Child Nutrition Financial Management Child Nutrition Programs School

Child Nutrition Financial Management Child Nutrition Programs School Year 2018/2019

CHILD NUTRITION & Oklahoma Cost Accounting System (OCAS) • Child Nutrition Program Fund = 22 Or • General Fund = 11 • Activity Fund = 60

OCAS CODES q. Child Nutrition = Federal Funds q. Project Reporting Code in 700 Series q. Project Reporting Code in 300 Series = State Match, CN Support Employees w/wo Health Benefits q. Project Reporting Code in 000 -299 Series = Local

CHILD NUTRITIION Child Nutrition Funds must be coded by accredited school site code! *ESSA Requirement Exception: Central Eating Site Code: 050

FEDERAL PROGRAM CODE (700) Expenditures and Revenues from Child Nutrition are identified to be Project-specific: q. National School Lunch Program (ASSP and SSO) q. School Breakfast Program q. Special Milk Program q. Fresh Fruit and Vegetable Program Grant q. Equipment Grant q. Child and Adult Care Food Program q. Summer Food Service Program

FEDERAL PROJECT REPORTING CODES q National School Lunch = 763 (includes ASSP and SSO) q School Breakfast = 764 q Special Milk = 765 q Summer Food Service Program = 766 q Professional Standards for CN Employees = 767 q Fresh Fruit and Vegetable Grant Program = 768 q Child and Adult Care Food Program = 769 q Equipment Grant = 791

FEDERAL PROJECT REPORTING CODES (CONT. ) Any salaries of personnel that are part of the Teacher’s Retirement System (TRS) paid from Federal Funds, must also pay State Match to TRS Teachers Retirement System: 700 Series q. Remember: If there is 385 money in Fund 22, you must spend 385 money out of Fund 22

STATE PROJECT REPORTING CODES q. Flex Benefits (Support Staff Without Health) = 332 q. Flex Benefits (Support Staff With Health) = 335 q. State Match ONLY = 385

FOOD SERVICE MANAGEMENT COMPANY (FSMC) q. Food Service Management Companies MUST breakdown each invoice q. Child Nutrition Manual 2018/2019 page C-34 itemized list.

FOOD SERVICE MANAGEMENT COMPANIES AND CODING Every invoice must be broken down: q Student Meals (763 or 764/570) q Food and Milk (3140) q Adult Meals (000/3155/570) q À la Carte (000/3110/570)

LOCAL PROJECT REPORTING CODES Project Reporting = 000 -299

REPORTING CODES Breaking down ONE invoice for all costs

EXPENDITURE WORKSHEET How does a district breakdown how much was spent on EACH of the different Child Nutrition Programs? q. Can Estimate q. Best way is to cost out your meals

EXPENDITURE WORKSHEET (CONT) q. Child Nutrition has developed a tool q. Found in our New Claiming System under “Other Documents” followed by Interactive Documents OCAS Coding Expenditure Worksheet https: //cnp. sde. ok. gov/oknslp/Print. Documents. aspx

BREAKING DOWN LABOR BY BREAKFAST AND LUNCH Direct Labor/Benefits Total Student Lunch Meal Count Total Student Meal Count = Percentage of CN Salaries to code to Lunch (763) Total Student Breakfast Meal Count Total Student Meal Count = Percentage of CN Salaries to code to Breakfast (764)

WHY ALL THIS CODING? q. Maintenance of Child Nutrition Account q. Paid Lunch Equity q. Revenue from Non-Program Food q. Indirect Costs

MAINTENANCE Non-Profit School Food Service (Child Nutrition) Account

MAINTENANCE OF THE CHILD NUTRITION ACCOUNT q. Ensure federal funds are used only for Child Nutrition Program (CNP) operation and improvement q. Surplus funds used strictly for CNP q. Revenues equal or exceed expenditures q. Net cash resources limited to an average three-month operating balance q. Records to document all revenues received and expenditures made

EXCESS FUNDS IN CNP q. Compliance vs. Noncompliance q. All excessive funds must be re-coded from the previous fiscal year into the new fiscal year ü Use the Appropriate Project Reporting Code ü Use Source of Revenue Code = 6110 Program Code = 700

EXPENDITURE VERSUS REVENUE FORMULA *Project Reporting Code 591 represents impact aid funds which are unrestricted, and schools may use at their discretion.

