Leshin-Financial-Management-SI-2013x - John C. Stalker Institute

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10 Νοε 2013 (πριν από 3 χρόνια και 7 μήνες)

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Financial Management

Tools for Program Accountability


Robert Leshin, MPA

Assistant Director, Office for Nutrition Health and
Safety Programs





Objectives


Understand and become familiar with USDA
school lunch resource management regulations



Understand and become familiar with
standardized federal resource management
regulations for usage of federal funds



Understand and become familiar with
standardized program controls used to strengthen
financial effectiveness



Understand the ‘why’ behind the regulations





Massachusetts Department of Elementary and Secondary Education

2

Overview


Allowable Costs


Source Documentation


Accounting Records


Financial Reporting


Internal Controls


Budget Controls


Cash Management

Massachusetts Department of Elementary and Secondary Education

3

Why so many rules and
regulations?


As the steward of the nonprofit school food
service account you must safeguard limited
assets and ensure they are used only for
authorized school food service purposes


Protect against non school food service
charges!


Massachusetts Department of Elementary and Secondary Education

4

Allowable Costs


USDA Program regulation 7 CFR Parts 210.14 and 220.13 (
i
)
require a school food authority to establish a nonprofit school
food service account, in which all reimbursements and other
revenues from SFA operations are retained and used
only
for the
operation and improvement of the nonprofit school food service



All expenditures must conform to Federal Cost Principles 2 CFR
Part 225 (formerly OMB Circular A
-
87)


Necessary;


Reasonable;


Allocable

Massachusetts Department of Elementary and Secondary Education

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Necessary


A cost is
necessary
if the Child Nutrition Program’s
authorizing statute, program regulations or
applicable FNS policy establish that the nonprofit
school food service cannot be operated without
incurring the cost


e.g., a school food service cannot be operated
without incurring the cost of appropriate food

Massachusetts Department of Elementary and Secondary Education

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Reasonable


A cost is
reasonable
if, in its nature and
amount, it does not exceed a price that is
consistent with what a
reasonable

person
would pay under the same or similar
circumstances.

Massachusetts Department of Elementary and Secondary Education

7

Criteria to Help Determine
Necessary & Reasonable Costs


How does the cost contribute to achieving an
objective of the school food service?



Is the cost recognized as ordinary and
reasonable for the operation of the school food
service?




Would a prudent person find the cost to be
reasonable under the circumstances?



Massachusetts Department of Elementary and Secondary Education

8

Allocable


A cost must be assigned to the programs,
functions, activities or other cost objectives
that benefited from the school district having
incurred the cost (
cost allocation plan needed
)


For example, school food service cannot be
billed a higher share of utility costs just
because the school district doesn’t have the
funds


Such an action would assign the cost to a cost
objective that did not benefit from it


Massachusetts Department of Elementary and Secondary Education

9

Allowable or Unallowable?


Food


Hamburger patties (allowable)


Labor


School secretary (depends)


Food service assistant (allowable)


Other


Unpaid charges/bad debt (unallowable)


School board dinner (depends)


A new refrigerator (allowable w/ prior approval)


Renovating a kitchen (depends)



Massachusetts Department of Elementary and Secondary Education

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Source Documentation


POS system


General Ledger


Payroll


Paid bills


Time and attendance records


Communication is key: Food Service Director
and Business Manager.

Massachusetts Department of Elementary and Secondary Education

11

Accounting Records


How does your program track revenues and
expenditures? Who is involved?



Do you maintain consistent methods in doing
so?



Do you know how much money you take in
and spend out daily/monthly?

Massachusetts Department of Elementary and Secondary Education

12

Why Account for Revenues and
Expenditures?



Two Reasons:



Official and,



Sensible!





Massachusetts Department of Elementary and Secondary Education

13

Official Reasons


7 CFR Part 3016.20 states, “Grantees and sub
grantees must maintain records which
adequately identify the source and application
of funds provided for financially assisted
activities.”


Proper record keeping a principle of the
Generally Accepted Accounting Principles
(GAAP), which is the uniform standard of
guidelines for financial accounting used in
school districts for compliance with Federal
requirements

Massachusetts Department of Elementary and Secondary Education

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Sensible Reasons


All businesses (nonprofit and for profit) need
to account for every penny of their financials
in order to be successful


Need to trace all funds coming in and going
out to achieve financial accountability


Protect employees (including yourself!)


Be able to answer financial questions easily
and accurately from local, state and federal
officials

Massachusetts Department of Elementary and Secondary Education

15

Adequately Documented


There is no standard definition for what
“adequately documented” means



The record of a school food service’s operation
must be solid and able to stand on its own
without depending on interpretation or “spin”
by the program operator

Massachusetts Department of Elementary and Secondary Education

16

What You Need to Track


Revenue


Defined as income received in exchange for
goods or services provided by the school food
service department
(National Food Service
Management Institute NFSMI).


Examples: sales to students, prepaid sales,
reimbursements, adult sales, interest,
catering, vending sales etc.

