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Financial Management

Overview

piggy bank

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 nonprofit school food service account may only be used for the operation and improvement of the school meal programs, which includes serving nutritious and appealing meals that meet meal pattern requirements. 
 

AIDS Banking

Please make sure you have completed your banking information at the Aids Banking System to receive payments via ACH (direct deposit) from DPI. This includes all payments from DPI, not just those for Food Service.

AIDS Banking 

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State Aid Payments Received in May 2025 (Earned in SY 2023-24)

Schools participating in the National School Lunch, School Breakfast, Elderly Nutrition, and/or Wisconsin School Day Milk Programs:

Allowable Costs

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.
 
 

Indirect Costs

  • Wisconsin does not allow indirect costs to be charged to the school food service account.

  • All costs that are charged to the nonprofit food service account must be documented as direct costs. A time study must be completed for any non-food service employee that has their labor charged to the nonprofit school foodservice account.

  • Indirect Cost Guidance SP 60-2016, USDA, 09/30/2016

Other

Annual Financial Report

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.
 

Resources

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.
 

Resources

Nonprogram Foods

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.
 

Tools

Resources

Memos

Paid Lunch Equity (PLE)

Paid Lunch Equity: Guidance for School Year 2026-27

The USDA Memorandum SP 06-2026 Paid Lunch Equity: Guidance for School Year 2026-2027 includes guidance on the school year (SY) 2026-27 Paid Lunch Equity (PLE) exemption provided under the 2026 Appropriations Act for qualifying School Food Authorities (SFAs).

Non pricing SFAs

All SFAs that are “non-pricing,” including SFAs that operate the Community Eligibility Provision (CEP) district-wide or Residential Childcare Institutions (RCCIs), are always exempt from the PLE requirements. The remainder of this communication does not impact these SFAs.

SFAs Qualifying for the SY 2026-27 PLE Exemption

Any SFA with a positive or zero balance in its nonprofit school food service account as of June 30, 2025, is exempt from PLE pricing requirements found at 7 CFR 210.14(e) for SY 2026-27. The PLE exemption means your SFA does not have to complete the PLE tool, nor increase paid meal prices unless you elect to do so. Paid lunch prices cannot be decreased below the current school year prices, even with the exemption.

The Department of Public Instruction (DPI) Bureau of School Nutrition (BSN) utilized the ending fund balance reported in the SY 2024-25 Annual Financial Report (AFR) to determine which SFAs are exempt from the PLE requirements. Any SFA that had a zero-fund balance in the nonprofit school food service account and was required to make a fund transfer into the National School Lunch Program to bring the account to zero is determined to have a negative fund balance and is NOT exempt from the PLE requirements.

SFAs NOT Qualifying for the SY 2026-27 PLE Exemption

SFAs that had a negative balance in the nonprofit school food service account as of June 30, 2025, must follow PLE requirements when establishing their prices for paid lunches in SY 2026-27. These SFAs must use the PLE tool to establish paid lunch prices and may use the last charged paid lunch meal prices to students as the basis for the SY 2026-27 paid lunch price calculation. SFAs are not required to raise their paid lunch price by more than 10 cents for SY 2026-27 from the last year they charged paid lunches. However, SFAs can choose to raise the paid lunch price by more than 10 cents.

Reimbursement

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.

Rates

Resources

Unpaid Meals

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.

 

Resources

Memos

Contacts

Karen Jardaneh, RDN, CD, SNS

Nutrition Program Consultant
(608) 267-9128
karen.jardaneh@dpi.wi.gov

Jill Fehler

Nutrition Program Consultant
(608) 266-6947
jill.fehler@dpi.wi.gov

Caren Johnson
Nutrition Program Consultant
(608) 266-1636