1. Procurement: A multi-step process
Menu
Procurement procedures
Forecasting
Selecting the proper procurement method
Developing a solicitation
Advertising the solicitation
Evaluating proposals/offers
Awarding the Contract
Managing the Contract
Procurement is not just the solicitation and awarding of a contract, that ends the procurement. Rather it’s a multistep process that has different phases that need to be handled properly. An effective process ensures that SFA procurement procedures are well thought out, reflect needs, are completed properly in compliance with regulations, and, in the end, are managed properly at the contract award level.
A one-size approach doesn’t work for all SFAs but if you understand the parts of the process you can develop a process that accommodates your SFA. Achieving full and open competition is the goal for every procurement transaction.

2. Procurement Plan Required by regulations
Helps to determine procurement methods to be used
Identifies parties that will address issues raised
Includes a written code of standards of conduct to prohibit conflicts of interest
Procurement procedures play a critical step in the overall process because they determine the type of procurement methods that will be used by the SFA and the type of contracts that will result.
2 CFR requires that SFAs have procurement procedures in place. The procedures provide the specific roadmap for how the SFA is conducting procurement in compliance with regulations.
These procedures include written standards of conduct which help to prevent conflicts of interest, the use of noncompetitive practices, and protests that delay contract award, or worse, require the solicitation process to be terminated, re-written, and re-issued.
Additionally the procedures may address who at the SFA conducts the contract monitoring and how issues will addressed if identified.
All school food authorities need to develop a procurement plan which is a comprehensive plan that clearly defines responsibility and establishes guidelines the SFA and the procurement person within the organization must follow when carrying out their duties.

3. What should I include in my procurement plan?
Definitions
Basic Organizational Concepts
Source Selection
Specifications
Buy American
Minority/Women-Owned Businesses
Conflict of Interest / Code of Conduct policy
The following should be included in your procurement plan.
The procurement plan should clarify terms used in the policy which may need further explanation such as responsive and responsible bidder.
The procurement plan should include basic organizational concepts, such as which people in the organization are responsible for ordering and who approves purchases. A best practice is to establish different financial levels for procurement.
The procurement plan should include source selection which establishes which method of procurement will be used.
Developing good specs ensures your procurement is competitive and not too restrictive, including using the Buy American provision and purchasing from minority or women-owned businesses.
A procurement plan would not be complete without a conflict of interest and code of conduct policy for everyone involved in the procurement process. It documents the steps to take if there is a conflict of interest and the consequences if there is a violation of the policy. The policy should address areas such as:
Gratuities and kickbacks,
Miscellaneous fees which are fees that are not attributable to the purchase and
A Process for violations of the procurement policy

4. Best Practices
Consult your school’s attorney for questions regarding local procurement laws
Always ensure enough time for the entire procurement process
Advertise for bids in the official newspaper(s)or newspapers designated for such purpose
Best practices for procurement include…
Consulting your school’s attorney for questions regarding local procurement laws.
Always ensuring there is enough time for the entire procurement process
And advertising for bids in official newspapers or newspapers designated for such purposes.

5. SFA Procurement Review
Procurement table
SFA staff
Vendor names
Goods/services provided
Total amount paid and number of purchases to vendor
Number of bids received
Procurement Policy/Standards
Code of Conduct
Summary of Expenditures
In-depth review of selected procurements
Review of written procurement procedures
SED will perform procurement reviews in conjunction with the Administrative Review process. SED sent SFAs who are being reviewed this school year, a procurement table to complete. Through the procurement table you will provide SED with names and contact information for all SFA staff responsible for procurement and information on each procurement made in the non-profit foodservice account from the prior school year such as vendor names, goods and services provided, total amounts paid to each vendor, number of purchases from the vendor, and number of bids received. Based on the SFA’s responses, we will ask for more documentation of specific purchases.
You will also be asked to provide SED with your SFA’s procurement policy/standards and Code of Conduct as well as the SFA’s Summary of Expenditures from the previous year. SED will review your written procurement procedures and practices to determine if they conform with federal regulations. So make sure you have a written procurement policy and are following it. Also, make sure you are documenting all procurements.

6. Comprehensive Resource Management
The comprehensive resource management review process is the fiscal section of the administrative review. Let’s discuss the process.

