Grant Elementary School District Report

Food Service Review September 13, 2022 Grant Elementary School District Michael H. Fine Chief Executive Officer September 13, 2022 Edward Schneider, Superintendent Grant Elementary School District 8835 Swasey Drive Redding, CA 96001 Dear Superintendent Schneider, In March 2022, the Grant Elementary School District and the Fiscal Crisis and Management Assistance Team (FCMAT) entered into an agreement for FCMAT to conduct a review of the district’s food service pro- gram. The agreement stated that FCMAT would perform the following: 1. Examine the Food Service Department’s operations including, but not limited to, food preparation, meal service, student participation, staffing, federal and state compliance, menu planning, purchasing, warehousing and food storage, inventory and facilities, and make recommendations for improved efficiency, if any. 2. Evaluate the department’s workflow and distribution of functions, and make recommendations for improved efficiency, if any. 3. Review training and professional development programs for the department’s employees and managers, and make recommendations for improvement, if any. This report contains the study team’s findings and recommendations. FCMAT appreciates the opportunity to serve the Grant Elementary School District and extends thanks to all the staff for their assistance during fieldwork. Sincerely, Michael H. Fine Chief Executive Officer Michael H. Fine • Chief Executive Officer 1300 17th Street – City Centre, Bakersfield, CA 93301-4533 • Tel. 661-636-4611 • Fax 661-636-4647 www.fcmat.org Table of Contents Table of Contents About FCMAT ...................................................................................................ii Introduction ......................................................................................................iv Background ...........................................................................................................................iv Study and Report Guidelines ............................................................................................iv Study Team ............................................................................................................................iv Executive Summary ........................................................................................v Findings and Recommendations.................................................................1 Board Policies and Administrative Regulations .................................................1 Cafeteria Fund .........................................................................................................2 Staffing and Meals per Labor Hour .....................................................................5 Participation and Eligibility .....................................................................................8 Meal Program Compliance ...................................................................................10 Menus and Meal Service .......................................................................................12 Purchasing and Inventory .....................................................................................14 Personnel Activity Reports ...................................................................................16 Facilities and Equipment .......................................................................................17 Appendix .........................................................................................................19 Study Agreement ....................................................................................................19 Fiscal Crisis and Management Assistance Team Grant Elementary School District i About FCMAT FCMAT’s primary mission is to assist California’s local K-14 educational agencies to identify, prevent, and resolve financial, human resources and data management challenges. FCMAT provides fiscal and data management assistance, professional development training, product development and other related school business and data services. FCMAT’s fiscal and management assistance services are used not just to help avert fiscal crisis, but to promote sound financial practices, support the training and development of chief business officials and help to create efficient organizational operations. FCMAT’s data management ser- vices are used to help local educational agencies (LEAs) meet state reporting responsibilities, improve data quality, and inform instructional program decisions. FCMAT may be requested to provide fiscal crisis or management assistance by a school district, charter school, community college, county office of education, the state superintendent of public instruction, or the Legislature. When a request or assignment is received, FCMAT assembles a study team that works closely with the LEA to define the scope of work, conduct on-site fieldwork and provide a written report with findings and recommendations to help resolve issues, overcome challenges and plan for the future. Studies by Fiscal Year 90 80 70 60 50 40 30 20 10 0 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 FCMAT has continued to make adjustments in the types of support provided based on the changing dy- namics of K-14 LEAs and the implementation of major educational reforms. FCMAT also develops and provides numerous publications, software tools, workshops and professional learning opportunities to help LEAs operate more effectively and fulfill their fiscal oversight and data management responsibilities. The California School Information Services (CSIS) division of FCMAT assists the California Department of Edu- cation with the implementation of the California Longitudinal Pupil Achievement Data System (CALPADS). CSIS also hosts and maintains the Ed-Data website (www.ed-data.org) and provides technical expertise to the Ed-Data partnership: the California Department of Education, EdSource and FCMAT. FCMAT was created by Assembly Bill (AB) 1200 in 1992 to assist LEAs to meet and sustain their financial obligations. AB 107 in 1997 charged FCMAT with responsibility for CSIS and its statewide data management work. AB 1115 in 1999 codified CSIS’ mission. seidutS fo rebmuN About FCMAT Fiscal Crisis and Management Assistance Team Grant Elementary School District ii About FCMAT AB 1200 is also a statewide plan for county offices of education and school districts to work together locally to improve fiscal procedures and accountability standards. AB 2756 (2004) provides specific responsibili- ties to FCMAT with regard to districts that have received emergency state loans. In January 2006, Senate Bill 430 (charter schools) and AB 1366 (community colleges) became law and ex- panded FCMAT’s services to those types of LEAs. On September 17, 2018 AB 1840 was signed into law. This legislation changed how fiscally insolvent dis- tricts are administered once an emergency appropriation has been made, shifting the former state-centric system to be more consistent with the principles of local control, and providing new responsibilities to FCMAT associated with the process. Since 1992, FCMAT has been engaged to perform more than 1,400 reviews for LEAs, including school districts, county offices of education, charter schools and community colleges. The Kern County Superin- tendent of Schools is the administrative agent for FCMAT. The team is led by Michael H. Fine, Chief Execu- tive Officer, with funding derived through appropriations in the state budget