (April 2008)
  • 40% or greater Free + Reduced Participation at LUNCH
  • Caution – Consolidated claim may have both regular and SNB
  • Check annually.
income cont d16
Income (cont’d)

Interest

  • Any interest earned on SNP funds must be credited to the SNP account and used only for program purposes.
  • This includes SNP funds invested for you by Trustee, etc.
income cont d17
Income (cont’d)

Catering

  • Internal School Uniform Accounting Policy Manual (Section 8, Page 2)
  • Formal Contract with itemized cost
  • No SFA money or USDA Commodity
  • Documentation that payment received covers all costs.
catering contract
Catering Contract
  • Include $ amount to cover all costs
  • Costs are to itemized

Food

Non-Food Supplies

Labor

Fringe Benefits

Utilities

Other

DOCUMENT, DOCUMENT, DOCUMENT!

income cont d19
Income (cont’d)

State Matching

  • Internal School Uniform Accounting Policy Manual (Section 8, Page 4)
  • Used solely in the SNP
  • 10% must be applied to:

1. Employment of certified (endorsed) SNP Supervisor. (100% can be used for this)

2. Employment of cafeteria managers or assistant managers accredited by SNA or working toward accreditation

3. Professional training programs for non-accredited personnel.

internal school uniform accounting policy manual
Internal School Uniform Accounting Policy Manual

http://www.state.tn.us/education/fa/ed331936.htm

cash payment refunds
Cash Payment Refunds
  • Internal School Uniform Accounting Policy Manual (Section 5, page 20)
  • Refunds in excess of $2.00 should be disbursed only by check.
  • Refunds are reductions of revenue, rather than new expenditures.
documentation for cre
Documentation for CRE
  • Cash Receipts Journal
  • Deposit Slips
  • Bank Statements

and/or

Trustee’s Reports

  • Daily Record of Meals Served and Program Income
  • Reimbursement Claims
expenditures24
Expenditures

Other – Supplies, Maintenance, Equipment, Allocated Costs

Figure Expenditures as % of Revenue.

allocated costs
Allocated Costs
  • Costs shared with other programs on a percentage basis
  • How are the cost allocation percentages determined?
  • Document method of allocation

Examples: Audit, copier, bookkeeper salary, etc.

documentation for cre26
Documentation for CRE
  • Cash Disbursements Journal
  • Invoices
  • Statements
  • Cancelled Checks/Warrants
  • Check Registers
  • Payroll Ledgers
  • General Journals
  • Month-end/Year-end Report
operating or fund balance
Operating or Fund Balance
  • Verify with Audit annually
  • Verify with State SNP Website monthly
  • 7 CFR 210.14

The SFA shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its non-profit school food service.

indirect costs
Indirect Costs
  • A cost rate established by TN Dept. of Education
  • The Non-Restricted rate is to be used by all non-restrictive federal programs including Food Service.
  • Cannot be directly assessed (example: utilities)
indirect costs cont d
Indirect Costs (cont’d)
  • Cannot be recovered by LEA unless SNP has an excess balance
  • Recovered amount limited to excess
  • All activities which benefit from the governmental unit’s indirect cost will receive an appropriate allocation of indirect costs. (2CFR 225 Appendix A)
indirect costs cont d30
Indirect Costs (cont’d)
  • Not charged on Food and Equipment
  • No cost may be assigned to a Federal Grant as a direct cost if any similar cost incurred for the same purpose has been allocated to the Federal Grant as an indirect cost.
excess balance
Excess Balance
  • Balance > 3 months average expense
  • State Agency tracks monthly

1. http://snp.state.tn.us

2. Login

3. Set School Year

4. Claim/View Reports

5. Excess Balance

federal regulation regarding excess balance
Federal Regulation Regarding Excess Balance

7 CFR 210.19

In the event that net cash resources exceed 3 months’ average expenditures…the State agency may require:

excess balance plan
Excess Balance Plan
  • Reduce the price children are charged for meals
  • Improve Food Quality
  • Take other action designed to improve non-profit SNP

(Examples: equipment purchases, additional in-services)

allowable costs
Allowable Costs
  • SNP Revenues are to be used only for the operation or improvement of SNP
  • “Income accruing to the SFA in any school, including interest earned on school food authority accounts, shall be used only for school food authority fund programs. Such income shall not be used to purchase land, to acquire or construct buildings.” (Internal School Uniform Accounting Policy Manual (Section 8, Page 2)
cash control
Cash Control?

How do you manage your daily cash?

  • Do you have written cashier instructions?
  • Is cash secure during entire day?
  • Do you accept checks for amount of purchase only or for pre-payments?
  • Do you have a trained back-up cashier?
cash control cont d
Cash Control (cont’d)

Change Account:

“A pre-determined amount of cash may be set aside as a “change account” for the purpose of making change in the cash collecting operation only. A petty cash account is not allowed in the school food authority fund. The change account shall be reconciled each daily. Only the exact predetermined amount of change shall be withheld from each day’s deposit. (NOTE: The change account cannot be used to balance overages and shortages in collection.)

