Financial Management

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Financial Management

• Alabama CNP Directors
• October 2014

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Financial Management
SECTION I UNDERSTANDING THE SDE ACCOUNTING
SYSTEM MOST COMMON ACCOUNTING CODES FOR CNP (Not
all inclusive, most commonly used) DEFINITIONS OF
ASSET CODES DEFINITIONS OF LIABILITY
CODES DEFINITIONS OF FUND EQUITY
CODES DEFINITIONS OF REVENUE CODES DEFINITIONS OF
FUNCTION OF EXPENDITURE ACCOUNT CODES DEFINITIONS
OF OBJECT OF EXPENDITURE CODES DEFINITIONS OF
FUND SOURCE CODES DEFINITIONS OF PROGRAM
CODES DEFINITIONS OF SPECIAL USE CODES
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Financial Management

• Goal of a Financial Management System
• is to provide reliable information to the user in
  order that decisions might be made confidently.
•  

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Financial Management

• Uniformity
• all data is recorded the same way each time so
  that the results may be compared from one
  accounting period to the next, one budget year
  to the next, or among schools or even districts.

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Financial Management

• Accurate comparison
• the ability to compare like items or like
  facilities (apples to apples) will provide
  credible information.

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Financial Management

• Valid and reliable benchmarking
• school districts can make a comparison of their
  data to that of recognized best practices
  facilities/districts

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Steps to Effective Financial Management

• What is the SDE Accounting System?
• How transactions are recorded.
• How the accounting reports and printout present
  the financial results and position of the CNP.
• How to interpret the accounting reports.
• The types of revenue and expenditures of the CNP.
• How to measure the CNPs productivity and
  efficiency.
• How to Budget and Stick to it.

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The SDE Accounting System

• A 27-digit accounting code is used to identify
  each transaction and to provide uniformity of
  accounting and reporting information.

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 Accounting System Components Definitions

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  6 7 8 9
• _ _ / _ / _ _ _ _ / _ _ _ / _ _ _ _ / _ _ _ _ / _
  / _ _ _ _ / _ _ _ _
• General Ledger and Special Reporting
  Codes
• Fund Type Account Group (2 digits)-
• fund types and two account groups.
• USDA programs recorded as Fund Type 12 (Special
  Revenue Fund) for specific revenue sources that
  are legally restricted to expenditures for
  specific purposes. CNP funds fall in this
  category since separate budget and financial
  reporting requirement by state and federal gov.

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Accounting System Components Definitions

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  6 7 8 9
• 1 2 / 4/ _ _ _ _ / _ _ _ / _ _ _ _ / _ _ _ _ / _
  / _ _ _ _ / _ _ _ _
• General Ledger and Special Reporting
  Codes
• Account Type ( 1 digit)
• designates five (5) major account types (
  Assets-1 Liability-2
• Fund Equity-3 Revenues-4 Expenditures-5)
• Account Code ( Function indicated by four (4)
  digits)
• used to designate balance sheet (assets,
  liabilities, and fund equity), revenue and
  expenditure accounts. For example, Cash
  (0110-0119), Investments (0120-0129), Receivables
  (0130-1239), Inventories (0140-0149),
• Other Assets (0150-0159).liability ( 0200-0299)
  fund equity (0300-0399),
• Revenue( 4 used for identification) Expenditures
  ( 5 used for identification)

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Accounting System Components Definitions

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  6 7 8 9
• _ _ / _ / _ _ _ _ / _ _ _ / _ _ _ _ / _ _ _ _ / _
  / _ _ _ _ / _ _ _ _
• 4. Object (3 digits)
• used to classify in detail the services or
  commodities bought or paid for. For example,
  Food Service Director 117, Manager 115, Food
  service Assistants 109, Garbage Removal 348,
  Telephone 361.
• 5. Cost Center (4 digits)
• Code for cost center is determined by each
  School System. Each school and Child Nutrition
  Central office has a different number .
• Central office may be 0010, HS 0031, elementary
  0040, elementary 0020, middle school, 0056

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Accounting System Components Definitions

• 1 2 3 4 5
  6 7 8 9
• _ _ / _ / _ _ _ _ / _ _ _ / _ _ _ _ / _ _ _ _ / _
  / _ _ _ _ / _ _ _ _
• 6. Fund Source (4 digits) identifies the
  sources of the money. Funds received from
  USDA-Food and Nutrition are coded 5100-5199,
  School Lunch Section 11 (5110), School Lunch
  Section 4 (5120), School Breakfast (5130),
  Commodities (5160). However, use 5101 as default
  except for 5170 for Summer Feeding sponsors.
• 7. Appropriation year (1 digit)
• used to route activities to specific fund year
  current yr. 0 LEA carryover 1
• 8. Program (4 digits)
• code for a plan of activities and procedures
  designed to accomplish a pre-determined set of
  objectives. CNP uses 8420 only.
• 9. Special Use (4 digits)
• used to further breakdown for any other codes
  (8000-8999)

