SNG VESTA Substitute Natural Gas (SNG): a valuable option for

Food Service Operations

ValienteHernandez P.A. 13-1

The food service program operates as a fiscally sound and generally efficient system. Its commitment to providing good nutrition for the district’s students is perhaps best exemplified by the department’s sanitation conditions, food handling staff training programs, and its sincere efforts to serve only top-quality food.

Conclusion _____________________________________________________

The School District of Lee County Food Service Department operates within its own resources and without financial assistance from the general fund. Program management has kept up with the latest trends in food service, federal regulations, and management practices and as such, has had several accomplishments during the last three years as shown in Exhibit 13-1. For example, management reviews cafeteria performance three times a year for every school. However, there are areas where the district can realize improvements. For example, United States Department of Agriculture (USDA) evaluations have concluded that the district needs additional frozen food storage space. This problem still persists, since the district awarded an annual contract for approximately $31,000 to store USDA donated foods. Indeed, food storage is one area that would benefit from a cost analysis. Also, the department’s recent operating fund balance of $7,697,211, while exemplary, is greater than the Florida Department of Education’s guideline of a three month operating budget. District management has plans to address this issue.

Exhibit 13-1 The District Had Several Notable Food Service Accomplishments in the Past Three Years

In the past three years, the district has: • Developed, tested, and implemented a food service manager’s performance review program that monitors

cafeterias and promotes continual improvement (tested in 2000, implemented in 2001, refined in 2002). • Established performance levels for school food service programs to use in areas such as meal participation

and labor costs (completed in April 2002). • Installed the Computer Assisted Food Service (CAFS) program (completed in September 2001, networking

completed in May 2002). This is used for point-of-sale and has potential to be used for other areas of food service.

• Trained staff in the Serve-Safe sanitation program (August 2001). • Passed the School Meal Initiative review, which assesses compliance with nutritional standards (January -

April, 2002). • Developed a Five-Year Strategic Plan for food service (completed August 2001, first stage implemented July

2002). • Established kitchen equipment standards and implemented a plan to bring schools into full compliance with

these standards within five years (plan completed in 2001, budgeted funds increased in 2002). Source: School District of Lee County.


Overall, ValienteHernandez P.A. found that:

Efficient and Effective Operation 1. The food service program is clearly defined for school staff and customers with a mission statement,

operating policies, procedures, and performance expectations. (Page 13-7) 2. The district regularly reviews the food service program’s organizational structure, however, program

authority does not conform to federal law, state rule, and school board policy. (Page 13-8) 3. Food service employees receive comprehensive on-going training, which the department continually

evaluates and updates. (Page 13-9) 4. While the district has taken steps to identify barriers to the food service program, action is needed to

comply with competitive food sale rules. (Page 13-9) 5. The district has established cost-efficiency benchmarks to evaluate its food service program.

(Page 13-11) 6. The district regularly evaluates the food service program based on established benchmarks, and

implements improvements to increase revenues and reduce costs. (Page 13-12) 7. The district regularly evaluates the benefits of its food service operation and assesses alternatives for

service delivery. (Page 13-12)

Financial Accountability and Viability 8. The program’s budget is linked to and reflects departmental goals and projections. (Page 13-14) 9. The district’s financial controls include on-going reviews of the program’s financial and management

practices. (Page 13-15) 10. The district accurately reports meals served by category. (Page 13-16) 11. The district regularly evaluates purchasing practices to decrease costs and increase efficiency.

(Page 13-17) 12. The district has developed an effective inventory control system that is appropriate for its food service

program, however, methods of delivery and storage of food items should be reviewed. (Page 13-17) 13. The district has a system for receiving, storing, and disposing of food, supplies, and equipment.

(Page 13-17) 14. The district has a long-range plan for replacing equipment, but the program does not pay for all repair

and maintenance costs. (Page 13-18)

Meal Preparation and Service 15. The district provides school meals designed to meet the nutritional needs of students. (Page 13-19) 16. The district’s food production and transportation system ensures the service of high-quality food with

minimal waste. (Page 13-20)

Safe and Sanitary Food Service Environment 17. The district follows safety and environmental health practices and regulations. (Page 13-20)

Fiscal Impact of Recommendations _____________________

Implementing these recommendations has no direct fiscal impact, but will improve the efficiency and effectiveness of the district's food service program.

13-2 ValienteHernandez P.A.


Background _____________________________________________________

The School District of Lee County’s (the district) food service program had total revenue of approximately $18 million during the 2001-2002 school year, and served approximately 5.5 million lunches and 1.2 million breakfasts. The district manages the food service program at all 67 schools and provides services to three satellite locations. All students have an equal opportunity to participate in the program depending on their economic need as determined by USDA eligibility guidelines. Students either obtain their meals free, at a reduced price, or at full-price. The district participates in the offer versus serve option, giving all students the opportunity to select individual meal components while including minimum food components required as part of the USDA-approved program for reimbursable meals.

