Transcript SFFP – Indirect Cost
Child Nutrition Reauthorization
The Effects on Your Bottom Line
Texas Department of Agriculture Food and Nutrition
Angela Olige
Chief Administrator
Presentation Overview
• Introduction • Reauthorization Summary • School Food Financing Provisions • Wrap-Up and Final Q&A
Nutrition Quality Impact
• Enhances school nutrition quality • Performance based increase (Sec. 201) • Coincides with new Nutrition Standards for NSLP/SBP • Expands oversight for national nutrition standards (Sec. 208) • • • • $5 Million funding for farm-to-school programs (Sec. 143) Strengthens local wellness policy (Sec. 204 & 209) Milk Options (Sec. 202) Water availability (Sec. 203)
Nutrition Quality Impact
•
Bottom Line Impact
• • • Revenue • General Fund (GF) & Food Service Account(FSA) Cost • • Food Staffing Cost Infrastructure
Grant Opportunities and Operational Changes
• Grant Expansion of School Breakfast P rograms (Sec. 105) • Improves Direct Certification (Sec. 101 -103) • Supports Paperless Universal Meal Service (Sec. 104 -105) • Full use of federal funds in state agencies (Sec. 361) • Changes social security number requirement (Sec. 301)
Grant Opportunities and Operational Changes
•
Bottom Line Impact
• • • • Revenue Staff Procedures Forms
School Food Financing Provisions (SFFP)
• Equitable • • Meal Price Revenue Generation • Allowable • • Expenses Cost allocation
SFFP – Meal Equity
• • •
Equity in School Lunch Pricing
(Sec. 205) Intent • Ensure equitable lunch pricing structure Paid Lunch Defined • Reimbursable meal served to students who are not certified to receive free or reduced - price meals Requirements • • • Annual review & meal adjustment as applicable Allowable exceptions Collection and publishing of prices
SFFP – Meal Equity
cont’d
• SY 2010-2011 lunch price impact • • • Prices between $1.60 – $2.40 increase the meal average price by $0.05
• Schools that currently charge less than $1.60
required to gradually increase their prices over time until requirement is met • Paid Lunch Equity Tool • • www.fns.usda.gov/cnd/Governance/Legislation/CNR_2010.
htm www.squaremeals.org
*CNR – Child Nutrition Reauthorization
SFFP – Meal Equity
cont’d
• Exceptions • • • How can I not raise prices?
May I lower prices?
• • Both can be accomplished with funding from non-federal sources Must equal the difference between the average price required and the average price charged Can not use revenue from sale of foods sold in competition with meals served as reimbursable school meals.
SFFP – Meal Equity
cont’d
• What if my bottom line is already black?
• • Balance of 3-Months worth of operating expenses allowed 7 CFR 210.19(a)(2) • What if my bottom line is over the allowed balance • • • • • Upgrade equipment Prior approval required from TDA for all capital expenditures $5,000 Improve Quality of Meals Increase Nutrition Education Increase Staff Training
SFFP – Meal Equity
cont’d
• Bottom Line Impact • • • Revenue (GF) & (FSA) Participation Board Approvals
SFFP – Revenue Equity
Equity in Non-program Food Revenue
(Sec. 206) • Intent • To ensure the overall revenue from non-program foods meets or exceeds the cost of obtaining these foods • Non-program revenue defined • Revenue from food sold outside of reimbursable school meals
SFFP – Revenue Equity
cont’d
• • • Non-program food purchased for the school food service account must have • • • All revenue generated from the sale of the food purchased credited to the school food service account Must generate revenue at least equal to their cost. • Includes a la carte, snack bar, catering, and vending Must determine food cost “Profit sharing” • No longer allowed Effective Implementation • July 1, 2011
SFFP – Revenue Equity
cont’d
• Bottom Line Impact • • • • Revenue (GF/FSA) Participation Procurement procedures Operational procedure
SFFP – Allowable Costs
•
Allowable cost ( 2 CFR 225)
Some Basic Guidelines • • Be necessary and reasonable Be allocable to Federal awards • Be authorized or not prohibited under State or local laws or regulations • • Conform to any limitation or exclusions in 2 CFR Be consistent with policies, regulation and procedures that apply uniformly to both federal award and other activities • Be accorded consistent treatment
SFFP – Indirect Cost
• Requirements of USDA per CNR • Must issue guidance for indirect costs • • Defines proper classification of costs Discussion on the treatment of certain typical costs for school meal programs • Must conduct an indirect cost study • Assess the extent that schools are paying indirect costs • • • Allocation and methodology Impact on to school food service account Types and amounts charged and recovered by districts • • Consistency with requirements for allocation Costs that could be charged but are not • Issue additional guidance as identified
SFFP – Indirect Cost
cont’d
Indirect Cost Guidance
( Sec 307) • • Intent • To ensure reasonable costing principles are applied consistently over the organization receiving federal funds Definitions • • Indirect costs are incurred for the benefit of multiple programs, functions, or other cost objectives.