7. Child Nutrition Program Office Child Nutrition Audit Team
Review Cycle
Child Nutrition Program Office
Sends off-site assessment and initiates Administrative Review of schools’ lunch program. Follows up with any findings or corrective action.
School
Submits answers to off-site assessment. Answers are evaluated to see if SFA triggers a Comprehensive Resource Management Review
Child Nutrition Audit Team
Completes Comprehensive Resource Management Review and reports findings or recommended corrective action back to Child Nutrition
The review cycle begins when the Child Nutrition office sends the off-site assessment to school food authorities scheduled for administrative reviews in the current cycle. The school returns the off-site assessment and the responses are entered into a risk assessment tool to determine if there are any potential weaknesses in the nonprofit food service account. The audit team will contact you if we need to clarify your responses or if necessary, to schedule a comprehensive resource management review. Any findings or recommended corrective action will be given to the Child Nutrition program person assigned to your SFA to incorporate into the overall administrative review letter.

8. Overview
There are four sections – Maintenance of the Nonprofit Food Service Account, Paid Lunch Equity, Nonprogram Food Revenue and Indirect Costs
You will be directed to provide data for each section to assist CNP in determining if your school is following and meeting Federal guidelines specific to the maintenance and operation of the NSLP and requirements of the nonprofit school food service account.
The comprehensive resource management section is comprised of four main parts - Maintenance of the Nonprofit Food Service Account, Paid Lunch Equity, Nonprogram Food Revenue and Indirect Costs. The child nutrition auditors will be focusing on these parts in detail during a review, and you will be directed to provide data for each section to assist the CNP in determining if your school is following and meeting Federal guidelines specific to the maintenance and operation of the NSLP and requirements of the nonprofit school food service account.

9. Overview
Two of the sections – Paid Lunch Equity (PLE) and Nonprogram Food Revenue - require a Microsoft Excel file referred to as a “tool” to be utilized in assisting you with answering questions on the off-site assessment.
When your off-site assessment is reviewed by CNP’s audit staff, we may request you send us your completed PLE tool and/or Nonprogram Food Revenue tool to support any findings or questioned costs.
Two of the sections – Paid Lunch Equity (PLE) and Nonprogram Food Revenue - require a Microsoft Excel file referred to as a “tool” to be utilized in assisting you with answering questions on the off-site assessment.
When your off-site assessment is reviewed by CNP’s audit staff, we may request you send us your completed PLE tool and/or Nonprogram Food Revenue tool to support any findings or questioned costs.

10. Pre-Review Information
If the CNP’s audit staff conduct a comprehensive resource management review, the school will most likely be asked to respond to specific questions regarding:
Revenues and expenditures in the nonprofit food service account for the last closed out school year or fiscal year
A general overview of the school’s food service program and how it operates.
If the CNP’s audit staff conduct a comprehensive resource management review, the school will most likely be asked to respond to specific questions regarding:
Revenues and expenditures in the nonprofit food service account for the last closed out school year or fiscal year
A general overview of the school’s food service program and how it operates.

11. What will be reviewed?
As previously mentioned, the four sections CNP auditors will be reviewing are:
Maintenance of the Nonprofit Food Service Account
Paid Lunch Equity (PLE) & Tool
Revenue from Nonprogram Foods & Tool
Indirect Costs
What will be reviewed? As previously mentioned, we will be looking at four sections - Maintenance of the Nonprofit Food Service Account, Paid Lunch Equity (PLE) & Tool, Revenue from Nonprogram Foods & Tool and Indirect Costs.

12. Maintenance of the Nonprofit Food Service Account
Maintenance of the Nonprofit Food Service Account is reviewed for compliance with the provisions of CFR 210.2, (a), (b), and (a)(1).
SFA’s should become familiar with the above-referenced Federal regulations as well as their own school’s accounting procedures specific to the maintenance of the Nonprofit Food Service Account.
The maintenance of the nonprofit food service account is reviewed for compliance with the regulations listed here. SFAs should familiarize themselves with these regulations, as well as their own accounting procedures specific to the nonprofit food service account.