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Equipment Budget
Equipment Purchase Request Equipment Purchase Request Equipment Purchase Request Equipment Purchase Request Equipment Purchase Request
System Name    
System Number     SDE Use Only SDE Use Only
Date Approval Approval
School Name School Name Equipment Item Equipment Item Quantity Cost / Item Total Cost To Complete Approved By Date
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      
            0.00      

Sheet Total Sheet Total 0.00
SIGNATURES REQUIRED SIGNATURES REQUIRED Summary from previous sheets Summary from previous sheets Summary from previous sheets  
0.00

CNP DIRECTOR    
Submission Date Submission Date    

CSFO    


SUPERINTENDENT    








REVISED 7-2014


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Equipment Approvals

• 5,000 or greater must have written approval
• Funds must available
• Superintendent approval
• Anticipated completion date

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Emergency Purchases

• Prevents the production or service of the meal
• Cannot be a custom designed/built item
• Declared an emergency by the board
• Must document all prices/all contacts

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Bidding Equipment

• Must make a comparison of relevant features to
  eliminate inadequate items
• Verify size requirements
• Verify utility requirements
• Delivery/set up requirements
• Demonstration of equipment
• Warranty contract
• Repair contract

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Capital Improvement

• May not purchase land or buildings
• May not pay for construction that increases the
  square footage
• Renovations or improvements that improve the
  facility but do not increase the size are
  potentially allowable
• Cannot use CNP funds if not properly procured

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Capital Improvements

• Fund balance must not drop below 2.0 months by AL
• All schools must have basic large equipment
• USDA gives the State the responsibility for
  determining if the capital project expenditure is
  an allowable cost
• Unapproved capital expenditures are unallowable
  costs

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Uniforms

• Only allowable if the LEA has an established
  board-approved policy to provide uniforms to all
  support personnel, not just CNP
• Non-taxable fringe benefit if the uniforms are
  required to be worn as a condition of employment,
  are clearly identified as a uniform and not
  suitable for everyday wear
• If a cash allowance is given and is considered as
  compensation, then the amount is taxable and to
  be included on the W-2

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Adult Meals

• Excess costs associated with sales or services to
  adults not covered by the sale price of the meal
  or item are not allowable expenses
• Payments and reimbursement received for all
  childrens meals may not be used to offset the
  cost of adult meals

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Adult Meals

• Meals served to non-program adults must be priced
  to cover all costs of the meal
• Adults should receive portions comparable to the
  high school student
• The cost of extra servings or oversized servings
  must be added to the price of the meal
• Beverage with meal is milk- other beverage
  selected to be charged at ala carte established
  price

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CNP Staff Meals

• Meals may be served without charge to full time
  staff directly involved in the production and/or
  service of the meal to children
• Does not include principals, coaches, band
  directors, board members, or superintendents

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Program Incentives

• Allowable only if promoting specific program
  purposes of outreach and nutrition education
• Unallowable
• Staff morale boosters
• Personal items for staff
• Items not related to outreach or nutrition
  education

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Worthless (NSF) Checks

• Worthless checks are an unallowable cost to the
  CNP-cannot be written off
• Each school district must have a worthless check
  policy
• A fee can be charged for all returned checks to
  cover expenses
• Non-public funds must be used to cover any NSF
  check
• Can use a collection agency to recover NSF check
  (rebate)

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Indirect cost

• Calculated each year by the CSFO
• Each school district is different
• May not be charge or direct bill CNP for items
  calculated in indirect cost rate

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Pass Thru Calculations

• Required to be completed and submitted to CNP
  Audit Manager on or before 09/30 each year
• Worksheet located in the audit section of child
  nutrition
• State funding for non certificated staff as
  authorized by the State Legislature for increases
  in annual salaries and fringe benefits since 1993

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Property Inventory

• School districts will prepare CNP physical
  property inventory
• Yearly accountability of items purchased with CNP
  funds required
• Information needed for each cost center and
  central office
• Serial numbers, model numbers and cost of initial
  purchase price
• Disposal of property- track all items to include
  how and when disposal was made transfer
  information is required to account for use of
  federal funds for allowable purchases
• Disposal may be by auction, request for proposal
  or scrapped
• Income earned from disposal is CNP revenue and
  required to be deposited to CNP

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Best Practices

• Complete monthly food/non-food inventory by cost
  center
• Monitor absenteeism
• Monitor on job injuries
• Evaluate cost center equipment needs
• Run monthly trial balance by cost center to
  determine financial status
• Check revenue and expenditures

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Best Practices

• Complete yearly lunch and breakfast school
  audits prior to January 1
• After school snack evaluations 2
• First within the first 4 weeks of start
• Second at another time in the year
• Must request permission prior to start

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Best Practices

• Complete food costs
• Complete non food costs
• Complete meals per labor hour per school
• Compete all purchases either by written or
  price quotes

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Best Practices

• What are your best practices?

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Financial Management