School Lunch Internal Controls Ryan Preston W. Tyler Michael Stephanie Jacobs

Federal Programs  – Fresh Fruit & Vegetable Program  – Child & Adult Care Food Program (CACFP)  Child Nutrition Cluster (CNC)  National School Lunch Program (NSLP)  School Breakfast Program (SBP)  Special Milk Program for Children (SMP)  Summer Food Service Program for Children (SFSPC)

Regulations  Richard B. Russell National School Lunch Act  Child Nutrition Act of 1966  7 CFR 210 – NSLP  7 CFR 220 – SBP  7 CFR 215 – SMP  7 CFR 225 – SFSP  7 CFR 245 – Eligibility  7 CFR 250 – Donated Foods (Commodities)

Timeline  Single Audit Act of 1984  Office of Management & Budget (OMB)  Circular A-128 (1985)  Single Audit Act Amendments of 1996  Compliance Supplement  OMB Circular A-133 (1997)

Compliance Supplement  “This tool allows Federal agencies to effectively communicate items that they believe are important to the successful management of the program and legislative intent.”  Summarization of requirements  NOT all inclusive

Compliance Supplement  14 types of compliance requirements:  Activities Allowed or Unallowed  Allowable Costs/Cost Principles  Cash Management  Davis-Bacon Act  Eligibility  Equipment & Real Property Management  Matching, Level of Effort, Earmarking

Compliance Supplement  14 types of compliance requirements:  Period of Availability of Federal Funds  Procurement and Suspension and Debarment  Program Income  Real Property Acquisition and Relocation Assistance  Reporting  Subrecipient Monitoring  Special Tests and Provisions

Compliance Requirements  Part II of the Compliance Supplement  Matrix  For CNC, Davis-Bacon Act & Real Property Acquisition and Relocation Assistance are Not Applicable  State/Local Level Applicability

Activities Allowed or Unallowed  Operation or improvement of school food service  NOT:  Purchase land/buildings  Unless approved by FNS  Construct buildings

Allowable Costs/Cost Principles  Allowable Costs:  Operation and improvement of school food services  Cost Principles  Attachment A  Necessary, Reasonable, Consistent, Legal, etc.  Attachment B  43 Sections of principles  Attachment C  State/Local-Wide Central Service Cost Allocation Plans  Attachment E  State and Local Indirect Cost Rate Proposals

Cash Management  7 CFR §210.9(a)  Cash balance can NOT exceed 3 months of average expenditures

Davis-Bacon Act  Not applicable to CNC per Compliance Supplement

Eligibility  Must be child  Annual Application  Income eligibility  Categorical eligibility  Direct certification  SY 14-15: Community Eligibility Provision  SBOA prescribes the Free/Reduced application

Equipment & Real Property Management  Equipment:  Have a policy  Comply with State policies and procedures  Record of equipment  Physical inventory taken biennially  Physical safeguards  Real Property  Not allowable

Matching, Level of Effort, Earmarking  Matching  Applicable at State level only  Level of Effort & Earmarking  Not applicable

Period of Availability  Only applicable at the state level

Procurement and Suspension and Debarment  Procurement  Contracts  IC 5-22  Suspension and Debarment  Can NOT contract with parties that are otherwise suspended or debarred

Program Income  Gross income received that is directly generated by the federally funded project  Income from fees charged to students and adults  Used for program purposes

Real Property Acquisition and Relocation Assistance  Not applicable to CNC per Compliance Supplement

Reporting  Monthly Claim for Reimbursement  Due 60 following end of month  Annual Financial Report  Due by September 1 st  Verification Summary  Due by December 15 th

Subrecipient Monitoring  Only applicable at State level

Special Tests and Provisions  Verification of Free & Reduced Price Applications  School Food Accounts  ALL revenues (including rebates) & expenditures must be used to operate and improve food services  Paid Lunch Equity  7 CFR (e)  SY : $2.59  SY : $2.65

Some Suggested Practices  After collections are made one person counts the collections and another person verifies the count.  The verifier posts the collections to the records and fills out the deposit slip.  Director/Supervisor compares posting to deposit and takes deposit to the bank.

Some Suggested Practices continued  At the end of the month the Corporation/ECA Treasurer compares receipt postings to bank statement and reconciles bank account to record balance.  Director/Supervisor reviews reconcilement and record balance for errors.

Prepaid Food Accounts  Teacher receives money from student and completes SA-8 to detail collections.  Teacher remits collections to designated school lunch employee; they post to individual student account; complete the deposit ticket; and remits to Director/Supervisor.  Director/Supervisor reviews student account posting; takes deposit to bank; provides collection report to School/ECA Treasurer.

Prepaid Food Accounts continued  Corporation/ECA Treasurer posts daily collections to Prepaid Food fund (8400).  Student receives a meal; School Lunch employee “charges” the student’s individual account.  Director/Supervisor compares total meals served to free, reduced, and “charges”; Remits “charges” report to Corporation/ECA Treasurer.

Prepaid Food Accounts continued  Corporation/ECA Treasurer posts “charges” by disbursing funds from Prepaid Food fund (8400) and receipting into School Lunch fund (800).  Director/Supervisor reconciles individual student accounts to balance Prepaid Food fund (8400).

Prepaid Food Accounts continued  School Board should adopt a Bad Debt/Uncollectible policy.  Director/Supervisor should follow policy and make adjustments to individual student accounts; provide Corporation/ECA Treasurer with adjustments.  Corporation/ECA Treasurer should review adjustments and then post necessary transfer between Prepaid Food fund (8400) and School Lunch fund (800).

 Questions?

Contact  Ryan Preston   W. Tyler Michael   Stephanie Jacobs 