Child Nutrition and Food Distribution Programs NDASBM Spring 2019 Deb Egeland Child Nutrition and Food Distribution Programs Kirsten Baesler, State Superintendent

Why do we care about school lunch? More meals = more $$$$ October statistics determine free & reduced percentage for eligibility in many programs and grants. Needs to be as of October 31. Application on behalf of a student Easiest item for parents to complain about. One area with possible cost savings

Free and Reduced Numbers The F&R% is important for many different reports and grants. One of the most common calls we receive Common question asked by the media. Numbers are available on NDDPI website: https://www.nd.gov/dpi/SchoolStaff/ChildNutritionFoodDistribution/ SchoolDistrictData/ Make sure they are correct before we publish them.

District Financial Report: Reserve Fund Report Used as a snapshot of food service revenue & expenditures Used to calculate the 3 month operating expense limit Used to track transfers between funds: Adult meals paid by district Second entrees paid by district Caterings for district paid back to food service Cook salaries paid by general fund transferred to general fund Need to do this or will exceed 3 month expense limit

Charging: Unpaid Meal Balances Call or send out notices often, include income application. Handout: Non-payment letter Reminders need non-discrimination statement Angel funds: use fairly Charging policy could say any remaining money will be used for angel fund unless parent requests a refund by a certain date. Application on behalf of a child Only used if family will not fill out, not because they were denied or owe $  

Food Service Cannot Absorb Bad Debt Food service cannot absorb bad debt: Section 200.426 of Subpart E, 2 CFR 200 states that “Bad debts…arising from uncollectable accounts and other claims, are unallowable. Unpaid accounts must be restored using non-federal funds. SP 47-2016: Unpaid Meal Charges: Clarification on Collection of Delinquent Meal Payments, July 8, 2016, http://www.fns.usda.gov/unpaid-meal-charges- clarification-collection-delinquent-meal-payments Food service cannot absorb bad debt: USDA FNS Memo SP 57-2016 September 16, 2016: Unpaid Meal Charges: Guidance and Q&A

At what point is delinquent debt considered “bad debt”? When local officials determine further collection efforts for delinquent debt are useless or too costly, the debt must be reclassified as “bad debt.” Once a delinquent debt is reclassified as a bad debt, it must be written off as an operating loss. NSFSA resources may not be used to cover costs related to the bad debt, such as continued legal and collection costs. Instead, these losses must be restored using non-Federal funds. These funds may come from the school district’s general fund, special funding from State or local governments, or any other non-Federal sources.  

State or local funds provided to cover the price of student meals, What non-Federal funding sources may be used to restore operating losses from bad debts? Allowable sources of non-Federal revenue include: State revenue matching funds in excess of the State revenue matching fund requirement, State or local funds provided to cover the price of student meals, Local contributions provided by community organizations or individuals, (angel funds). Revenue from adult meals prepared using resources outside the food service and not funded through the NSFSA, À la carte revenue and profit from foods not purchased using funds from the NSFSA and funded from an account separate from the NSFSA, and Revenue from catering or contracting services that operate using an account separate from the NSFSA.

Are SFAs required to maintain records related to bad debt? Yes. According to SP 47-2016, once delinquent meal charges are converted to bad debt, records relating to those charges must be maintained in accordance with the record retention requirements in 7 CFR 210.9(b)(17) and 7 CFR 210.15(b).   Types of records that should be maintained to document establishment and handling of bad debt include: Evidence of efforts to collect unpaid meal charges in accordance with the policy, Evidence that collection efforts fell within the timeframe and methods established by the policy, Financial documentation showing when the unpaid meal charge became an operating loss. and Evidence that the funds written off as bad debt were restored to NSFSA from non-Federal sources.

Student with Debt Comes with $2.50 If a child has money to purchase a meal but has outstanding meal charge debt, can the SFA require repayment and refuse to provide the child a meal? No. If a child has money to purchase a reduced price or paid meal at the time of the meal service, the child must be provided a meal. SFAs may not use the child’s money to repay previously unpaid charges if the child intended to use the money to purchase that day’s meal.

PLE: Paid Lunch Equity HHFK Act has pricing requirements to ensure free meals are not subsidizing paid meals The 2019-2020 target price is $3.00 There is an exemption available for districts with a positive balance Also a loophole for general fund contributions of 10 cents per meal If you are using general fund, why not increase prices?

Pricing Adult Meals USDA FNS has pricing requirements to ensure student meal reimbursements are not subsidizing adult meals Adult meals must be priced high enough to cover the paid meal rate plus the entitlement value per meal. The 2018-2019 paid rate was 37 cents, entitlement was .3425 37 + 34 = 71 cents higher than the highest student price No charge schools must charge the free rate plus the entitlement: $3.37 + .3425 = $3.7125 The rates will increase for 2019/2020

Smart Snacks All food and beverages sold to students during the school day must meet nutrition standards. Does not apply to food brought from home or given away. If parents are bringing in food and causing a disturbance, consider putting something in the wellness policy banning commercial food, this can be tricky, what about a Subway sandwich?  How many groups will you let have vending machines?

  If a revenue source is funded through NSFSA, then all revenue from the source must return to the NSFSA and may not be used to cover operating losses resulting from bad debts.

Leftovers From NDDPI Administrative Manual for School Food Service page 32: Sponsors are required to plan and prepare, based on participation trends, an adequate amount of food to provide one meal per child per day. Food prepared in excess of the quantity needed may be served again as a leftover. It is imperative that proper sanitation and food handling practices be used when utilizing leftover foods. Of major importance is that foods be reheated to the temperature of 165° F.

Leftovers No food or supplies, including leftovers, may be taken from the school by adults. All purchased food and USDA donated foods are the property of the foodservice program and can be re-served if properly maintained on a sharing table. State agency or local authorities must be notified regarding the removal of food or USDA Foods. There are no restrictions against students exchanging food among themselves, taking a single serving of a non-perishable food in a back pack to eat later on the bus or in the classroom (if allowed by the school) or on the use of a sharing table if allowed by the local health inspector. These are all legitimate cases of students taking food from their tray for themselves, not a staff member taking food out of the cafeteria for adults.

DUNS Numbers SAM: System for Award Management assigns DUNS numbers Every entity needs a DUNS number to receive federal payments Name of entity in SAM must match name on payment and award. Check Grant Awards and Requests For Funds Contact email on record receives notification when expiring

Keep Contacts Current ND Foods: Authorized Reps and Lead Food Service Workers receive correspondence. Some information also goes to record –keepers and /or Finance Managers. Be sure to update with changes: DO NOT JUST CHANGE THE NAME on the email or use someone else’s user name.

Training School lunch is harder than you think, we need to train new cooks. Financial Management: June 25 in Bismarck AR pre-review training June 26 plus more coming BTSW: July 30 Bismarck, August 1 Minot, August 6 Fargo Newsletters: Admin Update for admin, Directions for cooks: https://www.nd.gov/dpi/SchoolStaff/ChildNutritionFoodDistribution/ Newsletters/

Questions and Contact Information Linda Schloer lkschloer@nd.gov 701-328-4565 Deb Egeland degeland@nd.gov 701-328-3718 Rhonda Amundson rhondaamundson@nd.gov 701-328-3237 Toll free: 888-338-3663 or 701-328-2294 Mayville Office: 888-788-8901 Kate Keating