and a modest fee schedule for charges to requesting agencies. Fiscal Crisis and Management Assistance Team Grant Elementary School District iii Introduction Introduction Background The Grant Elementary School District, established in 1885, is a single-school district located in Centerville, five miles southeast of Redding California. The district is governed by a five-member board of trustees. During the 2021-22 school year, the district served 618 students in grades transitional kindergarten (TK) through grade 8 and approximately 90 preschool students. The district’s general fund operating budget for 2022-23 is $7,560,064. For 2021-22, 118 students or 19.1% of the district’s student population, were identi- fied as eligible for free or reduced-price meals. The district participates in the School Breakfast and National School Lunch programs and offers breakfast and lunch to all students at no charge. Study and Report Guidelines In March 2022, the Grant Elementary School District and the Fiscal Crisis and Management Assistance Team (FCMAT) entered into an agreement for FCMAT to conduct a review of the district’s Food Service Department. FCMAT visited the district May 25 and 26, 2022 to conduct interviews with district, school, and cafeteria staff, observe cafeteria operations, and review documents. Following fieldwork, FCMAT continued to re- quest, review and analyze documents. FCMAT’s observations, analyses and recommendations are provid- ed in this report. FCMAT’s reports focus on systems and processes that may need improvement. Those that may be function- ing well are generally not commented on in FCMAT’s reports. In writing its reports, FCMAT uses the Asso- ciated Press Stylebook, a comprehensive guide to usage and accepted style that emphasizes conciseness and clarity. In addition, this guide emphasizes plain language, discourages the use of jargon and capitalizes relatively few terms. Study Team The study team was composed of the following members: John F Von Flue Roy Rico Chief Analyst FCMAT Consultant John Lotze FCMAT Technical Writer Each team member reviewed the draft report to confirm accuracy and achieve consensus on the final rec- ommendations. Fiscal Crisis and Management Assistance Team Grant Elementary School District iv Executive Summary Executive Summary The Grant Elementary School District’s board of trustees recognizes in its policies the value of providing students with adequate, nourishing food and intends for the district’s food service program to be self-sup- porting. Under board authority, the district established Fund 13, Special Reserve Fund, to account separate- ly for cafeteria revenues, expenditures and balances. FCMAT’s review of Fund 13 for 2019 through 2023 found that the district has historically maintained the food service program within its means and, although it projects deficit spending in the 2022-23 fiscal year, has a sufficient fund balance to cover its expected shortfall. The district does not consistently charge indirect costs to the food service program but could do so while still maintaining a fiscally solvent cafeteria fund. FCMAT observed the district offering both free breakfast and free lunch to all students. The district serves approximately 516 meals daily (as of April 2022) using 20.5 staff hours. FCMAT calculated the meals per labor hour (MPLH), an industrywide comparative measure, at 25.16, which is slightly less than the industry efficiency standard of 30. With the current staffing, the program has the capacity to accommodate in- creased participation and to resume standard meal counting in 2022-23 as required. Food program staff were clearly aware of their duties and responsibilities, though their current job descrip- tions did not reflect them. In addition, the district does not maintain Personnel Activity Reports as federally required. The FCMAT team found that the district is in compliance with meal production and nutrition stan- dards. However, students were required to take more than the minimum servings of fruit and/or vegetables, which increased food waste. The district leverages purchasing economy through its membership in the Mountain View Food Purchas- ing Cooperative and by purchasing United States Department of Agriculture (USDA) commodity products. Additional savings may be had by publishing bids, requesting proposals, or piggybacking on bids awarded to other districts. Opportunities exist for the program to increase participation through improved communication, additions to meal offerings, and changes to menus. In addition, to increase efficiencies, the district could achieve more control of inventory, alleviate storage challenges and support food processing by using its vendors more effectively. The program could also increase efficiencies in serving by using more self-serve and grab-and- go alternatives. Fiscal Crisis and Management Assistance Team Grant Elementary School District v Findings and Recommendations Board Policies and Administrative Regulations Findings and Recommendations Board Policies and Administrative Regulations The Grant Elementary School District’s board of trustees adopted Board Policy (BP) 3550: Food Service/ Child Nutrition Program in February 2008. The policy states that the board “recognizes that students need adequate, nourishing food in order to grow, learn, and maintain good health.” The policy also specifies that the food service program shall contribute to students’ nutritional well-being and the prevention of disease, and that food served should meet or exceed nutritional standards, be prepared in ways that are appealing to students, be served in appropriate portions, and be reasonably priced. The board of trustees also adopted BP 3551: Food Service Operations/Cafeteria Fund in February 2008, which states that the intention is for the food services program to be self-supporting and nonprofit. This policy authorizes the sale of meals, provides for the establishment of the cafeteria fund, encourages the procurement of supplies and equipment domestically, and requires annual reporting to the board on the program’s finances and compliance. In addition, the board adopted Administrative Regulation (AR) 3550 in September 2012 and AR 3551 in Oc- tober 2014 to provide further detail on and application of the corresponding policies. These policies and regulations were last reviewed in October 2020 and remain in compliance with current laws and are appropriate to the program’s operations. Recommendation The district should: 1. Continue to review and revise its board policies and regulations as needed to remain compliant with laws and up to date with board priorities and operational conditions. Fiscal Crisis and Management Assistance Team Grant Elementary School District 1 Findings and Recommendations Cafeteria Fund Cafeteria Fund As authorized by BP 3551, the district maintains a special revenue fund to account separately for cafeteria revenues, expenditures and balances. Such funds are authorized by the California School Accounting Man- ual (CSAM) and generally accepted accounting principles (GAAP). They are intended to be a self-balancing set of financial accounts segregated from other funds to account for special activities governed by specific laws, restrictions and purposes. This cafeteria special reserve fund is also known as Fund 13. Per BP 3551, the district should strive to make the food service programs self-supporting so that the reve- nues generated cover all expenditures for the program. In addition, Fund 13 should be maintained with an