Page 8 - Lesson Plan Vol. 33
P. 8

LUNCH MONEY LEFTOVERS:
                                                                                  STIRRING UP A                                              ALLOWABLE USES INCLUDE:                        If  a  school food authority (SFA)  has net cash

                                                                                                                                                                                            resources that exceed the six-month operating limit, it
                                                                                                                                                                                            will be notified by NYSED and must take action. The
                                                    SMART SPEND DOWN PLAN                                                            ►  Purchasing new equipment: Items such as stoves,     process is as follows:
                                                                                                                                        ovens, refrigerators, milk coolers, serving counters,
                                                                                                                                                                                             ►
                                                                                                                                                                                                Notification: NYSED will notify SFAs with an excess
                                                                                                                                        cash registers, tables, and chairs are acceptable.
                                                                                                                                                                                                fund balance via email after reviewing financial data
                                                                                                                                        Schools must follow proper procurement procedures
                                                                                                                                        for all equipment purchases.                            submitted by October 31 of each year.
                                                                                                                                     ►  Improving food quality:  This can involve adding     ►  Submit a plan: If notified, the SFA must submit a
                                                                                                                                        more  choices  to  the  menu,  using  higher-quality    plan outlining how it will spend down the excess
                                                                                                                                        ingredients,  or  purchasing  equipment  to  prepare    funds, with a target completion date by June 30 of
                                                                                                                                        fresher meals.                                          the current school year.
                                                                                                                                     ►  Marketing and promotion: Materials and supplies      ►  Justify extensions:  Any  request  for  an  extension
                                                                                                                                        to promote school breakfast and lunch programs are      beyond  the  June  30  deadline  requires  a  detailed
                                                                                                                                        an acceptable use of funds.                             justification for NYSED approval.
                                                                                                                                     ►  Hiring program personnel:  Staffing  costs  for      ►  Prevent reoccurrence:  The spending plan must
                                                                                                                                        employees who work directly in the school food          also include a narrative detailing how the SFA will
                                                                                                                                        service program are an allowable expenditure.           prevent an excess fund balance from accumulating
                                                                                                                                     ►  Investing in food service supplies:  This includes      in the future.
                                                                                                                                        general supplies, utensils, and other consumables    ►  Document all expenses:  Proper  procurement
                                                                                                                                        needed for the daily operation of the food service      procedures must be followed, and all spending must
                                                                                                                                        program.                                                be well-documented and auditable.


                                                                                                                                    NYS  and  federal  regulations  strictly  prohibit  using   For more guidance on managing your nonprofit food
                                                                                                                                    school food service funds for purposes unrelated        service account, additional resources are available on
                                                                                                                                                                                            the Child Nutrition Website Financial Management
           S     tarting in the 2025-2026 school year, all New    The  purpose  of  the  federal  limit  is  to  ensure  that  a    to  the  child  nutrition  program.  The  following  are   page.
                                                                                                                                    unallowable expenditures:
                 York State School Food Authorities (SFAs)
                                                                  school  cafeteria  operates  as  a  nonprofit  enterprise,
                 that participate in the federal school lunch     using its revenue to benefit the food service program              ►  Capital improvements:  Funds cannot be used
          and/or breakfast programs are required to provide       and not accumulate excessive funds.                                   for building construction, purchasing land, or                                      SHARI DIAMOND, CIA
                                                                                                                                                                                                                                      PARTNER
          reimbursable school meals at no cost to ALL students.   ►  Fund purpose: The funds should be used for the                     major renovations like plumbing, heating, or air
          The  State  will  reimburse  SFAs  up  to  the  combined   operation and improvement of the school food                       conditioning. These costs must be borne by the
          state and federal reimbursement rate for a free meal       service.                                                           district's general fund.
          for each federally reimbursed reduced-price and paid                                                                       ►  Non-food service items: The funds cannot be used
          meal claimed.                                           ►  Exceeding the limit: If a  school  food  authority                 for transportation, general curriculum materials, or
                                                                     (SFA)  exceeds  the  allowable  balance,  it  must
                                                                     submit a "spend-down plan" to its state education                  computers for instructional purposes.
          During the pandemic, all lunches were required to be       department detailing how the surplus will be used to
          free, and many schools experienced a surplus of cash       benefit students. Without an approved plan, the state           ►  Non-program-related costs: The funds cannot be
          in  their  school  lunch  fund  where  they  had  a  deficit   may take back the excess funds.                                used  for  staff  entertainment,  gifts,  incentives,  or
          in the past. The new law will likely put schools in a                                                                         general administrative costs not directly supporting
                                                                                                                                        the food service program.
          similar position with a positive ending fund balance;   New  York  public  schools  can  spend  down  excess
          however, schools are limited in how much funds can      operating funds from their school food fund by
          be maintained, generally capping at 3 months’ average   investing in cafeteria equipment, improving food
          operating  expenditures  from  the  food  service  fund   quality, or purchasing supplies directly related to the
          and are required to implement a plan to spend down      child  nutrition  program.  NYSED  requires  that  all
          excess funds. Effective July 1, 2024, the USDA has      expenditures be necessary, reasonable, and related to
          approved  NYSED  to  increase  the  net  cash  resource   the operation and improvement of the child nutrition
          limitation to 6 months average operating expenditures.   program.
          Per a memorandum from the Child Nutrition Program
          Administration dated August 25, 2025, the New York
          State Education Department (NYSED) will ensure
          compliance with net cash resources through annual
          reviews of SFAs' financial data. SFAs with 6 months
          or  more  excess  net  cash  resources  are  required  to
          submit an excess fund balance spending plan to SED,
    7     and notification will be sent beginning in November.                                                                                                                                                                                   8
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