The district’s food service program is funded for an average of 46,266 meals per day, which is equivalent to $78,414 in federal reimbursement revenues. Exhibit 13-3 illustrates the food service program’s revenues and expenses for the last three fiscal years.

Organizational Structure As illustrated in Exhibit 13-2, the Director of Food and Nutrition Services manages the department’s supervisors in five key areas: technology, training/catering, food procurement, equipment, and warehouse/recycling. With the exception of one pilot school, cafeteria-level food service managers and assistants have been hired by, evaluated by, and report to each respective school principal.

Exhibit 13-2 Food Service Organization Chart

SupervisorWarehouse/Recycling

Food Service Supervisor

Food Procurement

Food Service SupervisorTechnology

Assistant Superintendent

Confidential Secretary Clerk Typist

1/4Schools

1/4 Schools

1/4 Schools

1/4 Schools

Mail Clerk Assistant Mail Clerk

Couriers

Food Service Clerk Specialist

Manager Interns

Managers on Assignment

Director

Food Service SupervisorEquipment


Training/Catering

Food Service Stock Control

Specialists

Food Service Workers

Food Service Worker

Central Services Snack Bar Manager

Food Service Manager (Bonita Middle Pilot)

SupervisorWarehouse/Recycling


Food Procurement

Food Service SupervisorTechnology

Assistant Superintendent

Confidential Secretary Clerk Typist

1/4Schools

1/4 Schools

1/4 Schools

1/4 Schools

Mail Clerk Assistant Mail Clerk

Couriers

Food Service Clerk Specialist

Manager Interns

Managers on Assignment

Director

Food Service SupervisorEquipment


Training/Catering

Food Service Stock Control

Specialists

Food Service Workers

Food Service Worker

Central Services Snack Bar Manager

Food Service Manager (Bonita Middle Pilot)

Source: School District of Lee County.



Sources of Revenue The food service program is funded through a combination of federal and state reimbursements, federally donated foods, and cash sales. As shown in Exhibit 13-4, for fiscal year 2000-01, federal and state reimbursements accounted for 56% of total program revenue. Cash sales represented 43% of revenue, with interest adding 1%. Food accounts for 37% of total expenditures and salaries and benefits account for 47% of total expenditures. These are generally accepted percentages for the school food services industry.

Fund Balance According to the food service director, over the past twenty years, the food service department’s leadership team has worked to ensure that the program is self-sufficient and has gradually added to the fund balance, increasing it from $666,000 in 1982 to $7,697,000 at the end of 2001. This fund balance represents a reserve that would cover 4.7 months of operation. The allowable fund balance amount by federal rule is three months of operating expenses or about $4.9 million for this district. The district plans to reduce its fund balance by investing in food service equipment, professional and technical services, and several other projects to improve operations.

Exhibit 13-3 The School District of Lee County Food Service Department’s Financial Statements

FY ending June 30, 1998




Dollars Percentage of Revenue Dollars

Percentage of Revenue Dollars


Percentage of Revenue

Revenues National School Lunch Act $8,039,559 51% $8,282,786 48% $8,540,007 48% $9,201,538 50% USDA donated food 685,469 4% 752,518 4% 628,388 4% 747,191 4% State Breakfast Supplemental 220,583 1% 187,764 1% 169,332 1% 169,706 1% State School Lunch Supplement 213,117 1% 213,132 1% 209,890 1% 205,961 1% Miscellaneous state sources 7,280 0% 7,150 0% 7,150 0% 7,280 0% Interest, including profit on investments 78,298 0% 147,263 1% 195,544 1% 269,675 1% Student lunches 3,004,781 19% 2,994,002 18% 3,169,943 18% 498,008 17% Student breakfasts 117,835 1% 133,067 1% 140,976 1% 141,360 1% Adult breakfast/lunch 460,401 3% 509,216 3% 493,876 3% 498,008 3% Student and adult a-la-carte 2,995,876 19% 3,755,047 22% 3,955,382 22% 3,969,777 22% Other Food Sales 26,520 0% 110,8991 1% 108,935 1% 69,108 0% Total revenue $15,849,720 99% $17,092,843 100% $17,619,422 100% $18,460,197 100% Expenditures Salaries $5,152,740 35% $5,455,256 34% $5,619,885 35% $5,973,675 36% Employee benefits 2,128,594 14% 2,125,822 13% 1,764,854 11% 1,757,626 11% Purchased services 115,874 1% 90,035 1% 90,549 1% 100,173 1% Energy services 2,809 0% 2,729 0% 4,077 0% 4,381 0% Material and supplies2 6,848,181 46% 7,572,868 47% 7,357,753 46% 7,602,960 46% Capital outlay 48,656 0% 123,079 1% 28,486 0% 122,956 1%