13. Nonprofit Food Service Account – Cash Resources
Specific to 7 CFR (b), net cash resources will be reviewed to verify if the school is meeting the requirement to limit its net cash resources to an amount that does not exceed three months of average expenditures.
Excess revenue must be used in support of the operation or improvement of the non-profit food service.
Please provide a clear record of where excess revenues are being utilized.
SFAs cannot carry negative fund balances from year-to-year. Negative fund balances are an indication of bad debt, which is an unallowable expense. Documentation must be provided showing a transfer from another fund, such as the general fund, to the nonprofit food service to cover any losses.
Specific to 7 CFR (b), net cash resources will be reviewed to verify if the school is meeting the requirement to limit its net cash resources to an amount that does not exceed three months of average expenditures.
Excess revenue must be used in support of the operation or improvement of the non-profit food service.
Please provide a clear record of where excess revenues are being utilized.
SFAs cannot carry negative fund balances from year- to-year. Negative fund balances are an indication of bad debt, which is an unallowable expense. Documentation must be provided showing a transfer from another fund, such as the general fund, to the nonprofit food service to cover any losses.

14. Maintenance of the Nonprofit Food Service Account
Net cash resources will be reviewed
Limit net cash resources to three months average expenditures
Excess revenue must be used in support of the operation or improvement of the non-profit food service.
Clear record of where excess revenues are being utilized.
NYS Capital Equipment List
Costs must be reasonable, necessary and allocable.
One component on the resource management review is how SFAs maintain their nonprofit food service account.
An SFA’s net cash resources will be reviewed to verify if the SFA is meeting the requirement to limit its net cash resources to an amount that does not exceed three months of average expenditures.
Excess revenue must be used in support of the operation or improvement of the non-profit food service.
SFAs must provide a clear record of where excess revenues are being utilized.
Remember any purchase of equipment or a capital improvement over $5,000 requires prior approval from Child Nutrition unless the equipment is found on the NYS capital equipment list which can be found on the Child Nutrition Website. All costs related to Child Nutrition programs must be reasonable, necessary and allocable.
Negative balances may not be carried over into the next school year. School districts must pay deficits from the general budget.

15. Indirect Costs
Indirect costs may be charged to a food service account as long as certain requirements and processes are met.
The SFA must have an approved indirect cost rate.
The SFA must make certain the indirect cost charged to the non-profit school food service account is consistent with the approved indirect cost rate to the direct cost base found in the SED approved indirect cost rate agreement.
Application of indirect cost rates must be consistent in all activities of the SFA.
SFAs cannot bill the nonprofit food service account for indirect costs previously paid by the general fund in previous years.
Costs to the food service account must be consistently treated as direct or indirect without double dipping.
Indirect costs may be charged to a food service account as long as certain requirements and processes are met.
The SFA must have an approved indirect cost rate agreement on file with SED in order to apply an indirect cost rate.
The SFA must make certain the indirect cost charged to the non-profit school food service account is consistent with the approved indirect cost rate to the direct cost base found in the SED approved indirect cost rate agreement.
Application of indirect cost rates must be consistent in all activities of the SFA.
SFAs cannot bill the nonprofit food service account for indirect costs previously paid by the general fund in previous years.
Costs to the food service account must be consistently treated as direct or indirect without double dipping.

16. Indirect Costs – CNP Review
You will be asked for your indirect cost agreement and supporting documentation as part of the comprehensive resource management review process. Be prepared to explain how the indirect costs were calculated.
If it is determined the SFA incorrectly calculated or applied an incorrect rate, the SFA must recalculate the indirect cost expense and correct it in the nonprofit food service account.
You will be asked for your indirect cost agreement and supporting documentation as part of the comprehensive resource management review process. Be prepared to explain how the indirect costs were calculated.
If it is determined the SFA incorrectly calculated or applied an incorrect rate, the SFA must recalculate the indirect cost expense and correct it in the nonprofit food service account.

17. Financial Management of Child Nutrition Programs

18. Why is Financial Management Important?
Cost of meals increasing
Accountability
Essential to effective management
The cost of serving students meals at school continues to increase faster than the generation of revenue in many school districts, leaving directors with difficult decisions to make about long-term goals that will ensure sustainability of the program. At the same time, demands are increasing for more accountability in all nutrition programs. Begin by defining the program objectives and financial goals for your school nutrition program.
The implementation of sound financial management concepts and principles in the operation of a school nutrition program are critical to ensure the program succeeds in meeting these goals:
The nutritional standards,
The accountability requirements
The district’s identified financial program goals
The ability to interpret and analyze the financial outcomes of operational decisions is essential to effective management of school nutrition programs.