appropriate reserve in case extraordinary expenses occur or revenues fluctuate. FCMAT reviewed the district’s Fund 13 financial reports for the prior two years and the current year (2021- 22), and in the approved budget for 2022-23. Revenues Most revenues for the district’s food service program are received through participation in the School Breakfast and National School Lunch Program. Funds are also received from state and local sources. With COVID-19, the district took advantage of opportunities to expand food services, and as a result re- ceived significant additional federal funding. The district’s program revenues increased from $162,599 in 2019-20 to more than $260,000 in 2020-21 and beyond. This was mostly due to increased federal funding and participation as a result of offering free breakfast and lunch. State revenues increased from $3,756 in 2019-20 to approximately $24,000 in the subsequent years. Local collections for meals decreased from more than $100,000 in 2019-20 to less than $7,000 in 2021-22 because of the change to the Summer Seamless Option (SSO), under which the district served all meals to students for free. The Keep Kids Fed Act of 2022 was recently signed, extending support and flexibility for federal meal programs through the 2022-23 school year. Additional funds have been allocated in the state budget to increase reimbursement rates, support universal access to subsidized school meals, provide grants for kitchen infrastructure and implement best practices. Expenditures The table below shows the district’s food service fund expenditures and fund balances for the years re- viewed (amounts for 2022-23 are projected). audited actuals audited actuals estimated actuals budget 2019-20 2020-21 2021-22 2022-23 Expenditures Salaries and Benefits $107,869 $120,956 $139,219 $134,858 Supplies $61,331 $65,288 $102,000 $130,049 Services and Operating $3,006 $2,659 $7,781 $7,781 Capital Outlay $- $6,595 $- $- Other Outgo $- $8,650 $- $- Total $172,206 $204,147 $249,000 $272,688 Excess (deficiency) $2,952 $96,081 $16,900 $(9,438) Fiscal Crisis and Management Assistance Team Grant Elementary School District 2 Findings and Recommendations Cafeteria Fund The table shows that the district’s food service program has been self-sustaining during the period re- viewed. Although a deficit is projected for 2022-23, the fund reserve is sufficient to cover the shortfall with- out a contribution from other district funds. The district will need to monitor the expenditures in each category to ensure that they are managed appro- priately and that overall expenditures continue to stay within fund affordability. The most effective way to control food service employee compensation costs, the largest expense of the program, is by keeping the cafeteria staff efficient and productive. Employer costs, much of which are not locally controlled, are projected to increase in the foreseeable future. Minimum wages are set to increase from $15 per hour in 2021-22 to $15.50 and then to $16, respectively, in the two subsequent years. Cali- fornia Public Employees’ Retirement System (CalPERS) employer costs for 2021-22 were 22.91% of wages and are set to increase to 25.37% in 2022-23 before dropping slightly to 25.2% in 2023-24 and to 24.6% in 2024-25. In addition, costs for health benefits, negotiated locally, typically increase annually (see the Staff- ing and Meals per Labor Hour section of this report for staff efficiency calculations). Fund Balance The district’s cafeteria fund shows that the program was profitable in all but the 2022-23 budget year, and therefore increased its fund balance for each of those years. The result is that the food service program’s fund balance grew significantly to 66% of expenditures by 2020-21, and, even though total expenditures have increased, the fund balance is expected to remain at more than 50% of annual expenditures at the end of fiscal year 2022-23. Fund Balance 2019-20 2020-21 2021-22 2022-23 Beginning $34,711 $37,663 $133,744 $150,644 Ending $37,663 $133,744 $150,644 $141,206 Source: Annual Audits 2022-23 Approved Budget Percent of expenditures 22% 66% 60% 52% Reserves are needed to ensure sufficient funds are available to cover unexpected one-time costs or to provide time for adjustment when changes in revenues or expenses cause a budget imbalance; however, excess reserves can create issues as well. Title 7, Code of Federal Regulations, Section 210.14 (b) and the California Department of Education Nutrition Services Division (NSD) require school nutrition programs to limit net cash reserves so that they do not exceed three months’ average expenditures. No indirect costs were charged to the cafeteria fund for 2019-20 and no indirect costs were budgeted for 2021-22 and 2022-23. Charging indirect costs would reduce the fund balances remaining. Indirect Costs Indirect costs are defined in the CSAM as: . . . agency-wide general management costs not readily identifiable with a particular program but necessary for the overall operation of the agency (e.g., costs of accounting, budgeting, payroll preparation, personnel management, purchasing, warehousing, centralized data pro- cessing). The rate at which indirect costs can be charged is calculated as a percentage of indirect costs to direct charged program costs for a prior year, excluding some expenditures such as subagreements for services, capital expenditures, and other expenditures including transfers to other agencies and debt financing. Fiscal Crisis and Management Assistance Team Grant Elementary School District 3 Findings and Recommendations Cafeteria Fund Education Code (EC) Section 38101(c) limits district food service program indirect costs to the lesser of a district's indirect cost rate or the statewide average indirect cost rate. The following table shows the indirect cost rates for 2019-20 through 2022-23. Indirect cost rate 2019-20 2020-21 2021-22 2022-23 District 4.35 4.61 5.50 2.99 Statewide average 5.12 5.00 5.48 5.35 The district is allowed to charge the lesser of the two indirect cost rates, identified in bold, to expenditures in Fund 13, and to transfer the resulting funds to the district’s general fund. In doing so, the district can account for the full program cost through both expenses charged directly to the fund and those that are charged to the general fund but are necessary for the program to function. A review of the district’s records from 2019-20 through 2022-23 revealed that the district only captured indirect costs in 2020-21 in the amount of $8,650. No indirect costs were charged in 2019-20, nor were any budgeted for 2021-22 or 2022-23. Accordingly, the district did not attribute approximately $7,491 in costs for 2019-20, $13,645 for 2021-22, and $8,153 for 2022-23. Charging indirect costs helps capture the full and true cost of the program and can change the profitability and/or self-sustainability of the food service program as well as the program’s fund balance. Recommendations The district should: 1. Review funding support and increases and take advantage of opportunities to qualify for and obtain additional funds as they align with district priorities and needs. 2. Continue efforts to develop a self-supporting food service budget with an adequate reserve balance. 