1. Food Service Financial MANAGEMENT
Lindsey A. Hill, R.D.
Director of Nutrition Services
South Madison Community School Corporation

2. Topics to be covered Part 1: Effective Financial Management
Monitoring more than the fund balance
Budgeting
Part 2: Proper Accounting Principles
Separation of revenue and expenditures
8400 Prepaid Funds reconciliation

3. About me Who I am Who I am NOT
Director at South Madison Community School Corp (Pendleton, IN)
4600 students / 6 buildings / 30% Free/Reduced
Foodservice Hamilton Heights School Corp (Arcadia, IN)
Administer/train onsite Director
10 years experience as a FS Director and passionate about the child nutrition industry
Registered Dietitian / Business educational background
Who I am NOT
Accountant
School Corp Treasurer / CFO / Business Manager

4. Part 1: Effective Financial Management Monitoring more than the fund balance
Revenue
(SMCSC Example)
Total = $2,090,000

5. Part 1: Effective Financial Management Monitoring more than the fund balance
Expenses
(SMCSC Example)
Total = $1,975,000

6. Profit / Loss Statement
Part 1: Effective Financial Management Monitoring more than the fund balance
Profit / Loss Statement
Revenue
$2,090,000
Expenses
$1,975,000
Profit
$115,000 (5%)

7. Inventory and Cost of Goods Sold
Part 1: Effective Financial Management Monitoring more than the fund balance
Profit/Loss by School
Inventory and Cost of Goods Sold
Each site performs monthly Physical Inventory
Starting Physical Inventory + Purchases – Ending Inventory = COGS (Cost of Good Sold)
Participation
Percentage of students purchasing meals at each school
Revenue per student
Accounts for ala carte sales
Meals per Labor Hour
Productivity and labor amounts

8. Part 1: Effective Financial Management Budgeting
Not required by federal or state regulations
Should perform annually and follow budget on YTD basis
Methods:
Revenue
Use historical info
Use average revenue per day and project out 180 days + other misc
Expenses
Use actual amounts where possible (i.e. labor, contracts already determined)
Include indirect costs and verify as percentage of revenue
Include equipment replacement
*Budget for a PROFIT (unless you are trying to reduce fund purposefully)*

9. Separate revenue and expenditures by school
Part 2: Proper Accounting Procedures Separation of Expenditures and Revenue
Separate revenue and expenditures by school
Align categories with Budget and DOE Annual Financial Report – but don’t overcomplicate
Good = Separate food, supplies, labor, equipment, technology, travel, etc
Bad (overcomplicated) = Separate food, supplies, labor by breakfast, lunch, ala carte. These figures can be found using allocations on AFR
Make catering a separate cost center (food, supplies, labor)

10. Part 2: Proper Accounting Procedures 8400 Prepaid Account
Student and adult cafeteria account funds should be held separately in fund
Funds are transferred between 8400 and 0800 as they are spent
SBOA recommends “reconciling” once/month and annually to ensure fund balance matches Point of Sale (POS) balance

11. Part 2: Proper Accounting Procedures 8400 Prepaid Account
STARTING POS Account Balances
Deposits
Adjustments
Refunds
Over/Shorts
Sales
ENDING POS Account Balances
Monthly >
STARTING/
ENDING POS Balances
STARTING /
ENDING 8400 Balance
Annually >

12. Part 2: Proper Accounting Procedures 8400 Prepaid Account
STARTING POS Account Balances
Deposits
Adjustments
Refunds
Ove/Shorts
Sales
ENDING POS Account Balances
Monthly Method
FS Director locates the above numbers and ensures that the above is true.
If the above does not match, investigate why and adjust as necessary.
All deposits go directly into 8400
Transfer sales amounts from 8400 to 0800 monthly by school
Ensure Adjustments, refunds, etc accounted for

13. Part 2: Proper Accounting Procedures 8400 Prepaid Account
STARTING/
ENDING POS Balances
STARTING /
ENDING 8400 Balance
Annual Method
For June 30, ensure that the Ending POS balance matches the ending 8400 balance
This ensures the starting July 1 POS balance matches the ending POS balance
This accounts for any monthly discrepancies related to online payments timing

14. Part 2: Proper Accounting Procedures 8400 Prepaid Account
Tips and Best Practices
“Live” information (POS) vs. “Actual” (Bank Records)
Online payments
Are open 24 hrs/day unlike the bank
Deposits into student accounts many times do not “hit the bank” until a day or two later
Consider shutting down over part of summer to be able to reconcile annual
Must track each month what the difference is, should net zero at end of year
POS reports
Check what parameters are being set on report (snapshot in time)
Ensure you are including ALL balances (negative and positive)
Consider rollover processes and how this effects

15. SMCSC Example Process
Cash/Check deposits taken to bank daily by school Manager. Deposit receipts organized and matched to POS reports weekly by FS department. Given to business office to receipt into financial software
End of Month
FS Director completes this summary spreadsheet and turns into business office
YELLOW boxes completed with information from POS reports
BLUE boxes communicate to treasurer which fund
PINK should match POS
GREEN info comes from online payment statements
ORANGE should net ZERO at end of year
FS Director keeps POS account balance reports on file
FS Director tracks down issues if it doesn’t match (with the help of Treasurer as needed)

16. Part 2: Proper Accounting Procedures 8400 Prepaid Account
Tips and Best Practices
SET UP PROPER INTERNAL CONTROLS
Minimize school level ability to process refunds, adjustments, transfers
Consider eliminating prepayments on the cafeteria line (decreases risk of theft and cashier error, speeds line, less issues you have to track down)
Ensure that FS administration has processes in place for refunds, adjustments, NSF checks, more
You will have cash over/shorts. If you don’t have any cash over/shorts that means the cafeteria staff is doing something to force everything to match.
Important for the FS Director and the district business office to work together

17. Any Questions? Lindsey A. Hill, R.D. lhill@smcsc.com