Managing finances is important for the success of a school food service operation. School Food Authorities (SFAs) must comply with state and federal regulations related to resource management, procurement, and allowable costs. The purpose of the school food service account is to operate and improve a school meals program that serves nutritious and appealing meals that meet meal pattern requirements.
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State Aid Payments Received in March 2020 (Earned in SY 2018-19)
Schools participating in the National School Lunch Program (NSLP), School Breakfast (SBP or SBP-Severe), Elderly Nutrition (EN), and/or Wisconsin School Day Milk (WSDMP) Programs:
When evaluating expenses, SFAs must ensure funds support the operation and improvement of the school meals program(s) and that all expenses are allowable (i.e., necessary, reasonable, and allocable) in accordance with 7 CFR 210.14, 220.13(i) and OMB guidance under 2 CFR Part 200.
- Wisconsin does not allow indirect costs to be charged to the school food service account.
- Indirect Cost Guidance SP 60-2016, USDA, 09/30/2016
Annual Financial Report (AFR)
All SFAs participating in USDA School Meals Programs are required to submit a food service Annual Financial Report (AFR) each year. The report categorizes food service revenues and expenditures by program for July 1 through June 30, which is the school fiscal year. The AFR is due annually by August 31
, and can be submitted electronically by accessing Online Services
or the Reporting webpage
. The report may be amended online through December 31 for the prior school year.
Budgeting and Cost Control
Managing school meals program resources can be challenging. There are industry standards and performance indicators to assist food service directors and business managers in improving the quality and efficiency of the operation. The food service budget consists of revenue (sales) and costs (labor, food, equipment, purchased services, and other). Food and labor costs are a large piece of the budget. Tools to aid SFAs in managing a budget can be found below.
SFAs are required to ensure that all revenue from the sale of non-program foods accrues to the non-profit school food service account (7 CFR 210.14(f)). Non-program foods include any non-reimbursable foods and beverages (adult meals, a la carte, vending, catering, etc.) purchased using funds from the non-profit school food service account. Revenue available to support the production of reimbursable meals cannot subsidize the sale of non-program foods. When the SFA sells more non-program foods than adult meals and a la carte milk, the Non-program Food Revenue Tool (see Tools below) must be completed annually.
SFAs participating in the National School Lunch Program (NSLP) are required to ensure sufficient funds are provided to the nonprofit school food service account for meals served to students not eligible for free or reduced price meals (7 CFR 210.14(e)). The requirement can be met through prices charged for paid student lunches or through other approved non-federal sources.
Any SFA with a positive or zero balance in its nonprofit school food service account as of December 31, 2019, is exempt from PLE requirements found at 7 CFR 210.14(e) for school year (SY) 2019-20. For these SFAs, completion of the survey is the record DPI needs to exempt your SFA from completing the PLE Tool.
Any pricing SFA with a negative balance in the nonprofit school food service account as of December 31, 2019, must complete the survey and the PLE tool for the SY 2020-21 to establish prices for paid lunches for SY 2020-21. The PLE tool must then be uploaded to the 2020-21 contract.
Annually, after July 1, the United States Department of Agriculture (USDA) and the School Nutrition Team (SNT) release categorical meal, milk, and snack reimbursement rates. SFAs can use these rates to budget the amount of federal and state revenue earned per meal in addition to any local revenue.
SFAs operating the school meals programs are required to have a written and clearly communicated policy to address unpaid meal charges per USDA memo SP 46-2016. USDA and the SNT have developed resources that SFAs can use in their efforts to manage the challenge of unpaid meal charges. Bad debt is an unallowable cost to the nonprofit food service account per 2 CFR 200.426 of Subpart E. Resources found below cover best practices, questions and answers, and guidance memoranda.
Best Practice Manual from USDA Memo SP 29-2017
- 2017 Edition: Overcoming the Unpaid Meal Challenge: Proven Strategies from Our Nation’s Schools, SP 29-2017, USDA, 05/10/17
- Unpaid Meal Charges Guidance Q&A, SP 23-2017, USDA, 03/23/17
- Financial Questions & Answers, DPI SNT, 11/2020
- Unpaid Meal Charges: Local Meal Charge Policies, SP 46-2016, USDA, 07/08/16
- Unpaid Meal Charges: Clarification on Collection of “Delinquent Meal Payments, SP 47-2016, USDA, 07/08/16
- Denying Meals for Non Payment, FY 1994 Memorandum #3
- FNS Letter from Under Secretary Concannon Addressing Unpaid Meal Charges, USDA, 02/13/14