3. Calculate and charge Fund 13 indirect costs as appropriate and transfer those amounts to the general fund. Fiscal Crisis and Management Assistance Team Grant Elementary School District 4 Findings and Recommendations Staffing and Meals per Labor Hour Staffing and Meals per Labor Hour Staffing The Grant Elementary School District is a one-school TK-8 campus. Enrollment for the 2021-22 school year was 618, and the unduplicated percentage of students eligible for free or reduced-price meals (FRPM) was 19.1% according to the California Department of Education’s California Longitudinal Pupil Achievement Data System (CALPADS) report. The district participates in the School Breakfast and National School Lunch programs. Due to California Department of Education (CDE) COVID-19 Policy and Waivers in Child Nutrition Programs, the district operated the SSO meal program for the entire 2021-22 school year. Under the SSO, all students were offered a free breakfast and lunch. The district’s food service program has one kitchen and one cafeteria, so it needs to provide efficient meal service. All employees are in one place, and all food deliveries, storage, preparation, service and cleanup happen centrally. This arrangement should require fewer employees and fewer labor hours than a district that has many staffed sites and that needs to transport food. The study team observed both breakfast and lunch service. The lead cook reports at 6 a.m. to prepare breakfast and works until 2:30 p.m. The food service II employee reports at 7 a.m. for breakfast meal setup and works until 1:45 pm. The two food service I employees report at 9:45 a.m. and 10:15 a.m., respectively, to help with lunch meal service and cleanup; one works until 1:00 p.m. and the other until 1:15 p.m. Because the district operated under the SSO throughout the 2021-22 school year, identifying students at the point-of-service (POS) was not required. However, the district will return to standard meal counting for the 2022-23 school year because the COVID-19 waivers expired on June 30, 2022. Therefore, all students will need to be identified at the POS so the district can claim meal reimbursements. Job descriptions for the food service I and II positions are outdated. Information provided by the district indicates that they need to be revised to include current duties and responsibilities. A copy of the lead cook job description was requested but not provided by the district. It is essential to review and revise job descriptions to ensure that duties and job requirements are correctly identified. Meals per Labor Hour Because labor is usually one of largest expenses in a food service operation, it is important to ensure staff- ing ratios are adequate to meet department needs without being excessive. The Food Service Department consists of the following employees: Lead Cook 8 hours Food Service I 6.25 hours Food Service I 3.5 hours Food Service I 2.75 hours TOTAL 20.5 hours Meals per labor hour (MPLH) is an industry standard formula used to measure staff efficiency and to help determine the appropriate staffing levels in a food service operation. Normally, only labor hours for food preparation, cleanup and meal service are included in this calculation because it is a measure of the amount of labor used to prepare and serve the meals at schools. Management and clerical time are not nor- Fiscal Crisis and Management Assistance Team Grant Elementary School District 5 Findings and Recommendations Staffing and Meals per Labor Hour mally included. However, because many duties are shared and there is no clear separation of duties in the district’s food service program, all food service hours were included in the calculation for this report. FCMAT completed an MPLH analysis for the district’s school that analyzed the meals served in October 2021. October is the cut-off for prior year free and reduced-priced meal eligibility and new application pro- cessing, so the month normally provides an accurate snapshot of student participation. However, because the district operated under the SSO, in which all students were able to participate for free, an analysis was also completed for the month of April 2022. This was the most current month submitted to the state for reimbursement of total meals served for the month. MPLH is calculated in many ways, and it is important to be consistent in the method used. Breakfast is sometimes counted as a fraction of meal equivalent because it is simpler to prepare and serve. The dis- trict’s breakfast menus include many ready-to-serve items, but some items are also cooked on site; there- fore, breakfasts were each counted as one meal in this analysis. If the district had a la carte food sales, they would be converted into meal equivalents by dividing the total dollar value of the sales by an average of breakfast and lunch prices. This would be added to meal counts. However, the district does not have a la carte sales except for a few adult meals, so this was not included. In school food service, the best practice standard for efficiency is 30 MPLH. For the month of October 2021, the district had an average of 19.32 MPLH, indicating overstaffing. However, for the month of April 2022, the district increased its MPLH to 25.16. Meals per Labor Hour October 2021 April 2022 Days Served 20 16 Breakfasts per Month 1,426 1,630 Breakfasts per Day 71.3 101.88 Lunches per Month 6,494 6,623 Lunches per Day 324.7 413.94 Total Meals for Month 7,920 8,253 Total Meals per Day 396 515.81 Total Meal Equivalents 396 515.81 Labor Hours 20.5 20.5 Meals per Labor Hour (MPLH) 19.32 25.16 Recommendations The district should: 1. Ensure that the Food Service Department is prepared to return to standard meal counting in school year 2022-23. 2. Ensure that all students are properly identified by meal eligibility category for reimbursement purposes. 3. Review and revise the Food Service Department’s job descriptions to reflect the current job duties and requirements of each position. 4. Analyze MPLH regularly using an industry standard method of analysis. Fiscal Crisis and Management Assistance Team Grant Elementary School District 6 Findings and Recommendations Staffing and Meals per Labor Hour 5. Establish an MPLH goal and share it with food service staff. 6. Review the MPLH goal monthly with food service staff including variances in number of meals served and staff hours. Adjust staff hours to accommodate significant increases or decreases in meals served. Fiscal Crisis and Management Assistance Team Grant Elementary School District 7 Findings and Recommendations Participation and Eligibility Participation and Eligibility Beginning in the 2022-23 school year, California will become the first state to implement a statewide universal meals program for school children. Starting on July 1, 2022, EC Section 49501.5 requires public school districts, county offices of education, and charter schools that serve students in grades TK-12 to provide two meals free of charge (breakfast and lunch) during each school day to students who request a meal, regardless of their free or reduced-price meal eligibility. The CDE will reimburse local education- al agencies (LEAs) for all nonreimbursed expenses accrued in providing federally reimbursable meals to students, provided the LEA participates in the School Breakfast and National School Lunch programs and serves U.S. Department of Agriculture reimbursable meals. LEAs will still be required to abide by federal regulations and guidelines, because universal meals are meant to supplement, not replace, the federal school nutrition programs. Under EC Section 49501.5, the meal reimbursement amount will not exceed the difference between the federal and state free reimbursement rates. Additional state reimbursements will be provided for reduced-price and paid