School Nutrition FinanceSpring Financial Training

School Nutrition Program and Local Finance

May 2, 2012 GatlinburgMay 9, 2012 Murfreesboro

May 9, 2012 Pickwick Landing

Office of Local FinanceLEA technical financial support

BEPIDEA / Special EducationNo Child Left BehindAccounting, budgeting, reporting

Nashville officeMaryanne Durski615.532.9510Andrew McClusky 615.532-1654

Office of Local FinanceField Service Centers – Fiscal Consultants

Southwest Ron Adelman615.306.4062

Northwest Brad Davis 615.308.3616Middle Malinda White

615.969.9352Upper Cumberland Bobby Palmer 615.308-

1592Upper East Jackie Broyles

615.306.7429Southeast Carol Newton 615-306-

7974

Accounting Reference MaterialNon-

Centralized

For controls and chart of accountsHttp:www.tennessee.gov/education/support/doc/

July2011TISUAPM.pdf

Centralized

For controlsHttp:www.tennessee.gov/education/support/doc/

July2011TISUAPM.pdf

for Chart of Accountshttp://www.tn.gov/education/support/doc/schacctman.pdf

Chart of AccountsFood Service Chart of Accounts (Centralized)

Federal 47111 USDA School Lunch

Program 47112 Commodities 47113 Breakfast 47114 Other

Current Services 43521 Lunch Payments Children 43522 Lunch Payments Adults 43523 Income from Breakfast 43524 Special Milk Sales 43525 Ala Carte Sales

Revenue• 47000 Federal• 43000 Current

Services

Food Service Chart of Accounts (Centralized)

CentralizedFund 143

Non CentralizedFund 141

• Federal– 47111 USDA School Lunch

Program– 47112 USDA Commodities– 47113 Breakfast– 47114 Other

73100 105 Supervisor/Director 73100 117 Career Ladder Program 73100 119 Accountants/Bookkeepers 73100 162 Clerical Personnel 73100 165 Cafeteria Personnel 73100 188 Bonus Payments 73100 189 Other Salaries & Wages 73100 196 In-Service Training 73100 201 Social Security 73100 204 State Retirement 73100 206 Life Insurance 73100 207 Medical Insurance 73100 208 Dental Insurance 73100 210 Unemployment Compensation 73100 212 Employer Medicare 73100 299 Other Fringe Benefits 73100 307 Communication 73100 329 Laundry Service 73100 330 Operating Lease Payments 73100 336 Maintenance & Repair Svs - Equipment 73100 348 Postal Charges 73100 354 Transportation - Other than Students 73100 355 Travel 73100 399 Other Contracted Services 73100 421 Food Preparation Supplies 73100 422 Food Supplies 73100 435 Office Supplies 73100 451 Uniforms 73100 452 Utilities 73100 469 Commodities 73100 499 Other Supplies and Materials 73100 524 In Service/Staff Development 73100 599 Other Charges 0 73100 710 Food Service Equipment 0

Food Service Chart of Accounts (Centralized)

Expenditures Acct 73100• 100 Personal

Services• 200 Benefits• 300 Contracted

Services• 400 Supplies &

Materials• 500 Other

Charges• 700 Equip

73100 342 Payments to Schools - Breakfast73100 343 Payments to Schools – Lunch73100 344 Payments to Schools – Other73100 345 Payments to Schools - Other USDA

73100 469 Commodities

CentralizedFund 143

Non Centralized

Revenue101-199 Revenue

Expenditures201-299 Expenditures

Balance sheet1-99 Balance sheet

Food Service Chart of Accounts (Non-Centralized)

11 Cash on hand12 Cash in Bank13 Cash in savings

account21 Other investments31 Accounts receivable41 Inventory

Food Service Chart of Accounts (Non-centralized)

Assets Liabilities and Fund Balance

61 Income tax withheld62 Social security tax payable63 Retirement withheld and

payable65 Insurance withheld and payable66 Other payroll deductions71 Accounts payable81 Accrued payroll94 School nutrition fund balance

Balance sheet1-99 Balance

sheet

NOTE: Any account may be expanded to create a sub-level of reporting

111 Students112 Adults113 Other114 USDA

Food Service Chart of Accounts (Non-centralized)

Lunch Breakfast

121 Students122 Adults123 Other124 USDA

NOTE: Any account may be expanded to create a sub-level of reporting

Revenue101-199 Revenue

Milk Other Programs

131 Students132 Adults133 Other134 USDA (Special Milk)

141 Students142 Adults143 Other144 Interest income145 USDA Commodities (in-kind)146 Fresh Fruit and Vegetable Program

210 Labor 220 Food 240 Supplies 250 Utilities 260 Contracted

services 270 Equipment 280 USDA

Commodities (in-kind) 290 Other

Food Service Chart of Accounts (Non-centralized)

