Financial Accountability Lonnie Burt, MS, RD, CD-N Senior Director Hartford Public Schools

Financial Management Requires Fiscal Reporting Systems Key Performance Indicators Cash Handling Procedures Good Communication / Training Your Eye on the Ball

Always About Balance Food Supplies Labor / Benefits Income Expenses Food Supplies Labor / Benefits Equipment Purchases Equipment Repairs Office Supplies Licensing Fees / Technology Bank Courier Education / Training Indirect Costs Federal Reimbursements State Reimbursements Sales to Students and Adults Daycare / Headstart Catering Grants

Tools for Sound Fiscal Management Budget Financial Reporting Systems (POS & Accounting) Income and Expense Statements (site and consolidated) Monthly Inventories Cash Handling Procedures Proper Procurement Key Performance Indicators Customer Acceptable Menus

Budget The budget is the annual plan for what the fund expects to accomplish. Projections for revenue and expenses are made based upon previous year financial information, current market trends, enrollment, and reimbursement rate increases.

Why Use a Budget? When planning for the upcoming year, the budget will be a valuable tool. Is income projections higher than expense projections? If not, where can revenue be increased and expenses decreased. During the budget year, it is helpful to use the budget to compare to actual income and expenses. Are you on track, do you need to make adjustments?

Income and Expense Statements Income & Expense statements show management how the fund has performed for a given period of time. Must be compared, analyzed, and acted upon to be effective.

Income and Expense Statements Comparisons are made to industry standards, prior period of time, other schools, other districts, budget goals. Comparisons should be made using percentages of costs to total revenue. Variances in percentages are easy to spot.

Income and Expense Statements Income and Expense statements should be consolidated and broken down by individual schools. They will point out where problems exist.

Why use an Income and Expense Statement? Throughout the year, it is important to monitor the revenue and expenses to determine financial health of program. It can be compared to budget to determine if on track with projections. Comparing to prior year will show trends upward or downward that may need to be addressed. Using cost as a percentage of revenue relates expenses to revenue. Revenue needs to be higher than expenses to be self-sustaining.

Why use an Income and Expense Statement? Gives enough detail to determine drill down to areas that need to be addressed. By comparing to prior time period, deviations from the trend can be noticed. Monitoring income and expenses on a monthly basis provides time to address issues and recalibrate before it is too late.

Other Tools Monthly Inventory Cash Handling Procedures Calculating monthly allows for better control of food and supplies Used to determine COGS Cash Handling Procedures Who counts the register money – is it blind? Who reconciles the money to the cash reports What are the procedures if cash does not balance Proper Procurement Required by USDA Allows for better money management

Key Performance Indicators Average Daily Participation – ADP Total Meals Served / Number Operating Days Helps to make labor and purchasing decisions / projections Participation goals and objectives Menu decisions Meals Per Labor Hour Measure of productivity ADP + Meal Equivalents / total daily labor hours Acceptable range depends upon type of production – conventional or convenience

Key Performance Indicators Cost as a Percentage of Revenue Operating ratio that relates expenses to revenue Analyzed in food and labor costs to determine if reasonable and consistent with benchmarks and projections Food Cost Percentage Cost of Purchased Food / Total Revenue Industry Average is 40-45% Labor Cost Percentage Payroll, Benefits, Other Related Labor Expenses / Total Revenue

  Burns Burr Capital Prep Classical Jumoke Main Lunch 427 531 451 377 311 Breakfast 202 187 243 162 145 Snack 34 24 303 A la Carte 8 4 91 109 Meal Equivalents: Lunch (1) Breakfast (.67) 135 126 163 97 Snack (.33) 11 100 A la Carte (3.39) 2 1 27 32 total Meal Equivalents 576 666 741 518 408 Divided by: total daily labor hours 29.74 26.45 35.40 35.95 9.95 Equals: Meals Per Man Hour 19 25 21 14 41

School Manager Responsibilities Monitor ADP Reconcile Daily A la Carte Food Sales Cash Handling Procedures Accurate Production Records Proper Ordering/Inventory Production Techniques Presentation

Where to Start Determine what you already do and what you want to start doing. Business Department - who is compiling your invoices for payment, payroll, and your deposits. Who has this information? How can you get it? Ask your colleagues what are they using for forms, software, reports. Learn how to use Excel! Get training on any topic that you are not comfortable with.

Take Home Moment Good financial management is data driven. Develop a budget. Use your profit and loss statement to analyze your financial status on a monthly basis. Use Key Performance Indicators that can help you manage your program. Look at labor costs and start to develop a short and long-term cost savings plan. Income is dependent upon customer satisfaction.

ICN Tools & Resources Financial Management Training: http://www.theicn.org/ResourceOverview.aspx?ID=63 Team Up - Financial Management Webinars & Tools http://www.theicn.org/ResourceOverview.aspx?ID=527 Inventory: http://www.theicn.org/ResourceOverview.aspx?ID=431 Procurement: http://www.theicn.org/ResourceOverview.aspx?ID=475