meals to ensure LEAs receive the same reimbursement for those meal categories as they would for meals served at the free reimbursement rate. More detailed information regarding the California Universal Meals Program can be found at http://www.cde.ca.gov/ls/nu/sn/cauniver- salmeals.asp The study team also compared the average number of meals served per day in October 2021 to participa- tion in school years 2019-20 and 2020-21. The analysis indicates an increase in participation, partly be- cause all students had access to free breakfast and lunch under the SSO program. For the 2020-21 school year, numbers for both breakfast and lunch were identical because the district provided curbside meal services by combining both breakfast and lunch, as allowed by COVID-19 waivers. Daily Average Number of Meals Served in October 2019-20 2020-21 2021-22 Breakfast 58 347 71 Lunch 288 347 325 In addition, FCMAT included April 2022 in the analysis. There was a significant increase in the average number of meals served in the months following October 2022, compared to the other two fiscal years. In April 2022, the daily average number of breakfasts and lunches served was 102, and 414, respectively. Daily Average Number of Meals Served in April 2021-22 Breakfast 102 Lunch 414 Rounding used in calculations. MPLH can be increased by increasing student participation or by reducing staff, and it often requires some of each. The most positive way to improve MPLH is to increase student participation. The district has had an increase in participation during the current fiscal year because it operates under the SSO, which allows all students to receive a free breakfast and lunch. Even though the district will return to standard meal counting for the 2022-23 fiscal year, it may continue to experience increased participation because of the California Universal Meals Program. Even though the district already has higher than normal meal participation, increases in participation will improve MPLH. Although food costs would increase proportionally, labor hours should not because the current number of labor hours could accommodate an increase in participation. Fiscal Crisis and Management Assistance Team Grant Elementary School District 8 Findings and Recommendations Participation and Eligibility The district could benefit from alternative ways to maximize participation. Many districts offer a midmorn- ing breakfast or second-chance breakfast during a nutrition break or passing time. This may help increase breakfast participation and thus improve MPLH results. This often works well because many students either arrive late or are not hungry before school but are much more interested in eating later in the morning. A method that may ensure that 100% of students in attendance participate is serving breakfast in the classroom. The main complaints about this method of service are messes in the classrooms and time taken away from teaching. These concerns have been overcome in districts that have successfully implemented this type of service. Ready to eat entrées, such as cereal bars, muffins and breakfast sandwiches, could be served along with fruit, juice and milk. Students can eat at their desks while teachers make morning an- nouncements and take attendance. Reimbursable breakfast meal counts can be completed when taking at- tendance. Some teachers use this time to give nutrition or health lessons, which can help fulfill the wellness requirements for nutrition in the classroom. Another breakfast alternative for middle school students is to offer a second chance breakfast at the morn- ing break. The Food Service Department could consider serving grab and go breakfasts in the quad area rather than having students come to the cafeteria. This is often a better alternative for this age group be- cause they frequently are not hungry first thing in the morning. This may not be a viable option for elemen- tary students because their lunch periods are much earlier and scheduling a midmorning breakfast would be difficult. However, this option could be considered if bell schedules can be arranged to accommodate it. Recommendations The district should: 1. Monitor closely the impact of the California Universal Meals Program on participation and operations. 2. Consider the following alternative methods to maximize student participation: • Provide breakfast alternatives such as grab and go meals, breakfast in the classroom, and/or a second chance breakfast. • Encourage students to participate in the program, especially breakfast, where partici- pation is very low. 3. Educate staff on how increased student participation can be beneficial to both the students and the program. Greater participation can increase the MPLH and help the program run more efficiently. Fiscal Crisis and Management Assistance Team Grant Elementary School District 9 Findings and Recommendations Meal Program Compliance Meal Program Compliance Meal Pattern Requirements The district participates in the School Breakfast and National School Lunch programs, which are regulat- ed by the USDA and the CDE. During federal reauthorization in 2010, regulations were updated with the most comprehensive changes to the program in 15 years. Initial guidelines became effective in the 2012-13 school year and have continued to become stricter. Section 9(a)(4) of the Richard B. Russell National School Lunch Act (NSLA) requires that school meals adhere to the latest Dietary Guidelines for Americans (Title 42 U.S. Code Section 1758(a)(4)). In addition, Section 201 of the Healthy, Hunger-Free Kids Act of 2010 amended Section 4(b) of the NSLA to require the USDA to issue regulations to update meal patterns and nutrition standards for school lunches and break- fasts based on recommendations issued by the Food and Nutrition Board of the National Research Coun- cil of the National Academy of Sciences. The following websites contain additional information regarding these regulations: www.fns.usda.gov/school-meals/healthy-hunger-free-kids-act www.cde.ca.gov/ls/nu/sn/nslp.asp The regulations seek to increase the fruits, vegetables, whole grains, and fat free and low fat milk on school menus; reduce the levels of sodium, saturated fat and transfat in school meals; and meet the nutritional needs of students within specified calorie requirements. The intent is to provide meals that are high in nutri- ents and without excessive calories, which better meets students’ dietary needs and protects their health. In addition to offering more fruits and vegetables, districts must offer a wider variety of vegetables, includ- ing specified weekly amounts of vegetable subgroups. These subgroups include dark green, red/orange, starchy, and legumes. Although this is nutritionally sound, it has complicated menu planning and, to some extent, hampered student acceptance. A full cup of fruit must be offered at breakfast for all grade levels. At lunch, one-half cup of fruit and three-fourths cup of vegetable must be offered to TK-8 students, and one cup of both fruit and vegetable must be offered to high school students. Students must take at least one- half cup of fruit or vegetable with both breakfast and lunch, regardless of whether they want it. Districts have experienced an increase in waste because of this requirement. Federal regulations require signs at the breakfast and lunch serving lines to inform students of what food items they must take. Signs must be placed in a visible location at or near the beginning of the serving line and must indicate what foods are part