The information below pertains to Arizona school districts.
Calculating/Reporting Food Service Match
Q: How do we calculate our required food service match and how do we report it?
A: To determine the District’s state match amount, calculate 30% of the total number of lunches served in the prior fiscal year. Then multiply that amount by the paid lunch reimbursement rate. The amount is reported on the food service page of the AFR and should agree to the District’s accounting records. Your auditor will be looking for the following:
- Was the match made?
- Was the match the correct amount?
- Was the match made from the proper fund (i.e., 001 or 610)?
- Did the amount reported on the food service page of the AFR agree to the District’s accounting records?
* The food service match calculation may be based on years other than the most recent year as a result of the COVID pandemic. Refer to the most recent guidance from ADE School Nutrition.
Calculating Food Service indirect costs
Q: How do we calculate the amount allowable for the food service indirect cost rate?
A: To determine the maximum amount allowable to charge indirect costs against, the District must have an approved indirect cost rate from ADE. The net expenditures must be calculated based on the indirect cost base which is total expenditures minus capital, food and commodities. The amount of this calculation must be compared to the federal reimbursement amount and only the lesser of the two amounts may be multiplied by the approved unrestricted indirect cost rate. The district may recover up to this calculation but is not required to recover all of the indirect costs.
Free meals to cafeteria employees
Q: Can a school district provide free meals to food service employees?
A: Charging food service employees for meals is left to the discretion of the District. According to the Arizona Department of Education Child Nutrition Programs Guidance Manual, meals to food service employees may be provided at no charge, and can be considered a fringe benefit attributable to the food service program. These meals shall be listed in the food service AFR.
Food service management company for determining eligibility for free and reduced-price meals
Q: Can the duties of a food service management company employee include determining eligibility for free and reduced-price meals?
A: According to the ADE Food & Nutrition Department and the Child Nutrition Programs Guidance Manual, while the district is permitted to contract with a food service management company, the determination of free and reduced-price meal eligibility CANNOT be delegated to a food service management company employee. This must be done by a school district employee.
If ADE notifies that the Food Service fund accumulated 3 months cash
Q: What can be done if ADE notifies a school district that the Food Service Fund accumulated more than 3 months’ cash resources at year end?
A: ADE reviews districts’ year end Food Service AFR to determine compliance with the USDA cash management requirements. If a district exceeds the allowable 3 months’ cash resources threshold, ADE will request a corrective action plan from the district. Suggestions to reduce the cash balance to an acceptable limit are: Purchase of computerized nutritional analysis – Purchase of nutrition education activities such as curriculum development or education materials and supplies – Hire a nutrition consultant to assist in planning an education project – Consideration of reducing prices – Purchase of new food service equipment – Charge of an indirect cost rate to the Food Service Fund and transfer of the applicable funds to the Indirect Cost Fund.
Deposit made to an outside food service management company
Q: How do I handle a refundable deposit we made to an outside food service management company or a refundable deposit to a food service cooperative purchasing agency?
A: According to the USFR chart of accounts, a refundable deposit (i.e. security, prerequisite to receiving goods or services, etc.) should not be recorded as an expenditure, but as a refundable deposit in object code 0135.
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