1. Financial Management: A Course for School Nutrition Managers

2. 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.

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

4. 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

5. 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

6. Terms and Definitions  Terms and Definitions Handout

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

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

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

10. 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.

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

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

13. 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

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

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

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

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

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

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

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

21. 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

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

23. 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

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

25. 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

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

27. Forecasting  Past  Present  Future

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

29. Activity: Extra Servings Scenario  Extra Servings Handout

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

31. 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

32. Activity: Batch Cooking  Batch Cooking Handout

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

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

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

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

37. Food Buying Guide http://fbg.nfsmi.org

38. 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

39. Food Guide Buying Calculator  A tool to help calculate quantity of food to purchase  Individual calculators for each of the 6 food groups  http://fbg.nfsmi.org/

40. 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.

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

42. Activity: Purchasing Decision, Broccoli  Purchasing Decision Handout

43. Product Screening  Not required  Establish procedures

44. Screening  Paper Screening  Appearance Screening  Taste Screening

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

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

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

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

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

50. Inventory Control  Receiving  Storage  USDA Foods value

51. Receiving Strategies  Procedures

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

53. Storage  Proper conditions

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

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

56. Inventory  Control

57. Inventory Methods  Perpetual inventory  Physical inventory

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

59. 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

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

61. 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.

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

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

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

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

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

67. 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.

68. 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).

69. 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.

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

71. 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

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

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

74. Scheduling  What are implications of poor scheduling?

75. Activity: Production Task Schedule  Production task Schedule Example Handout

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

77. 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

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

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

80. Fraud Prevention  Accounting  Internal Organization  External Organization

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

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

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

84. Communicating Financial Information  Checklist

85. 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?

86. Thank You!  Post - Assessment  Evaluations

87. National Food Service Management Institute 87 www.nfsmi.org 800-321-3054