Lunch

NOTE: Any account may be expanded to create a sub-level of reporting

Expenditures201-299 Expenditures

BudgetingBest Practice

Involve cafeteria managers in preparing budget

Communicate with district finance officer for benefit rates, salary increases

Base budget on actual expenditures in current year plus any known increases/decreases

Budget must be approved by School Board and governing body

Budget AmendmentsReview budgeted amounts to actual expenditures at

least quarterlyFinance office should provide monthly revenue and

expenditure reports to School NutritionSubmit a budget amendment

If salary expenditures expected to exceed budget New grant revenue and expenditures If total expenditures are projected to exceed budget amount

for the category (i.e. 73100)Amendments must be approved by:

Board of Education (all)Governing body (everything except line item transfers)

Commodity ReportingCommodity Reporting – Centralized

Revenue – 47112 USDA - Commodities Expenditures – 469 USDA – Commodities Budget amendment and journal entries will be

necessary to record commodities No separate report in eReporting required

Commodity ReportingCommodity Reporting – Non-

Centralized Report as part of Non-centralized report in

eReporting New line item created for commodity revenue and

expenditures - 84100 No separate commodity report in eReporting

required

Reporting TimelinesOriginal budget – July 1Budget amendments

Approved by Board of Education and governing body by June 30

Plan ahead – do not wait until the school year ends

Annual Financial Report – August 1 in eReporting

Non-centralized Cafeteria Report – August 1 in eReporting

INDIRECT COSTWhat are Indirect Costs?—costs incurred for common

or joint purposes. Indirect costs benefit more than one program and cannot be readily identified with a single program.

Examples of indirect costs— Attendance Director Finance Department Cost of Audit Worker’s Comp Insurance Maintenance and Operations costs

Indirect CostWhat are Direct costs?—costs that benefit a single

program, costs that are identified with a single program.

Examples of direct costs— Teacher’s salaries and benefits Instructional materials and supplies Professional development Direct Administrative costs Food Costs for School Nutrition

Indirect costCalculation of Rate—

Indirect Costs__________ Direct Costs-Excluded Expenditures

Excluded expenditures (calculated at the system level) include equipment, food purchases, trustee commission, transfers out.

Indirect costRestricted Rate

Lower than Non-restricted RateLimits the amount of general management

costs that can be included in the indirect cost pool (numerator.)

Treats as direct costs Director of Schools administrative costs Maintenance Operations

Used for other Federal Projects calculations

Indirect CostNon-restricted Rate

Higher than Restricted RateTreats as direct costs

Director of Schools administrative costs Maintenance Operations

Used for School Nutrition calculations

Indirect costUsing your non-restricted Indirect Cost

Rate, calculate the Indirect Cost to pay to your General Purpose fund:

Total School Nutrition Expenditures-Food Expenditures-Equipment Expenditures= Expenditure BaseX Non-restricted Rate= Calculated Indirect Cost

Indirect costAn example…

$1,000,000 School Nutrition Expenditures- $300,000 Food Expenditures- $100,000 Equipment Expenditures= $600,000 Expenditure Base X 12.0% Non-restricted Indirect Cost Rate= $72,000 Calculated Indirect Cost

Indirect CostMay take indirect cost ONLY IF there is

an excess operating balance (3 months operating expenditures)

May take indirect cost up to amount of year end excess operating balance onlyIn prior example, if excess balance was

$70,000, then indirect cost on only $70,000 may be taken.

Indirect costWhich year’s rate do I use?

Use the appropriate rate for that fiscal year….Expenditures from July 1, 2011 to June 30, 2012—use

the FY 12 rate.Expenditures from July 1, 2012 to June 30, 2013—use

the FY 13 rate.When budgeting—use the rate for upcoming fiscal year.

If you do not pay indirect costs prior to June 30, setup a payable in Fund 143 and a receivable in General Purpose.

Check would be written after June 30 from the payable account. Deposit into GP receivable account.

Indirect CostNOTE:

If you do take an indirect cost, you may have to recalculate the indirect cost rate IF some of the expenditures included are charged directly to the School Nutrition Program

Example – SNP pays full cost of 3 maintenance workers, parts, vehicles, gasoline, etc. – would have to be taken out of indirect cost calculation since this is a direct cost

Fiscal Consultant will recalculate if necessary

Questions?