FORMULA FOR CALCULATING AVERAGE THREE-MONTH OPERATING BALANCE *Project Reporting Code 591 represents impact aid funds which are unrestricted, and schools may use at their discretion.

CHILD NUTRITION EXPENDITURES q. Must meet the requirements of 2 CFR § 200 q. Must be reasonable, necessary and allowable q. Must be treated as DIRECT or INDIRECT q. Must have State Agency approval on some 5, 000 or more q. Must be supported by source documents q. Must be reported to OCAS accurately

REVIEW OF ALLOWABLE COSTS q. Review of the district’s OCAS Report for previous year q. Determine whether select expenses are allowable q. Ensure there is accurate and sufficient supporting documentation q. Verify OCAS Report includes all costs charged to Child Nutrition

PROCUREMENT REVIEW • Procurement Process • Vendor Paid List/Summary Report or Expenditures by vendor for previous SY • Documentation: q Solicitations q Evaluations q Contracts q Purchase Orders/Receipts/Invoices

PAID LUNCH EQUITY REQUIREMENTS

PAID LUNCH EQUITY (PLE) q. Requires districts to charge PAID students, on average, the difference between Free/Paid reimbursement rates for lunch q. For 2018 School Year: $2. 92 q. Districts can charge less if they can show non-federal funds subsidized paid student lunches

ALLOWABLE NONFEDERAL SOURCE FUNDS q. Per-meal nonfederal reimbursements for any paid meal (breakfast, lunch, etc. ) q. Funds provided by organizations for any paid meal q. Any portion of State Match that exceeds requirement q. Any proportion attributable to paid meals from direct payments made from school district funds to support school lunch service

UNALLOWABLE NONFEDERAL SOURCE FUNDS q. Any payments provided to support School Breakfast or other CNP q. Any payments provided to support Free or Reduced-Price meals q. Any in-kind contributions converted to direct cash expenditures

PAID LUNCH EQUITY (CONT. ) q. Formula for determining if a district has any Nonfederal Source Funds to use for subsidizing q. Interactive form on e. Claims under Other Documents

PAID LUNCH EQUITY (CONT. ) • School Districts Exempt from PLE q Non-pricing Districts q Provision / CEP • Districts NOT Exempt: q Must Complete PLE Tool each spring q Must raise prices according to PLE Tool or show subsidy

EXAMPLE OF CODING IF STUDENTS ARE NOT CHARGED APPROPRIATELY q. If NOT charging Paid Students enough AND General Fund is paying for meals for Child Nutrition: 1. Code Student Meals to = Fund 11 2. Project Reporting Code = 000 3. Function Code = 3150

REVENUE FROM NON-PROGRAM FOODS REVENUE REQUIREMENTS

DEFINITION OF NON-PROGRAM FOODS q. Foods and beverages purchased from Child Nutrition Food Service Account and sold NOT as a part of the reimbursable meal q. Includes à la carte items, adult meals, catering, contract, vending--anything not on a tray

REVENUE FROM NON-PROGRAM FOODS q. Ensure that all foods/beverages sold outside reimbursable meals are priced to generate revenue that, at a minimum, will equal the cost of the foods and beverages purchased q. Must determine total food costs and what proportion of that total is non-program food

CALCULATING NON-PROGRAM FOOD EXPENDITURES/REVENUE q. Total food costs q. Food costs of non-program meals q. Revenue from non-program foods q. Total revenue

NON-PROGRAM FOOD REPORT FORMULA *Project Reporting Code 591 represents impact aid funds which are unrestricted, and schools may use at their discretion.