19. Financial Questions
What is the primary source of income for my program?
What kind of expenses do I have?
labor, fringe benefits, food, supplies, etc.?
Have you had a gain or loss in the nonprofit food service account over the past three years?
How much does it cost to produce one meal?
Overseeing a school food service program is a difficult job. Here are some questions to ask yourself:
What is the primary source of income for my program?
Does your income come from paid student lunches or federal reimbursement?
What kind of expenses do I have? For example: labor, fringe benefits, food, supplies.
Has there been a gain or loss in the nonprofit food service account over the past three years?
How much does it cost to produce one meal?
These are all questions that help determine the fiscal viability of a program.
A food service director who is competent in financial management develops procedures that support school nutrition program operational goals, comply with regulations, and establish cost control goals.

20. Defining Financial Management
The process of defining the program objectives and financial goals for the school nutrition programs
Implementing activities to attain those goals through the effective use of resources
Financial management includes the process of defining program objectives and financial goals for the school district’s nutrition program.
For example, improving nutrition integrity might be identified as a program objective.
A financial goal might be to allocate a certain percentage of resources to purchasing locally produced products.
A long term financial goal could identify replacing older equipment with new energy efficient equipment.

21. Development of a Financial Management System
Well-defined set of reports that provide reliable and useful information
Know basic financial recording and reporting
Financial reports lend accountability
Generally Accepted Accounting Principles (GAAP)
As a Food Service Director, you should know the basic financial recording and reporting processes and the procedures that provide information for directing the operation of a school nutrition program.
A well-defined set of reports provides reliable and useful information about the school nutrition program.
The value of financial reports to document accountability is directly related to how revenues and expenditures are classified for the program and adhere to Generally Accepted Accounting Principles or GAAP.

22. Unpaid Meal Charges
SFAs should have a written policy on unpaid meal charges and include policies regarding the collection of delinquent meal charge debt.
Policy should be conveyed to all households at the beginning of each school year.
Refer to FNS memos SP and SP
Beginning with the school year, all school food authorities must have a written unpaid meal charge policy. This written policy will be requested as part of the administrative review process.
The written unpaid meal charge policy should be conveyed to all households at the beginning of each school year.
Meal policy goals should ensure students receive a nutritious meal, prevent stigma, prevent overt identification and embarrassment.
The meal policy should maintain financial integrity of the program and avoid negative media coverage of local school nutrition program.
Please refer to our two memos on our website SP and SP for more information.

23. Identify your revenue sources
Forecast your Revenue
To forecast your revenue Obtain data from CNMS and your business office.
Review your claims for both breakfast and lunch and total of each category claimed to calculate your revenue, include point of sale information for non-program foods.
Identify your revenue sources

24. calculate income from each meal served annually by multiplying meals by price charged for breakfast and for lunch
(obtain meals served annually data from CNMS)
and by the reimbursement rates for each eligibility for breakfast and for lunch
and the USDA commodity foods (total meals X current rate(in this example $.24))
Then determine the non program food (A la carte) and interest income from your point of sale records
This total will be your revenue.

25. Identify Expenditures
Determine your expenses.
Food Cost 30 – 50% range in most schools
Labor Cost 25 – 40%
Material and Equipment
Utilities and Indirect costs etc.

26. Expenditure Review~ Cost to Revenue Comparison
The percentage of costs to total revenue can be calculated by dividing the costs for a given period by total revenue.
Formula:
Cost Percentage to Total Revenue =
Category Cost
Total Revenue
An important measurement of a program efficiency is the analysis of operational cost percentages (expenditures) to total revenue. This is also referred to as Cost to Revenue Comparison.
The percentage of costs to total revenue can be calculated by dividing the costs for a given period by total revenue.

27. Our sample school identified there costs by category and determined the percentages of the revenues: read slide

28. Cost to Revenue Information Use ST – 3 Report or Cash Resources Report
This school’s cost revenue GOAL percentages of the school nutrition budget are listed in the last column.
Column 2 – Explanation identifies where the expense is sourced.