Dollars Percentage of Revenue Dollars



Percentage of Revenue

Other expenses 511,079 3% 769,481 5% 924,260 6% 787,168 2% Other capital outlay 101,291 1% 82,504 1% 275,561 2% 159,297 1% Total expenditures $14,909,223 100% $16,221,773 100% $16,065,425 100% $16,508,235 100% Net operating income (loss) 940,497 871,070 1,553,997 1,951,962 Fund balance, end of year $3,319,931 $4,191,251 $5,745,248 $7,697,211 1 Includes cash in lieu of donated foods and miscellaneous local sources of revenues. 2 Includes food. Source: School District of Lee County Comprehensive Annual Financial Report as of June 30, 1998, 1999, 2000, 2001.

Nutritional Programs The district participates in the National School Breakfast and National Lunch programs, which are regulated by the United States Department of Agriculture (USDA). These programs assist states through grant-in-aid and other means, such as menu design, and in establishing, maintaining, operating, and expanding school feeding programs. The purpose of these federal programs is to safeguard the health and well-being of the nation’s children, as well as to provide and encourage the consumption of nutritious domestic agricultural commodities (USDA donated foods).

These breakfast and lunch programs are administered through Florida’s Department of Education and Department of Agriculture and Consumer Services. Each school district executes an annual agreement with these state agencies to operate the programs at the local level. The school board, superintendent, and the food service department share local responsibility for program administration within the district.

As a participant in these programs, the district receives monthly federal reimbursement income for the free, reduced, and paid breakfast, lunch, and snack meals it serves. Quarterly, the state of Florida also adds required partial matching funds to supplement breakfast and lunch meals. Exhibit 13-4 shows the federal reimbursement rates for the National School Lunch Program for School Year 2001-02. Based on relative economic need, districts either receive a standard reimbursement of $0.20 or $0.22 for each lunch meal served, plus additional monies based on the number of free and or partially paid (called “reduced”) meals served. Lee County receives the $0.22 reimbursement rate. Students pay the full, reduced, or free meal rate based on family economic conditions as set by the USDA.

Exhibit 13-4 Meal Reimbursement Rates and Fees for School Year 2002-03

Meal Federal Assistance Fees Paid by

Student Program Total

Revenue 1 Elementary School Full price Breakfast Lunch

$0.22 $0.22

$0.55 $1.60

$0.77 ²

$1.82 Reduced price Breakfast Lunch

$0.22 + $0.65 $0.22 + $1.54

$0.30 $0.40

$1.17 ²

$2.16 Free Breakfast Lunch

$0.22 + $0.95 $0.22 + $1.94

0 0

$1.17 ²

$2.16



Meal Federal Assistance Fees Paid by

Student Program Total

Revenue 1 Middle and High School Full price Breakfast Lunch

$0.22 $0.22

$0.60 $1.85

$0.82 ²

$2.07 Reduced price Breakfast Lunch

$0.22 + $0.65 $0.22 + $1.54

$0.30 $0.40

$1.17 ²

$2.16 Free Breakfast Lunch

$0.22 + $0.95 $0.22 + $1.94

0 0

$1.17 ²

$2.16 1Quarterly, the state pay pays partial matching funds to the district. For School Year 2001-02 this approximated $0.07 per lunch served. ²In schools classified as severe need, the federal program provides an additional $0.23. Source: U.S. Department of Agriculture.

Although somewhat different rules apply, breakfast meals are similarly funded based on each school’s participation rates and the economic need of its students. The state requires that all elementary schools provide a breakfast opportunity to students while supplementing some of this cost.

Exhibit 13-5 The District Has a High Percentage of Students Receiving Free and Reduced Meals Compared With Peer District Averages School District Student Population

Schools Serving Student Lunches

Free/Reduced Participation

Overall Participation

Lee 54,906 68 45.8% 68.5% Brevard 68,469 102 35.5% 64.2% Pasco 46,458 59 49.9% 62.8% Polk 77,354 130 54.1% 64.9% Seminole 58,458 60 43.8% 41.5% Volusia 59,407 73 43.3% 61.3% State average - 45.9% 66.5% Source: Profiles of Florida School Districts 1999 - 2000, Florida Department of Education student database.

In addition to federal meal income reimbursements, the district also receives free food through the United States Department of Agriculture (USDA) Donated Food program. The USDA issues dollar allocations of free surplus food items, which the district then orders from the USDA catalog. Available in commercial-sized packages, commodities are classified into two categories:

• Group A commodities: meat, fish, poultry, fruits, and vegetables • Group B commodities: grains, oil, shortening, cheese, and peanut products

Receipt and storage of goods USDA ships foods to its regional storage facility. The district is allowed free storage at this facility for thirty days. As space becomes available or need occurs, the district transfers the food to their warehouse for further distribution to the schools.