NON-PROGRAM FOOD REPORT • Must Show: q. Percentage of expenditures for À la Carte, Catering, Adult Meals, Contract Meals, & Vended Foods q. Percentage must be less than or equal to the percentage of revenue for these items

EXAMPLES OF CODING NON-PROGRAM FOODS If the General Fund is paying Adult/À la Carte: • Code À la Carte to: q General Fund = 11 q Project Reporting Fund = 000 -299 q Function Code = 3110

ITEMS TO KEEP IN MIND q. Charge at minimum free rate of reimbursement for adult/contract meals (Lunch: Add commodities and additional 6¢ incentive $3. 71) q. Charge at minimum what à la carte/catered/ vending food cost OR q. Purchase these foods from another fund – NOT the Child Nutrition Account (Example: General Fund is buying non program foods? )

INDIRECT COSTS

ALLOWABLE COSTS REQUIREMENTS q. Reasonable q. Necessary q. Allowable

EXPENDITURE IS REASONABLE q. Conforms with federal law/regulations/ program terms q. Legal under state/local law q. Not extreme, not excessive

EXPENDITURE IS NECESSARY q. Consistently treated as Direct or Indirect q. Net of applicable credits q. Indispensable/essential

EXPENDITURE IS ALLOWABLE q. Capable of being set apart or apportioned for a specific purpose q. Determined in accordance with Government Accounting Standards (GASB) q. Adequately documented

COSTS ALLOWABLE UNALLOWABLE • • Items unrelated to Child Nutrition • Alcoholic beverages • Entertainment • Costs of general government, lobbying • Uncollected Meal Charges Salaries/Benefits Job Related Travel Training Food / Beverage Costs Food Service Supplies Equipment Procurement Plan followed

CAPITAL EXPENDITURES • Defined as having an acquisition cost of $5, 000 or more • Must have State Agency approval q Example: Equipment; building renovation • Not allowed to buy land/buildings or construct buildings

State Agency Approved List • Floor mixers • Oven—convection or conventional • Range/stove • Griddle • Steamer • Refrigerator/cooler (walk-in or reach-in) • Freezer • Warming/cooling table • Braising pan/tilting skillet • Combination oven/steamer • Gas range • Food slicer • Dish machine • Refrigerated display cases • Kiosk or mobile food carts

State Agency Approved List • Steam table • Serving lines • Transport carts • Buffalo chopper/vertical cutter • Hot water tank • Booster for dish washer • Proofer • Warming cart • Vent hoods • Steam kettle • Grease traps • Milk boxes • Refrigerated salad bars

INDIRECT COSTS VS. DIRECT COSTS • Indirect: q. Incurred for benefit of multiple programs, functions, or other cost objectives q. Not really identified • Direct: q. Incurred specifically for a program or other cost objective q. Clearly identified

EXAMPLES DIRECT COSTS • • • INDIRECT COSTS • Salaries/Benefits • Travel • Training • Food / Beverage Costs • Food Service Supplies • • Food Service • Equipment Payroll Services Human Resources Workers’ Comp Electricity Gas Trash Phone IT Services

Interest Codes – Sources of Revenue q. Interest on Earnings = 1310 q. Interest on Taxes = 1350

AUDIT FINDINGS

AUDIT FINDINGS q. No segregation of duties whenever money is collected and deposited q. Expenditures exceed revenue received for specific OCAS codes

AUDIT FINDINGS (CONT. ) q. Federal Matching requirement for Teacher’s Retirement was not met q. Total revenues received under 700 series Project Reporting Codes were not expended -- this should NOT be a finding

AUDIT FINDINGS (CONT. ) q. Invoices dated before Purchase Order issued q. Invoices not signed and dated q. Deposits not made on a regular basis

THINGS TO REMEMBER • Child Nutrition monies CANNOT pay for: q Adult meals q À la Carte items, unless total cost is recovered q PAID student lunches if charges for lunches are less than the difference between the FREE reimbursement rate and the PAID rate • If General Fund is paying for the above items, use codes under Project Reporting Code 000

THINGS TO REMEMBER (CONT. ) At-Risk Afterschool Meals Program Coding q. CACFP Project Reporting Code = 769 q. Revenue Code = 4750

CHILD NUTRITION FINANCIAL MANAGEMENT QUESTIONS? Sherri Assaleh, Administrative Coordinator Child Nutrition Programs 405 -522 -5040 This institution is an equal opportunity provider.