Financial Management: A Course for School Nutrition Managers

Pre - Assessment  Place an identifier at the top of the page.  You will use the same identifier when you complete the Post Assessment.  You do not need to place your name on the Assessment. Financial Management for Managers

Activity: Managers Need To Know  What are things school nutrition managers need to know regarding financial management? Financial Management for Managers

Objectives  Assess competencies, knowledge, and skills of financial management  Examine the advantages of cycle menus  Recognize the importance of standardized recipes and the financial benefit of USDA Foods  Recognize key information when forecasting menu item usage  Calculate the cost of menu items  Identify purchasing controls  Identify inventory controls Financial Management for Managers

Objectives, Continued  Identify ways to control labor costs  Calculate Full-Time Equivalent (FTE)  Calculate Meals Per Labor Hour (MPLH)  Implement processes and procedures that minimize financial risk  Develop and use tools to facilitate the communication of financial data and information  Recall the benefits of financial information as it relates to your school nutrition program Financial Management for Managers

Terms and Definitions  Terms and Definitions Handout Financial Management for Managers

Importance of Financial Management  Changing federal regulations  Increasing program cost  Growing demands Financial Management for Managers

Nonprofit School Nutrition Program Fund  Flow of school nutrition program funds  Requirements for establishing a nonprofit school nutrition program account  Program revenue requirements Financial Management for Managers

Office of Management and Budget (OMB)  Terms and conditions  Fundamental guidelines  Financial integrity of SNP Financial Management for Managers

School Nutrition Program Fund  The OMB cost circulars outline cost principles which ensure that taxpayer’s resources are appropriately used to carry out the Federal programs as the Federal agencies are responsible for the stewardship of these resources. Financial Management for Managers

School Nutrition Fund Flow United States Department of Agriculture State Agency (SA) School Food Authority (SFA) Financial Management for Managers

Budget-Manager’s Role  Participate in preparation and review process  Keep budget on file  Evaluate income and expenditures  Amend as necessary Financial Management for Managers

Financial Management Practices  Indicators are analyzed regularly  Prices based on established criteria  Financial records are cross-checked  Compare expenditures to revenues  Participation is analyzed monthly Financial Management for Managers

Internal Controls  Written policies  Authorized individuals  Monitored by an independent review  Trained employees Financial Management for Managers

Financial Management Skills  Competencies, Knowledge, and Skill Statements for District-Level School Nutrition Professionals in the 21st Century Financial Management for Managers

Activity: Self-Assessment  Self-Assessment Handout  Evaluate your current skills level Financial Management for Managers

Activity: Financially Sound School Nutrition Program  What purchasing tools and processes contribute to a financially sound nutrition program? Financial Management for Managers

Menus  Driving force of school nutrition operation  Definition of cycle menus Financial Management for Managers

Activity: Cycle Menu Advantages  Cycle Menu Activities Handout  Advantages of Cycle Menus Financial Management for Managers

Stock-Keeping Units (SKUs)  Multiple uses for the same product  Example: each flavor of juice has a different SKU  Best practice - reduce SKUs Financial Management for Managers

Standardized Recipes  Tried, adapted, and retried several times  Recipe produces the same good results and yield every time  Specific quantity for each ingredient and portion size Financial Management for Managers

Activity: Importance of Standardized Recipes  Take about 10 minutes to work together at your tables and list the advantages of using standardized recipes. Financial Management for Managers

USDA Foods  Meet meal pattern requirements  Coincide with the principles in the Dietary Guidelines for Americans  Add variety to the school menu  Provide cost savings to the SNP Financial Management for Managers

USDA Foods Value  Financial Benefits of Using USDA Foods: BBQ Pulled Pork Example Handout Financial Management for Managers

Food Production Records  Required  Demonstrates required food components  Lists menu items offered and served  Used to document reimbursable meals  Evaluate how menu items contributed to meeting nutrition standards  Keep for three years plus the current year Financial Management for Managers

