Page 9 - Lesson Plan Vol. 33
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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