29. Cost to Revenue Review
This chart shows the percentage goals THAT WERE AND WERE not met for this particular program.
Labor is higher than desired as is food cost.
FOOD is lower.
Overall expenses exceeded the income causing the school to have a negative fund balance.
What do the cost % mean?
If total of all cost percentages is:
less than 100%, operating balance increases.
equal to 100%, program breaks even.
more than 100%, operating balance decreases.

30. Why it’s important to compare revenue earned with meal cost
Determines if and where revenue should be increased,
Analyze revenue by source
Identifies areas in which revenue should be monitored for revenue loss.
If you know the average revenue generated per meal or meal equivalent, you can compare
that with the average cost to produce a meal.
This comparison is important because it can determine if the Meal cost is to high,
If Labor productivity ratios are highs or lows,
The distribution across tasks and the average revenue earned per meal/meal equivalent will help you analyze the operation.

31. Food Cost Expenditure Percentage to Total Revenue
Formula: Category Costs
Total Revenue
Example: $16,500 (food costs)
$30,000 (revenue)
= .55 x 100 or 55%
$.55 cents from each $1.00 generated was used to purchase food.
Example
Read slide

32. Predicting the ending fund balance
We will now discuss how to evaluate our labor costs and identify potential reductions.

33. Evaluating Efficiency
Establish standard to measure program services
Reimbursable student lunch is the measurement
Breakfast, snack and non-program food sales
In order to use financial statements and reports as tools to evaluate the financial activities of the program, a standard must first be established to measure program services.
In most school districts, the production of the reimbursable student lunch is the measurement used to evaluate efficiency of the school nutrition program.
In addition, all other reimbursable meal types served (breakfasts, snacks) as well as all non-program food sales must be converted to a meal equivalent.

34. Types of Expenditure Analysis
Total costs to produce a meal
Meal costs per expenditure category
Percentages of operational costs to total revenue (operating ratios)
Costs to produce a meal compared with the average revenue generated per meal
There are several types of analyses appropriate for evaluating how effective the program is in managing expenditures. To assure that program priorities are achieved within funds available, analyses must occur on a regular basis. Some of the ways to analyze the program are by calculating:
• total costs to produce a meal/meal equivalent,
• meal cost per expenditure category,
• percentages of operational costs (expenditures) to total revenue (operating ratios), and
• cost to produce a meal compared with the average revenue generated per meal.

35. Using Meal Equivalents in Program Analysis to Measure Performance
Meal cost
Labor Productivity Ratios
Average Revenue earned per Meal/Meal Equivalent
By converting food sales to meal equivalents, the school nutrition director can determine per meal cost, labor productivity ratios or Meals Per Labor Hour, and average revenue earned per meal/meal equivalent.
By converting breakfasts, snacks, and non-program food sales to meal equivalents, the school nutrition director can easily determine these performance measures.

36. Meal Equivalent Conversion Formulas
1 lunch = 1 meal equivalent
3 breakfasts = 2 meal equivalents (2/3 = .67)
3 snacks = 1 meal equivalent (1/3 = .33)
Non-program food sales =
revenue from non-program sales ÷
current free lunch reimbursement +
current USDA Foods value per lunch
This is how you convert all non-program food and breakfast meals sold into lunch equivalents.
1 lunch = 1 meal equivalent
3 breakfasts = 2 meal equivalents (2/3 = .67)
3 snacks = 1 meal equivalent (1/3 = .33)
Non-program food sales = revenue from non-program sales ÷current free lunch reimbursement +
current USDA Foods value per lunch

37. Calculate all meals and meal equivalents
Breakfasts ME = Number of Breakfasts Served x conversion factor
96 x 0.66= or 63
Snack Meal Equivalents = Number of Afterschool Care Snacks Served x conversion factor
54 x 0.33= or 18
Non-program Food Equivalents = Non-program Food Sales Revenue
Federal Free Lunch Reimbursement + USDA Foods Value
$110 /
$ = or 33
Lunches = Student lunches + Adult Lunches
223 =
Using the meal conversion formulas, the total number of meals and meal equivalents (ME) by category

38. Sum your meal equivalents
63 Breakfast meal equivalents
18 Snack meal equivalents
33 A la Carte meal equivalents
223 Lunch meal equivalents
337 Total meal/lunch equivalents
So the equivalents calculated in the last slide total 337
Remember 337 as it will be used in later slide calculations