of the reimbursable meal so students can easily choose all the required food items in the appropriate quantities. The signs should include the number of choices of fruits or grains the student may select and the minimum requirements for offer versus serve (explained in detail in the Menus and Meal Service section of this report). The signs can be simple and generic or can include the specific foods served on the daily menu. Simple generic signs are usually the best option and are available for sale commercially. The district had the required signage posted above the serving line; however, it was in poor condition and posted where students could not readily see it. Based on the documents provided by the district and FCMAT’s observations of meal service, the district is offering the correct amount of fruits and vegetables, including the subgroups. However, some of the same fruits are repeated on the same day rather than giving students a variety of choices as the regulations Fiscal Crisis and Management Assistance Team Grant Elementary School District 10 Findings and Recommendations Meal Program Compliance intend. For example, during the study team’s meal service observations, USDA canned diced apricots were served for both breakfast and lunch on the same day. Recommendations The district should: 1. Purchase new required signs to inform students and parents of what food items are available and required for a reimbursable meal. Post the signs at the beginning of the serving line. 2. Make additional efforts to communicate with and educate students on meal requirements and to encourage their participation. 3. Offer a variety of fruits and vegetables, and not offer the same items at breakfast and lunch on same day. Fiscal Crisis and Management Assistance Team Grant Elementary School District 11 Findings and Recommendations Menus and Meal Service Menus and Meal Service National School Lunch Program participants must maintain meal production records that document the amounts and types of foods used to comply with federal and state regulations. To further review compli- ance in this area, the FCMAT study team requested copies of menus for every month of the current school year and copies of menu production records. Menus The district’s school menus are nutritionally adequate and acceptable under the NSLP regulations. All menus passed the criteria for the NSLP certification for having the proper items and serving sizes available daily at the last CDE administrative review in 2018. The menus follow the K-8 meal pattern, but there is no apparent pattern in how they are written. Only the main entree is listed on each day of the month for both breakfast and lunch, followed by a statement that a variety of fruits and vegetables will be offered for lunch, and an assortment of cereal and juices for breakfast. It is difficult for students and parents to determine the complete menu being offered on any given day. The lead cook writes the menus, and they include a combi- nation of items made partially from scratch and ready-made packaged items. Most school districts use a cycle menu system, in which menus are repeated in a specific time frame, such as every four weeks. In a cycle menu, the same items often appear on the same day of the week or the same week in the month so students can anticipate favorite menu days. Because some days are more pop- ular with students than others, a cycle menu helps the food service staff and manager establish a product use history, which in turn makes it easier to order the correct quantities of food products in advance. The district’s menu does not appear to follow a cycle. The only consistency seems to be pizza offered every Friday. Pizza for this day is purchased from a local pizza business and is delivered ready to serve. Es- tablishing a more routine cycle can create trust with students and can decrease the need to order and store more products. For example, a student will know that every Monday or every other Monday, one of his or her favorite items will be offered. Menus do have to be changed to adapt to the use of commodity items or good sales on products, but those can usually be included in the established cycle in the following month. Commodity items are goods that the USDA makes available to each district for a small fee. Each district is given a dollar allowance with which to purchase these foods. During interviews with staff there was some discussion of a desire to go back to more cooking from scratch. One popular item discussed was a brunch meal. Because of an increase in participation, and the fact that many good quality ready-made products are available, a combination of speed scratch or partial scratch cooking could be used along with ready-made packaged items. Speed scratch is when precooked prod- ucts, such as pre-cooked ground beef, are used, such as for tacos, nachos, and spaghetti. For food quality and more appeal, all menu possibilities need to be considered. Meal Service Offer versus serve is a meal planning option that allows students to decline some of the food items offered in a reimbursable meal. The goal is to reduce food waste and extra expense while allowing students to choose the foods they want to eat. At least five items must be offered at lunch and four at breakfast, and students may take all items offered; however, they are required to take only three items at each meal. Other than the requirement that one of the items be a fruit or vegetable, students may choose or refuse whatev- er they want provided they fulfill the meal requirement. Regulations require offer versus serve at the high school level, and it is strongly encouraged at other grade levels. Fiscal Crisis and Management Assistance Team Grant Elementary School District 12 Findings and Recommendations Menus and Meal Service The district uses offer versus serve, but it is not implemented properly. For example, at lunch every student was required to take a fruit from the fruit and vegetable bar at the end of the serving line. The menu pro- duction record for the day indicated four fruit offerings: fresh apples, canned diced apricots, applesauce cups, and raisins. The minimum requirement is for students to take a one-half cup serving of a fruit or vege- table. Forcing students to take a fruit when they already met the minimum requirement by taking a one-half cup of vegetable resulted in many servings being discarded. This also adds to food costs and labor costs. It would be beneficial for students and staff to be informed on what constitutes a complete meal. This could be accomplished in several ways. For example, the cafeteria staff could visit classrooms at the beginning of each school year and give a short lesson on this subject, especially to kindergarten students, or provide information to teachers so they can share it with students. Annual training on this topic with food service staff is also a best practice. When FCMAT visited the district, students were offered a choice of entree for breakfast: either a yogurt fruit parfait or cereal; juice, applesauce cups, raisins, diced apricots and milk were offered as other side options for breakfast. The parfaits were prepared from scratch and the cereal was in bowl packs. For lunch, the meal service includes two lines, each with a different entree option. Students have staggered lunch periods grouped by grade level. In one line, the students were offered a hot dog, and in the second line, a peanut butter and jelly sandwich, yogurt, cheese sticks, and crackers. Both lines were then directed