Production Record—Value  Used to forecast product estimates  Provides historical data (forecasting)  Identifies excessive labor  Identifies potential waste  Identifies unfavorable items Financial Management for Managers

Forecasting  Past  Present  Future Financial Management for Managers

Activity: Forecasting Number of Servings  Sample Forecasting Number of a Servings Handout Financial Management for Managers

Activity: Extra Servings Scenario  Extra Servings Handout Financial Management for Managers

Activity: Financial Control in Food Preparation  Work together at your tables and make a list of ways to enhance financial control during food preparation. Financial Management for Managers

Batch Cooking  Batch cooking and “just-in-time” (JIT) cooking used interchangeably  Small quantities maintain higher quality  Amount prepared not to exceed servings needed in established time (15–30 minutes)  Takes place continuously throughout the meal service Financial Management for Managers

Activity: Batch Cooking  Batch Cooking Handout Financial Management for Managers

Portion Control  Production records  Standardized recipes  Nutritional analysis  Age-appropriate portion sizes Financial Management for Managers

Activity: Portion Control Tilapia Garnished with Citrus Sauce  Tilapia Garnished with Citrus Sauce Handout Financial Management for Managers

Controlling Cost and Waste  Procedures to minimize waste  Controlling waste – operational factors and customer acceptability Financial Management for Managers

Activity: Controlling Waste  Work together at your tables and list ways to control waste. Financial Management for Managers

Food Buying Guide Financial Management for Managers

Food Buying Guide Information  Contains both specific food product information and general operational information  Provides the yields, or the amount of servings obtained in a purchased unit of different products such as fruits, vegetables, grains, meats/meat alternates, and dairy products Financial Management for Managers

Food Guide Buying Calculator  A tool to help calculate quantity of food to purchase  Individual calculators for each of the 6 food groups  Financial Management for Managers

As Purchased (AP) and Edible Portion (EP)  AP refers to the weight of the product as it exists when purchased.  EP refers to the part of the product that can be consumed.  AP weight is greater than EP weight. Financial Management for Managers

Calculate the Cost of Menu Item  Meet the needs of the recipe  Reduce waste  Determine product loss  Determine preparation Financial Management for Managers

Activity: Purchasing Decision, Broccoli  Purchasing Decision Handout Financial Management for Managers

Product Screening  Not required  Establish procedures Financial Management for Managers

Screening  Paper Screening  Appearance Screening  Taste Screening Financial Management for Managers

Paper Screening  Product label  Description of the product  Nutritional analysis Financial Management for Managers

Appearance Screening  Examines appearance of product  Determines if product appearance is wanted or expected Financial Management for Managers

Appearance Screening - Package  Individually wrapped  Integrity of the product Financial Management for Managers

Taste Screening  Determine criteria in advance  Document customer satisfaction  Screen adults and students Financial Management for Managers

Activity: Financial Advantages of Product Screening  What are the financial advantages of product screening? Financial Management for Managers

Inventory Control  Receiving  Storage  USDA Foods value Financial Management for Managers

Receiving Strategies  Procedures Financial Management for Managers

Activity: Best Practice Receiving  Work as a team and identify several best practices receiving strategies. Financial Management for Managers

Storage  Proper conditions Financial Management for Managers

Activity: Storage Area Organization  What are typical storage areas? Financial Management for Managers

Activity: Dry Storage  List categories you might use to group foods in dry storage.  Storage Area Handout Financial Management for Managers

Inventory  Control Financial Management for Managers

Inventory Methods  Perpetual inventory  Physical inventory Financial Management for Managers

USDA Foods and Commercial Inventory  Value of USDA Foods  Single inventory concept  Inventory Handout  Perpetual Inventory Control Example Form  Physical Inventory Example Handout Financial Management for Managers

Value of Inventory  Purchase price = invoice price  Replacement cost = most recent price paid for the product  Weighted average price = average price paid for each product in inventory Financial Management for Managers

