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Financial Management for School Nutrition Programs

Documents/Forms

This section include an overview of the key elements and resources related to financial management of the school nutrition programs. For detailed guidance and more topics, refer to the CSDE's guide, Financial Management Requirements for the School Nutrition Programs.

Nonprofit School Food Service  |   Nonprofit School Food Service Account  |   Indirect Costs
Capital Expenditure Requests and Equipment Approvals  |   Net Cash Resources
Paid Lunch Equity  |   Unpaid Meal Charges  |   Nonprogram Foods


Nonprofit School Food Service

The school food service program must be nonprofit. Section 7 CFR 210.9 (b)(1) of the NSLP regulations and 7 CFR 220.13(i) of the SBP regulations require SFAs to maintain a nonprofit school food service and observe the requirements for and limitations on the use of nonprofit school food service revenues (7 CFR 210.14) and the limitations on any competitive school food service (7 CFR 210.11). “Nonprofit school food service” means all food service operations conducted by the school food authority principally for the benefit of schoolchildren, all the revenue from which is used solely for the operation or improvement of such food services.


Nonprofit School Food Service Account (NSFSA)

Sections 7 CFR 210.14 (a) of the NSLP regulations and 7 CFR 220.13(i) of the SBP regulations require SFAs to establish a NSFSA. The NSFSA is the restricted account in which all the revenue from all food service operations conducted by the SFA, principally for the benefit of school children, is retained and used only for the operation or improvement of the nonprofit school food service. The USDA's manual, Indirect Costs: Guidance for State Agencies & School Food Authorities, provides assistance to SFA business officials to ensure that NSFSA funds are limited to expenses that are reasonable, necessary, and allocable to provide quality meals for the NSLP and SBP. This guide addresses allowable direct and indirect costs for the NSLP and SBP.


Indirect Costs

Indirect costs are costs incurred for the benefit of multiple programs, functions, or other cost objectives that cannot be identified readily and specifically with a particular program or other cost objective. Indirect costs typically support administrative overhead functions such as fringe benefits, accounting, payroll, purchasing, facilities management, and utilities. SFAs must follow fair and consistent methodologies to identify and allocate allowable indirect costs to the NSFSA.


Capital Expenditure Requests and Equipment Approvals

SFAs may purchase equipment listed on the CSDE’s Capital Expenditure Approved List for School Food Authority Equipment Purchases without prior approval. However, as required by 2 CFR 200.439, SFAs must receive prior approval from the CSDE for any capital expenditure requests for equipment with a unit cost of $5,000 or greater that is not included on this list. Any used equipment with a purchase price of $5,000 or greater also requires CSDE approval.


Net Cash Resources (NCR): Three-Month Operating Balance 

To maintain the SFA’s nonprofit status, sections 7 CFR 210.14(b) and 7 CFR 210.19(a)(1) of the NSLP regulations require that the fund balance (net cash resources) of the NSFSA cannot exceed three months’ average expenditures at any time. “Net cash resources” means all monies, as determined in accordance with the state agency’s established accounting system, that are available to or have accrued to a SFA’s nonprofit school food service at any given time, less cash payable. Such monies may include, but are not limited to, cash on hand, cash receivable, earnings on investments, cash on deposit and the value of stocks, bonds, or other negotiable securities. Refer to page 8 of the USDA's manual, Indirect Costs: Guidance for State Agencies & School Food Authorities.


Paid Lunch Equity

Section 7 CFR 210.14 (e) of the NSLP regulations requires that SFAs must ensure that schools are providing the same level of support for lunches served to students who are not eligible for free or reduced-price lunches (i.e., paid lunches) as they are for lunches served to students eligible for free lunches. SFAs must compare the average price charged for lunches served to students receiving paid lunches to the difference between the higher Federal reimbursement provided for free lunches and the lower Federal reimbursement provided for paid lunches. 

The USDA provides the PLE Tool annually to assist SFAs with making price adjustment calculations. During the NSLP application renewal process, SFAs must use the PLE Tool to ensure that paid lunch prices are set appropriately to cover the cost of a paid student meal. If the average paid lunch price is less than the difference, the SFA must either gradually adjust average prices or provide non-Federal funding to cover the difference.


Unpaid Meal Charges

The CSDE requires that households pay all delinquent student debts no later than June 30 to ensure that students’ accounts are closed. Any delinquent debts that have not been recovered by June 30 will be considered bad debt. These student meal accounts must be at a zero balance for the next school year.

USDA Requirements for Unpaid Meal Charge Policy

USDA Memo SP 46-2016 requires all SFAs to have a written and clearly communicated system to address meal charges. SFAs must inform students and their parents or guardians about how students who pay the full or reduced-price cost of a reimbursable meal are impacted by having insufficient funds on hand or in their account to purchase a meal.

SFAs must ensure that the policy is provided in writing to all households at the start of each school year and to households that transfer to the school during the school year. Additionally, SFAs are encouraged to include the policy in student handbooks and/or in online portals households use to access student accounts. SFAs are encouraged to use multiple methods to disseminate the policy. The written policy also could be provided again to the household through mail or email the first time the policy is applied to a specific student.

Connecticut Requirements for Unpaid Meal Charge Policy in Public Schools 

C.G.S. Section 10-215b requires that each board of education’s (BOE) unpaid meal charge policy must include the three elements below.

  1. A prohibition on publicly identifying or shaming a child for any unpaid charges, including but not limited to delaying or refusing to serve a meal to the child, designating a specific meal option for the child, or taking any disciplinary action against the child.
  2. A declaration of the right for any child to purchase a meal that may exclude any a la carte items or be limited to one meal.
  3. A procedure for communicating with parents or guardians for the purpose of collecting unpaid charges. Communication must include but is not limited to: information regarding local food pantries; applications for free or reduced-priced meals; applications for the Supplemental Nutrition Assistance Program (SNAP) administered by the Department of Social Services; and a link to the town’s website listing any community services available to residents. If a child’s unpaid charges equal or exceed the cost of 30 meals, the BOE must refer the parent or guardian to the BOE’s local homeless education liaison.

C.G.S. Section 10-215c allows BOEs to accept gifts, donations, or grants from any public or private sources for the purpose of paying off any unpaid meal charges.

  • CSDE Operational Memorandum No. 11-22: Connecticut Statutory Requirements for Unpaid Meal Charges in Public Schools  
  • C.G.S. Section 10-215 (Amended 2021): Lunches, breakfasts and other feeding programs for public school children and employees. Collection of unpaid charges. Acceptance of gifts, donations or grants 

Nonprogram Foods

Section 7 CFR 210.14 (f) of the NSLP regulations requires that the revenue from the sale of nonprogram foods covers the cost of the food and is not subsidized though federal reimbursement. “Nonprogram foods” include any nonreimbursable foods and beverages purchased using funds from the NSFSA. This encompasses all foods and beverages sold in schools such as a la carte items (e.g., milk, juice, entrées, and snack foods), second student meals, adult meals, foods sold outside of school hours, and any foods used for catering or vending activities. For most SFAs, a la carte foods offered during meal service account for the largest share of nonprogram foods.