to the fruit and salad bar so students could make their selections for fruits and vegetables. The staff mem- ber monitoring the salad bar also handed out each student’s milk choice. That person is also assigned to certify that each student selected all the required meal components, also known as the POS. However, the reimbursable meals are not recorded by the POS, as mandated under SSO. The CDE recommends using a tally sheet to document meals served at the POS. In interviews, staff indicated that a tray count is used for meal counting, which is not an approved method for accounting for reimbursable meals. A daily meal count tally sheet is completed, but not until after all meals have been served. COVID-19 waivers expired on June 30, 2022. Therefore, the district is required to return to standard meal counting. To claim reimbursement, all meals served must be accounted for by student eligibility. Therefore, the district needs to implement a POS system that accurately accounts for all meals. This function will slow down the serving lines. The district may need to purchase an additional terminal to account for all meals in an efficient and timely manner. Recommendations The district should: 1. Create a written menu format for public use (cafeteria posting and website) that is easy to read, is complete, and that lists all daily menu items. 2. Implement a four-week cycle menu. 3. Ensure that all food service staff are trained in offer versus serve requirements. 4. Ensure that the meal accounting system used is an approved method that accurately records reimbursable meals at the POS for all meal services. Fiscal Crisis and Management Assistance Team Grant Elementary School District 13 Findings and Recommendations Purchasing and Inventory Purchasing and Inventory Purchasing Purchasing is an extremely important function in a food service program. Goals for purchasing should be to acquire the best price for needed items and to use vendors that provide quality service. The best way to accomplish these goals is by implementing best practices and procedures for bids and quotes. Some districts have found it advantageous to form food service purchasing cooperatives with other districts to increase purchasing power and to decrease the administrative burden of duplicated paperwork. EC Section 38083 allows districts to purchase perishable foodstuffs and seasonal commodities needed to operate cafeterias in accordance with the rules and regulations adopted by the governing board, notwith- standing any provisions of the Education Code that conflict with such rules and regulations. The district is a member of the Mountain View Food Purchasing Cooperative. According to documents provided to FCMAT, the Enterprise Elementary School District is the lead district for this cooperative, with authority to contract for USDA foods and related services on behalf of member districts. The district does not publish bids or request proposals for any of the products used in the food service pro- gram. It purchases products from bids generated by the cooperative by signing a commitment letter at the beginning of the school year. Sysco Sacramento is the vendor that provides most of the food and supplies used in the program, including fresh fruits and vegetables. Producers Dairy is the district’s vendor for all dairy products. Although the Education Code and district regulations allow for these items to be purchased without a bid, districts often find they can obtain the best price and service by issuing a bid request or ob- taining quotes. Another purchasing option for the district is to piggyback on the bids of other districts. Piggybacking is au- thorized in Public Contract Code Section 20118 and allows school districts to make purchases using the bid awarded by another public agency or corporation if it is in the district’s best interest. The district earns entitlement funds to purchase USDA commodity products. A district’s donated food enti- tlement amount is the number of reimbursable lunches served during the previous fiscal year multiplied by the current per-meal value. The per-meal value for USDA foods is established annually in July by the United States Congress. For the 2021-22 school year, the per-meal value was 39.75 cents. Therefore, it is advanta- geous for districts to serve as many reimbursable lunches to students as possible. Districts can also send USDA commodities to processors who have been approved by the state or the USDA. Processors must meet specific requirements and are reviewed regularly by the state or the USDA. Processors are required to have an approved agreement on file to participate in the program. The agree- ment includes end product data schedules, a list of end products available, and nutrition and labeling information. Processing allows districts to better use USDA commodities by converting them into more convenient and usable items. Processing often makes the most efficient use of USDA foods by reducing waste, stabilizing food costs through portion control, providing a variety of food choices, and increasing food safety. Information from interviews with staff indicates that the district does not send commodities to processors for processing. Instead, the district receives a shipment of commodities from USDA offerings every three months. These deliveries are usually large and require extra storage space. Sending some commodities to a processor, such as beef and chicken, would mean that the processor would store the processed products until the district has placed them on their menus. Additional information and guidance on food commodity processing and use of entitlement funds can be found at https://fns.usda.gov/usda-fis/processor Fiscal Crisis and Management Assistance Team Grant Elementary School District 14 Findings and Recommendations Purchasing and Inventory Inventory The function of inventory is to help a food service department identify the items in stock and their costs and to determine how to best manage and control them. Some districts complete a physical inventory monthly, which helps control monthly food and supply costs, compare their costs to revenue, and produce a profit and loss statement to determine if financial goals have been met. Other districts operate a perpetual or continuous inventory system that helps them more readily monitor financial goals, determine replenish- ment needs, and identify losses due to product failure or theft. This type of inventory system typically uses inventory software to increase accuracy and efficiency. The FCMAT study team requested inventory records from the district, but none were provided. Therefore, FCMAT reviewed this area and made recommendations as if these documents were not recorded or creat- ed. Recommendations The district should: 1. Ensure that the Food Service Department is maximizing the cooperative’s purchasing power to secure food and supplies for the department. 2. Ensure that the Food Service Department uses its entire annual USDA commodities entitlement. 3. Consider commodity processing of some USDA items, in particular beef and chicken. 