Inventory Turnover  Greater the turnover the more efficient the operation  Items are available  Reducing risk of theft  Reducing risk of waste Financial Management for Managers

Food Cost  Follow standard operating procedures.  Maintain the correct inventory levels.  Have needed product on hand.  Prevent the need for more expensive substitution.  Ensure food is used in a timely manner. Financial Management for Managers

Activity: Calculate Cost of Food Used and Inventory Turnover  Calculate Cost of Food Used and Inventory Turnover Handout Financial Management for Managers

Par Stock Levels  Predetermined inventory quantity for food item  Serves as in indicator to reorder the product Financial Management for Managers

Expenditures  Food costs  Labor costs  Supply Costs  Purchased services  Transportation  Indirect Financial Management for Managers

Food Costs  Within guidelines  Ascertain sufficient funds to pay expenditures  Establish the cost for each meal  Prevent waste and food theft Financial Management for Managers

Ways to Reduce Food Cost  Ways to Lower Food Costs in School Nutrition Programs Handout Financial Management for Managers

Meal Equivalents  USDA does not prescribe one method to calculate meal equivalents.  School meals must be converted to a standard.  Nonprogram food sales are converted to lunch standard.  Calculate meal equivalents based on full cost of reimbursable lunch. Financial Management for Managers

Equates Meals to a Standard  A student reimbursable lunch is the standard unit of measurement most often used.  Counting meal and food sales other than lunch is not clear-cut.  Meal equivalents are used for determining per meal cost, productivity ratios, and Meals Per labor Hours (MPLH). Financial Management for Managers

Meal Cost Meal Equivalents Calculations  Convert different types of meals and nonprogram revenues to numbers of meals equivalents served.  Breakfast, lunch, snacks, and nonprogram food sales such as a la carte must be converted.  Check with state agency for guidance. Financial Management for Managers

Activity: Meal Equivalents  Breakfast Meal Equivalents Handout, Afterschool Snacks Meal Equivalents Handout  Nonprogram School Nutrition Sales Handout Financial Management for Managers

Per Meal Costs  Meal cost as a benchmark  Essential to good financial analysis of SNP  Determine on a regular basis  Per Meal Cost Calculation Handout Financial Management for Managers

Labor Costs  What are ways to control labor costs in school nutrition programs? Financial Management for Managers

Staffing  Determination of appropriate number of workers needed for work to be accomplished  Established guidelines essential  Impacts financial management Financial Management for Managers

Scheduling  What are implications of poor scheduling? Financial Management for Managers

Activity: Production Task Schedule  Production task Schedule Example Handout Financial Management for Managers

Full-Time Equivalent (FTE)  1.0 = one full-time employee  Holiday, sick leave, vacation, or other time off not considered FTE Financial Management for Managers

Activity: FTE Calculations  Number of employees x hours worked per day  Total hours per week x number of days  Hours per week ÷ 40 hours per week Financial Management for Managers

Meals Per Labor Hours  Meals Per labor Hours (MPLH) productivity index  Actual hours assigned Financial Management for Managers

Activity: Meals Per Labor Hours  Meals Per Labor Hours Handout Financial Management for Managers

Fraud Prevention  Accounting  Internal Organization  External Organization Financial Management for Managers

Internal Controls  Compliance  Cash handling  Deposits  Funds for allowable cost  Appropriate accounting methods  Monitoring, authorizing, and recording Financial Management for Managers

Activity: Cash Handling Practices  What are some procedures to prevent fraud or theft?  Cash Handling Procedures-Good Practices Handout Financial Management for Managers

Activity: Customer and Employee Theft  Work in small teams and discuss ways to prevent customer and employee theft.  Theft Prevention Measures Handout Financial Management for Managers

Communicating Financial Information  Checklist Financial Management for Managers

Activity: Communicating with the School Nutrition Director  What operational concerns directly related to the financial impact of your program should be communicated to your director? Financial Management for Managers

Thank You!  Post - Assessment  Evaluations Financial Management for Managers

National Food Service Management Institute Financial Management for Managers