Massachusetts Department of Elementary and Secondary Education

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What You Need to Track
Cont’d


Expenditures


Defined as costs that can be indentified
specifically with the operation of the school
foodservice program (NFSMI)


Examples: Food, labor, equipment, sanitation,
outreach, promotional, fees, licenses, etc.


Massachusetts Department of Elementary and Secondary Education

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Required Financial Reporting

Profit & Loss


Displays the results of operations for a certain
time period, showing the income received and
expenses paid for a particular month


Shows financial performance for one month


No beginning cash balance (starts at $0 everyone
month)


Must be tracked and recorded separate from
supplemental financial report


Why? You want to know your performance for a
particular month separate from your overall
balance sheet.

Massachusetts Department of Elementary and Secondary Education

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Financial Reporting Cont’d

Supplemental Financial Report



Balance sheet
-

end of month cash flow statement
and status of assets and liabilities


Pulls all of your record keeping (revenues,
expenditures, inventory, payroll, liabilities etc.
together)


Should be filled out monthly via the ESE security
portal


Why? You want to know your financial status for a
period of time (throughout the whole year) not
just a particular month.





Massachusetts Department of Elementary and Secondary Education

20

Resource Management


Budget Controls



Internal Controls



Cash Management


Massachusetts Department of Elementary and Secondary Education

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Why resource management?


Lunch aide steals more than $13,000 running a la
carte line
-

Louisiana 2012.


FSD pleads guilty to embezzling more than $100,000
-

Oklahoma 2012.


Lots of smaller thefts, but all have lack of basic
management controls in common


Keeps your food service operation from reaching its
financial potential and from increasing its financial
independence from the District


Protects employees

Massachusetts Department of Elementary and Secondary Education

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How does your food service
control theft or loss?

Massachusetts Department of Elementary and Secondary Education

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Budget Control


Compare actual vs. budget


Who is reviewing this?

(FSD, Business
Manager, both?)


How often do you compare expenditures?


Cost of food & supplies used


Cost of labor


Food & labor percentages (of total revenue)


Meals Per Labor Hour (MPLH)


Cost of producing a meal

Massachusetts Department of Elementary and Secondary Education

24

Internal Control


Effective control and accountability for all cash, property
and other assets.



Do you have written policies/procedures with employee
sign off?



Inventories
-

monthly (stay on top)


Purchased food, commodities & non
-
food supplies


Equipment (mark equipment)


Revenue


Average Daily Participation (ADP)


Meal count trends


Pricing
-

student & adult meals, a la carte


Cash handling procedures




Massachusetts Department of Elementary and Secondary Education

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Cash


Cash is a liquid, portable and desirable asset.
Therefore, districts must have adequate
controls to prevent theft or other misuses of
cash.



Massachusetts Department of Elementary and Secondary Education

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New Meaning to “Cold Hard Cash”

Massachusetts Department of Elementary and Secondary Education

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Cash Management


Written policies


How cash is handled and deposits are made


Training


Ensure staff understands policies and sign off


Cash Controls


Segregation of duties


Proper authorization and designation of cash
handlers


Adequate documents & records


Physical controls


Independent checks on performance


Massachusetts Department of Elementary and Secondary Education

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Cash Management Cont’d

Cash Controls at the Register



Minimize Time and Confusion


25 cent increments in pricing


Encourage families to pay online or times other
than lunch service


Count out cash drawers after each shift


Reduce suspicion


Reconcile daily cash register readings to cash
deposits


What is the process for discrepancies?

Massachusetts Department of Elementary and Secondary Education

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Cash Management Cont’d

Cash Controls at the Register



Set Overage and Shortage Limits


Decide on a reasonable tolerance



Document transfers between drawers


Account for inter
-
register exchanges in order to
properly reconcile



Massachusetts Department of Elementary and Secondary Education

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Resources


NFSMI Financial Management Information System

http://www.olemiss.edu/depts/nfsmi/Information/fmis/fmis_booklet.htm


2 CFR Part 225 (formerly OMB Circular A
-
87) Cost Principles for State, Local, and Indian Tribal Governments

http://www.ecfr.gov/cgi
-
bin/text
-
idx?c=ecfr&tpl=/ecfrbrowse/Title02/2cfr225_main_02.tpl


7 CFR Part 3016 Uniform Administrative Requirements

http://www.ecfr.gov/cgi
-
bin/text
-
idx?c=ecfr&tpl=/ecfrbrowse/Title07/7cfr3016_main_02.tpl



7 CFR 210.14 Resource Management

http://www.ecfr.gov/cgi
-
bin/text
-
idx?c=ecfr&sid=02dde6ef8db07a90198929f18099722e&rgn=div5&view=text&node=7:4.1.1.1.1&idno=
7#7:4.1.1.1.1.3.1.6



7 CFR 220.13.(
i
) Record Keeping

http://www.ecfr.gov/cgi
-
bin/text
-
idx?c=ecfr&sid=b1239e07dc80865bec89e9e7456cbb74&rgn=div5&view=text&node=7:4.1.1.1.3&idno
=7#7:4.1.1.1.3.0.1.13




Massachusetts Department of Elementary and Secondary Education

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