4. Ensure that the food service manager develops an inventory tracking system for all products used in the Food Service Department, to include pricing information for each item. Fiscal Crisis and Management Assistance Team Grant Elementary School District 15 Findings and Recommendations Personnel Activity Reports Personnel Activity Reports Personnel Activity Reports (PARs) are detailed documents that support the distribution of salary and benefit costs for employees who work in multiple programs. These reports identify the employees’ daily activity by hours or percentage of hours spent in each program. The federal requirements for PARs (Code of Federal Regulations Title 2, Part 225, Appendix B 8. h.) state that the documents must: • Reflect an after-the-fact distribution of the actual activity of each employee. • Account for the total activity for which each employee is compensated. • Be prepared at least monthly and coincide with one or more pay periods. • Be signed by the employee. • Not represent budget estimates or distribution percentages determined before the ser- vices were performed. In September 2012, the U.S. Department of Education approved a new system, called the Substitute System Based on Employee’s Predetermined Schedule, that can be used as a substitute for the usual PARs report- ing and that simplifies recordkeeping. Districts must meet specific criteria to qualify for this option. Alterna- tive documents, such as a predetermined work schedule, may be acceptable instead of PARs to document the time of an individual who works in multiple programs on a predetermined or fixed schedule. An employ- ee who documents time under this system is permitted to certify time periodically (at least semiannually) rather than monthly. This alternate method must be preapproved by the state before it is used. More infor- mation about this option and the substitute system based on sampling method may be found in the CSAM and on the CDE website at http://www.cde.ca.gov/fg/ac/co/timeaccounting2013.asp The district’s Food Service Department has a food service I/bus driver trainer who works 2.75 hours a day for the food service program and 5.25 hours a day for the district’s student transportation program. No PAR form was provided to FCMAT for this position. Recommendations The district should: 1. Review the services performed and hours worked by the food service I/bus driver trainer position that is funded from multiple sources, and ensure that salaries and benefits are charged to the correct accounts. 2. Ensure that all positions funded from multiple sources are properly documented by PARs as required by the CDE and federal regulations and that all documents are maintained for the state administrative review. 3. Ensure that any time accounting method used is approved by the CDE as needed and that federal regulations and procedures described in the CSAM are followed. Fiscal Crisis and Management Assistance Team Grant Elementary School District 16 Findings and Recommendations Facilities and Equipment Facilities and Equipment The FCMAT study team visited the district’s food preparation, serving, storage and multipurpose/eating areas. These areas were well organized, clean and maintained. Facilities and equipment were in working order and adequate for the district’s current production. Storage The food service program uses a variety of locations to store its equipment and food. The district has two walk-in refrigerators, two large stand-alone refrigerators, and a milk/beverage refrigerator. In addition to the storage areas connected to the food preparation and kitchen area, the program has two rooms adjacent to the multipurpose room that are used for storage of canned, dry and other nonrefrigerated items. The milk refrigerator unit is also kept in one of these two rooms. Although there is no excess space, these storage areas appeared to be sufficient to meet the needs of the program. In addition, options exist to ease the storage needs. For example, the department could request more frequent milk deliveries instead of just two per week. Serving Process The district serves food during one breakfast period and five lunch periods based on grade level group- ings. Breakfast is available for students in all grades as they arrive at school. Lunch is served based on grade groups and, at the time of observation, ranged from 10 to 30 minute windows. In alignment with BP 3550, which states, “the Board desires to provide students with adequate time and space to eat meals,” the FCMAT team observed that students had sufficient time and space to obtain and eat their meals within the allotted times. Upon entering the multipurpose room, students get in a single line to get their meals. On the day of obser- vation, the students had a main meal choice and two optional offerings from which to choose. Staff helped students with their selections, and students were served their choice. Once the main offering is obtained, students proceed to the fruit and vegetables cart, which offers several choices of raw vegetables, salad, and fruit. FCMAT observed some congestion and backup at this cart as students self-selected both type and quantity from the cart. In addition, staff clean up and replenish the cart after every meal period. To conclude the meal serving process, students passed by a table of condiments and milk. Staff take sufficient milk out of the refrigeration unit for each meal period and help students with their selections. Serving efficiency could be increased by reorganizing the serving process and by adding equipment. Op- tions that may increase efficiencies include: • Adding a second fruit/vegetable cart to allow an additional line of students and ease con- gestion. A second cart would also reduce the need for staff to replenish items between periods. • Bringing the milk refrigerator into the multipurpose room to allow the milk to stay refriger- ated at all times, reduce staff handling of product, enable student self-service of milk, and free the current storage space used by the milk refrigerator. Capital Expenses FCMAT reviewed the district’s financial reports and found that the district has only used cafeteria funds for capital expenditures in one of the four most recent years. It is appropriate and beneficial to use cafeteria Fiscal Crisis and Management Assistance Team Grant Elementary School District 17 Findings and Recommendations Facilities and Equipment funds to create efficiencies and maintain equipment in the food service program. Funds could be used to purchase a second fruit/vegetable cart as suggested previously, to update or improve existing equipment, and to add equipment to support food preparation options and efficiency. Recommendations The district should: 1. Continue to maintain food service program areas in a clean and well-organized manner. 2. Seek opportunities to ease storage needs through control of order volume and delivery timing. 3. Consider increasing serving efficiencies by purchasing and using an additional fruit/ vegetable self-service cart. 4. Consider increasing serving efficiencies and easing storage needs by placing the milk refrigerator in the multipurpose room for student self-service. 5. Regularly evaluate kitchen storage, preparation and serving processes, and purchase equipment that can improve efficiencies and serving options. Fiscal Crisis and Management Assistance Team Grant Elementary School District 18 Appendix Study Agreement Appendix Study Agreement Fiscal Crisis and Management Assistance Team Grant Elementary School District 19 Appendix Study Agreement Fiscal Crisis and Management Assistance Team Grant Elementary School District 20 Appendix Study Agreement Fiscal Crisis and Management Assistance Team Grant Elementary School District 21 Appendix Study Agreement Fiscal Crisis and Management Assistance Team Grant Elementary School District 22 Appendix Study Agreement 3/23/22 Fiscal Crisis and Management Assistance Team Grant Elementary School District 23