Internal School Uniform Accounting Section 8,pg2

cash control cont d39
Cash Control (cont’d)

“School money should NEVER be taken home by individuals for safekeeping or left at a school overnight unless it is stored in a school safe or vault.”

Internal School Uniform Accounting Section 4, pg 17.

cash control cont d40
Cash Control (cont’d)

Counting Money

  • Desk or table clear of papers
  • Cashier counts money and records
  • Separate (AND INDEPENDENT) 2nd count required
cash control cont d41
Cash Control (cont’d)

Cash Reconciliation

  • Comparison of actual cash to potential cash
  • May be electronic or manual
  • Difference between potential and actual is recorded
  • Signed by cashier
  • Countersigned by person doing 2nd count
  • Actual amount equals deposit amount
cash control cont d42
Cash Control (cont’d)

Deposits

  • Daily, if possible. No later than 3 banking days.
  • Collections should be deposited in the form and amount as collected.
  • Itemized list of checks (manual or electronic)
  • All money collected must be deposited in the next deposit
  • Deposits completed in duplicate
  • Initialed by two people.
documentation for cre43
Documentation for CRE
  • Cash Register Tapes
  • Rosters
  • Automated Transaction Files
  • Day End Totals
  • Lowest Source (covered in Meal Counting and Claiming)
monthly reconciliation
Monthly Reconciliation

Perform a monthly reconciliation of:

  • Bank Statements (check deposits against daily cash reconciliations)
  • Trustee’s Reports
  • Operating Balance on SNP books to State website
  • Bad Checks
record retention
Record Retention

School Nutrition Records must be retained for 3 years or until all applicable audit exceptions are resolved.

documentation for cre47
Documentation for CRE

Additional Financial Records need for the CRE include:

  • Copy of most recent audit
  • Financial status per individual school
  • Charge Policy
  • Meal Pricing Chart
  • A la Carte Pricing Chart
specific cre questions regarding income
Specific CRE Questions Regarding Income
  • If the school has a charge policy, is it being properly implemented?
  • Are only eligible adults receiving free meals?
  • Are SNP funds used only for SNP expenditures?
  • If applicable, are indirect costs being appropriately covered?
specific questions cont d
Specific Questions (cont’d)
  • If applicable, are costs between the SNP and other programs allocated appropriately?
  • Is the operating balance as shown on the Claim for Reimbursement the same as the balance shown on the system’s books?
  • When was the most recent SNP audit? List any discrepancies not corrected.
specific questions cont d50
Specific Questions (cont’d)
  • Are daily receipts verified by more than one person?
  • Is the adult meal price being sufficient to cover the cost of the meal?
  • Are all receipts deposited within three (3) banking days?
  • Is the cash balance reconciled with the bank statement/trustee report monthly?
specific questions cont d51
Specific Questions (cont’d)
  • Is a separate account maintained for food service funds?
  • Has all interest earned on SNP funds been credited to the SNP account?
  • Does the SNP have a contract for all catered events?
  • Is there sufficient documentation that payment received covered all costs for catered events?
web sites
Web Sites
  • http://www.whitehouse/gov/omb

(Office of Management and Budget)

2 CFR Part 225

  • http://www.state.tn.us/education/fa/ed331936,htm

(Internal School Uniform Accounting)

  • http://snp.state.tn.us

(Regulatory Search – CFR)

budget
BUDGET
  • Set Goals
  • Establish a yardstick
  • Broken down by number of serving days
  • Know your “Break-Even” point
accounting system
ACCOUNTING SYSTEM
  • We are a business.

1. Produce a product

2. Provide a service

  • Accurate reports
  • Comparison of current data to previous months or years
profit and loss statements
PROFIT AND LOSS STATEMENTS
  • Broken down by cost center
  • Compare like situations
  • Shared with Managers and staff
  • Spot problem areas (high food costs)
informed managers
INFORMED MANAGERS
  • You won’t change if you don’t know you need to
  • Manager controls Financial Management at the school level – not the Supervisor
informed managers cont d
INFORMED MANAGERS (cont’d)
  • Manager controls Financial Management at the school level – not the Supervisor
  • Manager determines 80% of decisions

1. How much food to order?

2. How much food to prepare?

3. What to do with leftovers?

4. Do we need a substitute or not?

slide59
“In accordance with Federal law and U. S. Department of Agriculture policy, this institution is prohibited from discriminating on the basis of race, color, national origin, sex, age, or disability. To file a compliant of discrimination, write USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, DC 20250-9410 or call (800) 795-3272 or (202)720-6382 (TTY). “USDA is an equal opportunity provider and employer.”