39. Determine the expenditures for the period
Food costs (includes USDA Foods) = $401.50
Labor costs = $279.50
Benefit costs = $90.50
General supplies/paper supplies = $56.60
Overhead costs (prorated as a daily rate based on an
average monthly cost) = $91.45
Total costs for the day: $919.55
Example: In ABC Elementary School, school nutrition staff members concerned about plate costs in their school decide to analyze daily meal costs.
On the day of analysis, the school nutrition operation served 200 student lunches, 23 adult lunches, 96 breakfasts, 54 snacks in the afterschool care program, and collected $ in non-program food sales.
Expenditures for the day totaled $ Using the following steps, staff calculates the cost per meal based on the number of meal equivalents served for the day.

40. Calculate the per plate meal cost
Meal Costs = Total Expenditures
Total Meals/Meal Equivalents
$ = $2.73
337
Divide the total expenditures for the period by the total meal equivalents. This calculation identifies the cost of producing a meal equivalent on a per-plate basis for the time period analyzed.
The meal cost of $2.73 for the day may be compared to other meal costs for this school nutrition program.
If The meal cost of $2.73 is more than the highest cost for the previous week’s meals. This should alert the school nutrition administrator to investigate the reason for the increase or to the need to balance high-cost with low-cost meals to meet established cost guidelines. In addition, the information is a valuable tool for future menu planning.
If you analyze each day of your cycle menus, you will see the variation in daily per plate costs and identify where changes may need to be made if any.

41. Non-program Foods Adult meals Second students meals
Individual components of the reimbursable meal
Other food items not on the menu
A la carte, vending machines, fundraisers, school stores, catered meals
In addition to setting prices for meals, school nutrition directors must set prices for all non-program foods.
Non-program foods are defined as foods and beverages sold in a participating school, other than reimbursable meals, and purchased using funds from the non-profit foodservice account.
There are generally four types of non-program foods that school nutrition programs elect to sell during the school day.
These food sales include adult meals, second student meals, individual components of the reimbursable meal such as milk, and a la carte items such as snacks that are not on the menu.
School districts should carefully calculate the costs of selling non-program food items and set prices to cover all costs associated with storing, producing, and serving the product to students.
The prices established for extra food and non-program foods should be high enough not to compete with the reimbursable meal price.

42. Non-program Food Sales
Catered food or meals
Contract meals
Special school function meals such as banquets
In addition to non-program food sales at school during the school day, many districts provide food outside the school day or away from the campus. These include catered food, contract meals served on a regular basis, and special school function meals such as athletic banquets.
It is critical that school nutrition directors set prices to adequately cover food and other costs when preparing these types of food functions so there is no loss to the school nutrition program.

43. Category Cost Calculations
Cost of Purchased Food Used Total Lunches + Meal Equivalents Labor Cost Supply Costs
This simple formula can calculate the per – meal costs for all expenditure categories including the cost of producing the meal by totaling expenditures for each meal to include food, labor, etc.

44. Desired Food Cost Percent Mark-up
Determine the raw food cost of the item offered for sale
Identify the desired food-cost percentage for the school nutrition program operation
Establish a base selling price by dividing the item’s food cost by the desired food cost percent
The desired food cost percent mark-up is one of the simplest methods used to determine the price of a non-program food item.
The three steps shown on this slide can be used to establish the base selling price using the desired food cost percent mark-up.
Determine the raw food cost of the item offered for sale.
Identify the desired food cost percentage for the school nutrition program operation.
Establish a base selling price by dividing the item’s food cost by the desired food cost percentage mark-up.
Example: flavored water raw food cost is hypothetically $.68/bottle and we want our alacarte sales food cost at 55% to off set an upcoming higher cost.
.68/55% = $1.236 so we can round to $1.25 each.

