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FINANCIAL MANAGEMENT

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  1. FINANCIALMANAGEMENT School Nutrition Program Administrative Review Training Embassy Suites September 9 - 11, 2009

  2. Income

  3. Cash Payments Two sources of cash payments: 1. Students 2. Adults

  4. 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

  5. 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

  6. 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

  7. 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

  8. Meals Served – No Payment • Charged Meals • Free Adult Meals

  9. 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)

  10. 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.

  11. 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

  12. Income (cont’d) Federal Reimbursement • Major Source • Rates Issued Annually • July 1 – June 30

  13. 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%

  14. 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

  15. 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.

  16. 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.

  17. 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.

  18. Catering Contract • Include $ amount to cover all costs • Costs are to itemized Food Non-Food Supplies Labor Fringe Benefits Utilities Other DOCUMENT, DOCUMENT, DOCUMENT!

  19. 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.

  20. Internal School Uniform Accounting Policy Manual http://www.state.tn.us/education/fa/ed331936.htm

  21. 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.

  22. 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

  23. Expenditures

  24. Expenditures Other – Supplies, Maintenance, Equipment, Allocated Costs Figure Expenditures as % of Revenue.

  25. 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.

  26. Documentation for CRE • Cash Disbursements Journal • Invoices • Statements • Cancelled Checks/Warrants • Check Registers • Payroll Ledgers • General Journals • Month-end/Year-end Report

  27. 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.

  28. 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)

  29. 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)

  30. 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.

  31. 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

  32. 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:

  33. 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)

  34. Are Net Cash Resources Adequate?

  35. 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)

  36. ACCOUNTABILITY

  37. 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?

  38. 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

  39. 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.

  40. Cash Control (cont’d) Counting Money • Desk or table clear of papers • Cashier counts money and records • Separate (AND INDEPENDENT) 2nd count required

  41. 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

  42. 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.

  43. Documentation for CRE • Cash Register Tapes • Rosters • Automated Transaction Files • Day End Totals • Lowest Source (covered in Meal Counting and Claiming)

  44. ACCOUNTABILITY (cont’d)

  45. 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

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

  47. 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

  48. 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?

  49. 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.

  50. 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?