Direct costs are incurred specifically for a program or cost objective.
SFFP – Indirect Cost
cont’d
• Guidance provides definitions for both direct and indirect costs, including • • Proper classification of costs Discussion on the treatment of certain typical costs in the NSLP and SBP
SFFP – Indirect Cost
cont’d
• Guidance provides criteria that will aid in determining allowable costs • Appropriate rate usage • • TEA Financial Accountability Resource Guide (FAR) • Supplant versus Supplement Clause in Grant • • Determines the type of indirect cost rate NSLP and SBP have no such clause therefore • Unrestricted rate utilized http://www.tea.state.tx.us/index4.aspx?id=1222
SFFP – Indirect Cost
cont’d
• Cost application • Cost may be direct or indirect but can not be both • Cost Examples • These examples are not meant to imply this is the only way to classify the costs listed • • • Indirect Cost Utilities Financial Services Procurement • • • • • Direct Cost Compensation Materials Equipment Travel Dumpster
SFFP – Indirect Cost
cont’d
• Bottom Line Impact • • • • Revenue (GR/FSA) Accounting procedures Operational procedures Cost allocation plan assessment
SFFP –Bad Debt
• 2 CFR 225 Guidance • Bad debts, including losses (whether actual or estimated) arising from uncollectable accounts and other claims, related collection costs, and related legal costs are unallowable.
• Accounting Procedure • • Bad debts may not be carried forward to the next fiscal year. The school food service account must be made whole
SFFP –Bad Debt
• Examples: Bad debt for school food service accounts • • Student meal charges Negative cash balances • How should food service handle bad debt?
• • Student meal charges • Becomes an account receivable (AR) in the general fund • General fund must transfer cash equal to the total AR.
Negative balances at year end in the cash account • General fund must bring cash accounts to zero
SFFP –Bad Debt
cont’d
• What about loans between GF and SFA • • • Allowable if executed properly May not be retroactive May not cross school years • What about positive student meal balances?
• • • • Districts book as deferred revenue ( Per TEA) May not simply offset other student debt Utilize donation policy for non-returning students • Follow CPA Guidance for unclaimed property http://www.window.state.tx.us/up/reporting.html
SFFP –Bad Debt
•
Bottom Line Impact
• • • • Revenue (GR/FSA) Accounting procedures Charge Policy Donation Policy
Partners for Progress
• • Shared Responsibilities • • • • Management oversight Program integrity Compliance Review Staff Training Shared Goals • • Financial viability Quality nutrition
Partners for Progress
•
Bottom Line Impact
• • • • • • Maximize Revenue ( GF/SFA) Mitigate losses Increase Operational Efficiency Enhance Nutritional Quality Increase Student Participation Positive Public Perception
Funding and Discrimination Statement
Our services are provided through the Texas Department of Agriculture’s Food and Nutrition Program funded by the U.S. Department of Agriculture, Food & Nutrition Division. 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 complaint of discrimination, write USDA, Director, Office of Adjudication, 1400 Independence Avenue, SW, Washington, D.C. 20250-9410 or call toll free (866) 632-9992 (Voice). Individuals who are hearing impaired or have speech disabilities may contact USDA through the Federal Relay Service at (800) 877 8339; or (800) 845-6136 (Spanish). USDA is an equal opportunity provider and employer.