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.

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

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

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

Terms and Definitions  Terms and Definitions Handout

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

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

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

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.

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

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

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

Internal Controls  Written policies  Authorized individuals  Monitored by an independent review  Trained employees

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

Activity: Self-Assessment  Self-Assessment Handout  Evaluate your current skills level

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

Menus  Driving force of school nutrition operation  Definition of cycle menus

Activity: Cycle Menu Advantages  Cycle Menu Activities Handout  Advantages of Cycle Menus

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

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

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

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

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

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

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

Forecasting  Past  Present  Future

Activity: Forecasting Number of Servings  Sample Forecasting Number of a Servings Handout

Activity: Extra Servings Scenario  Extra Servings Handout

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

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

Activity: Batch Cooking  Batch Cooking Handout

Portion Control  Production records  Standardized recipes  Nutritional analysis  Age-appropriate portion sizes

Activity: Portion Control Tilapia Garnished with Citrus Sauce  Tilapia Garnished with Citrus Sauce Handout

Controlling Cost and Waste  Procedures to minimize waste  Controlling waste – operational factors and customer acceptability

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

Food Buying Guide

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

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

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.

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

Activity: Purchasing Decision, Broccoli  Purchasing Decision Handout

Product Screening  Not required  Establish procedures

Screening  Paper Screening  Appearance Screening  Taste Screening

Paper Screening  Product label  Description of the product  Nutritional analysis

Appearance Screening  Examines appearance of product  Determines if product appearance is wanted or expected

Appearance Screening - Package  Individually wrapped  Integrity of the product

Taste Screening  Determine criteria in advance  Document customer satisfaction  Screen adults and students

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

Inventory Control  Receiving  Storage  USDA Foods value

Receiving Strategies  Procedures

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

Storage  Proper conditions

Activity: Storage Area Organization  What are typical storage areas?

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

Inventory  Control

Inventory Methods  Perpetual inventory  Physical inventory

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

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

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

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.

Activity: Calculate Cost of Food Used and Inventory Turnover  Calculate Cost of Food Used and Inventory Turnover Handout

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

Expenditures  Food costs  Labor costs  Supply Costs  Purchased services  Transportation  Indirect

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

Ways to Reduce Food Cost  Ways to Lower Food Costs in School Nutrition Programs Handout

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.

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).

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.

Activity: Meal Equivalents  Breakfast Meal Equivalents Handout, Afterschool Snacks Meal Equivalents Handout  Nonprogram School Nutrition Sales Handout

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

Labor Costs  What are ways to control labor costs in school nutrition programs?

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

Scheduling  What are implications of poor scheduling?

Activity: Production Task Schedule  Production task Schedule Example Handout

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

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

Meals Per Labor Hours  Meals Per labor Hours (MPLH) productivity index  Actual hours assigned

Activity: Meals Per Labor Hours  Meals Per Labor Hours Handout

Fraud Prevention  Accounting  Internal Organization  External Organization

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

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

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

Communicating Financial Information  Checklist

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?

Thank You!  Post - Assessment  Evaluations

National Food Service Management Institute