45. Meals Per Labor Hour Number Meals/Meal Equivalents
Number of Paid Labor Hours
Example:
338 Meals/Meal Equivalents
24 Paid Labor Hours
= or 14 Meals Per Labor Hour
Reimbursable meals converted into a measurement for comparison to the budget percentages will help you determine your labor costs for the production of an entire day or per item.
Meals Per Labor Hour is a productivity index measured by dividing the total meal equivalents for a given period of time by the total number of paid productive labor hours for the same period.
One of the important decisions any school nutrition director must make is how to lessen the impact of Meals Per Labor Hour on the cost effectiveness of the school meals program.
Determining staffing needs is not always the application of a simple formula and many things may impact staffing in the school nutrition program. Staffing is often complex and requires diligent monitoring by the school nutrition director.
Because of this complexity, it is often better to use a desired range of Meals Per Labor Hour. A hypothetical example would be In addition, a district may want to set different goals for the elementary and secondary levels.
More details regarding these calculations for food service directors are presented in the Managing Professional Cooking program presented annually at Verona, NY at Madison-Oneida Boces by NYSED Child Nutrition. Sign up will be available soon on the CNKC web page.

46. Calculating Cost of Food Used
Beginning inventory + Total Food Purchases = Total Food Available Total Food Available - Ending Food Inventory = Cost of Food Used
One of the most important aspects of administering a school nutrition program is managing food costs.
It is important for school nutrition directors to monitor food costs on a regular basis. High food costs often are the problem when a school or school district nutrition program is experiencing a financial loss.
Calculating the cost of food used on both a monthly and annual basis can assist with monitoring the expenses of the program.

47. Managing Expenditures in the School Nutrition Program
Analyzing financial reports can provide information about:
Patterns or trends,
Significant changes in cost categories
Deviations from financial goals
Possible abuse or theft
Transaction errors
Properly managing funds allocated to cover the costs of operating a school nutrition program is critical to maintain quality standards and ensure nutritious meals are served to students.
Analyzing financial reports can provide us with the following information:
Patterns or trends might suggest an avenue for improvement. An example could be a trend downward in participation, indicating a need for possible improvement.
Significant changes in specific cost categories are a red flag to monitor spending in that area.
• Deviations from financial goals (budget), for example higher food cost percentage alerts the school nutrition director to evaluate food purchases
• Possible abuse or theft within expenditure categories, such as food or supplies may be easier to spot.
• Transaction or accounting errors will likely stand out in financial analysis.

48. Revenue Increase Options
Increase paid meal prices
Paid Lunch Equity
Add approved non-Federal revenue
Use a combination of increased paid meal prices and non-Federal revenue
If a price increase is necessary, adding revenue to the nonprofit school nutrition account can come from increasing paid meal prices.
Please remember that the paid lunch equity tool must be completed annually to ensure the SFA is in compliance with lunch pricing.
Increasing revenues can be adding approved non-Federal revenue to the nonprofit school nutrition account or using a combination of increasing paid meal prices and adding approved non-Federal revenue to the nonprofit school nutrition account.

49. Ways to Lower Food Costs
Set a goal for managing food costs
Monitor meal costs
Use standardized recipes
Pre-cost and post-cost menus
Use cycle menus
Here are some suggestions for lowering food costs:
Set a goal for managing food costs. Allocate a percentage, for example, 40% of revenue for food costs.
Monitor meal costs. Calculate the average food cost per meal on a regular basis.
Use standardized recipes. This will ensure more consistent products and shorten training times.
Pre-cost and post-cost menus to ensure food items are within predetermined costs levels.
Use cycle menus.

50. Ways to Lower Food Costs
Reduce plate waste
Use portion control tools
Avoid overproduction of food
Calculate kitchen waste
Manage the purchase of food items
Reduce plate waste by analyzing reasons for discarded foods. Are menu items unpopular, portions too large, or poor quality?
Ask the student customer with surveys or casual conversation. Eavesdrop as you walk through the dining area, listen to the comments as they make their selections.
Use portion control tools to ensure accurate serving sizes of menu items.
Purchase portion specific tools in spoodles, scoops, and cutting guides for pans.
Avoid overproduction of food by careful forecasting.
Batch cooking is critical to reduce overproduction and improve food quality perhaps yielding less plate waste. Consider the weather, school activities, and short-day schedules for students.
Calculate kitchen waste and account for why it happened. Track cooking mistakes and miss-orders. Ensure standardized recipes are being used and are accurately predicting yields
Manage the purchase of food items through bids and keeping specialized purchases to a minimum.

51. Questions????
This concludes our webinar on financial management. We will now begin to answer the questions. If you have a question, please type it in the Q and A box.

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