Solutions for Unpaid Meal Charges June 13th, 2018

Learning Objectives FTK- Danielle Philanthropy- Julie Regulations- Lyza Learning Objectives

Objective 1: Feed The Kids! Do you serve “Alternative Meals”? A solid Charge Policy is important ADVOCATE!!! Senate Bill 13, passed and signed into law

Objective 2: Philanthropy Do you have a foundation in your district? Can you identify a 501c3 to receive donations and provide letter of tax credit? Who tells your story?

Reduced High School student eats all year for $67.20 $15 buys one week 2018 Senior Class owed $1600 Market Fundraising

Procedure

Step 1 Step 2 Step 3 Step 4 Step 5 Community donates to the Success Foundation, a private 501c3 that raises money solely to aid Greeley-Evans SD6 Finance Dept. recognizes exact amount from Success Foundation account into the General Fund using code 1920 Reports are sent to Finance and Nutrition Directors and Foundation for reference Step 1 Step 2 Step 3 Step 4 Step 5 Success Foundation raises enough money to cover the delinquent lunch debt of all seniors unable to pay by the last Friday of the school year Nutrition Service staff will run reports on debt owed by seniors on last Friday of the school year and apply fund to balance those account

Objective 3: Regulations Do you have a charge policy? Delinquent Debt vs. Bad Debt (collectible vs. uncollectible) Donations Dos and Don’ts-Handout

Unpaid Meal Charge Policy/Procedure July 1, 2017 – SP 46-2016 Communication requirements Delinquent and Bad Debt treatment included in your policy/procedure? CASB templates What I have seen so far: No charge Charge up to a limit Charge up to a limit, then “alternate” meal offered (reimbursable and non-reimbursable) Charge up to limit, then receive reimbursable meal (covered by general fund) Unlimited charged meals (covered by general fund) Reimbursable “alternate” meals (offered once student’s account is negative) No charge – lower cost items usually included, transaction on student account as zero, food service fund absorbs cost of meal, claim and receive federal reimbursement Lower price – lower cost items usually included, transaction on student account as lower price to cover food cost, food service fund absorbs other costs, claim and receive federal reimbursement Sack Lunch – discreet method can be pick up or deliver, or offer sack lunch as a daily selection to all students with a lower cost main entrée (PB&J) included all other components still offered, can be at no charge or at a lower cost, claim and receive federal reimbursement Non-reimbursable “alternate” meals (offered once student’s account is negative) At no charge, covered by general fund, do not have to follow meal patterns, subject to smart snack requirements and revenue for nonprogram foods, can not claim and collect federal reimbursement

Debt and Donations Unpaid Meal Charges - The outstanding amount due to the food service fund for meals already provided to the student. These charges must be reported as accounts receivable in the food service fund. These charges should be tracked as negative balances on the students’ accounts in the point of sale (POS). Delinquent Debt - Overdue balances with active, reasonable efforts being made to collect the outstanding amount due. A debt owed (accounts receivable) to the nonprofit food service account is an asset. Uncollectable Debt and Bad Debt - “Uncollectable debt” is overdue balances no longer considered collectable due to efforts determined as unproductive or too costly. This uncollectable debt must be reclassified by local officials as “bad debt” in order to be written off and replenished by the general fund as an operating loss. Uncollectable debt and bad debt - (credit the accounts receivable and debit another asset, such as cash or due from account within Fund 21)

Debt and Donations If you received donated funds for unpaid meal, they must be used to offset bad debt. The district must deposit donated funds outside of the food service fund (using source code 1920). The amount of bad debt covered by donated funds must be removed from the balance sheet of the food service fund. A credit must then be made to accounts receivable and a debit to the cash or due from account. The bad debt must be reported in the general fund or other grant fund, with a debit (using object code 0890) and a credit to cash or due to account. All nonfederal funds that are used to cover unallowable costs, including bad debt, must be maintained in a separate account, outside of Fund 21 - food service fund. The food service fund must not be used to cover costs related to the bad debt, such as continued legal and collection costs. The use of donated funds should be fair and consistent (not student specific)

Dos and Don’ts

Dos and Don’ts

Homework Review Your Charge Policy Find A Local Non-profit Communicate with your Principals