Most purchased food is received at the central warehouse or a district’s leased facility based upon warehouse space availability. Dairy and vegetable vendors deliver directly to each school.



Methodology ____________________________________________________

To determine if the district’s food service program meets the Best Financial Management Practices, ValienteHernandez P.A. conducted seven school site visits, reviewed program documentation and self-assessments completed by the Food Service Director and supervisors, and interviewed the director, supervisors, managers, and support staff.

To receive program input, ValienteHernandez P.A. conducted a teachers’ focus group as well as a principals’ focus group. A public forum and telephone hotline were useful in receiving community input. Additionally, surveys were sent to teachers, principals, and board members with questions geared to the specific group surveyed. The results are used in this chapter, where applicable.

Based on district size and student characteristics, the peer districts selected for comparative purposes are Brevard, Pasco, Polk, Seminole, and Volusia.

Efficient and Effective Operation

1 The food service program is clearly defined for school staff and customers with a mission statement, operating policies, procedures, and performance expectations.

The mission of the Lee County Food Service Program is “to provide meals that nourish children, enhancing their readiness to learn within federal and state guidelines and without the use of district funds”. This message appears on the district’s web site, internal correspondence, and school menus. The mission guides program management in a clear direction.

A comprehensive food service policies and procedures manual is available to school cafeteria managers, principals, and the director of every department that interacts with food services. Updated annually, the manual clearly states what is expected of food service personnel and has background information about the National School Lunch Program, general policies, meal and cash accountability procedures, purchasing and inventory procedures, training, and equipment and facility management. During site visits, food service managers stated that the manual is very useful. Observations also confirmed that managers use the manual on a routine basis.

The food service program has clear goals, measurable objectives and performance expectations. For example, the department assesses fiscal performance, record keeping compliance, customer service satisfaction and food storage and handling. Each of these areas is assessed using an established performance review, mechanism that includes expected performance standards.

The district tracks management data, such as the program’s financial status at the school and district level, and student participation rates, meals per labor hour and other related indices to ensure the program’s performance meets established expectations and uses this information to set and track performance expectations.



2 The district regularly reviews the food service program’s organizational structure, however, program authority does not conform to federal law, state rule, and school board policy.

The district’s food service department staff is well qualified to manage the program. The director has over 20 years experience in school food service and holds an Ed.D. from University of South Florida in Educational Leadership, an MS from Florida State in Home Economics Education and a BS from Milwaukee-Downer College in Food and Nutrition. She is certified in School Food Service from the Department of Education and from the American School Food Service Association. She has also served as President of the Florida School Food Service Association. The supervisor of food procurement is a Registered Dietitian with an MS in Human Resources from Barry University. Supervisors of training and technology have BS degrees from accredited institutions. The supervisor of equipment is a certified chef. All school-based managers have high school diplomas or GEDs and have completed the internship-training program.

The food service organizational chart accurately represents the department’s structure and authority levels, however roles and responsibilities need to be changed to conform to federal laws, state rules, and school board policy Participating schools must comply with National School Lunch Program regulations. If districts do not comply, there is a risk of losing federal funding. Although the district’s food service director is ultimately responsible for compliance with federal law, state rule, and school board policy, ValienteHernandez P.A. found that principals have assumed authority over food services employees. The district needs to reinforce food service director authority and clarify school principal responsibilities to support the food service program and procedures. The authority described in the district job descriptions are in compliance with federal law, state rule, and school board policy, but are not followed in practice. For example, several principals have hired unqualified cafeteria managers despite objection by the food service director. In addition, principals have directed on-site food services staff to violate food program policies and procedures.

Staffing adjustments are made early in each school year to prevent overstaffing Food service supervisors review staffing levels for each school during the first and fourth months of the school year, making adjustments as needed. School districts usually estimate enrollment at the beginning of the school year (typically these estimates are on the high end). Food service staff uses this information to estimate staffing levels needed to start the new school year (typically on the low end). In October, enrollment and meal participation stabilize, giving the district the opportunity to adjust staffing levels. Peer districts surveyed also had this practice in place.

Recommendations ____________________________________________ • We recommend the district comply with federal laws, state rules, and board policies by

reinforcing appropriate authority over the program.

Action Plan 13-1 describes the steps necessary to implement these recommendations.



Action Plan 13-1 Establish Compliance with Federal Laws, State Rules, and Board Policies by Reinforcing Appropriate Authority Over the Program Strategy Comply with federal laws, state rules, and board policy by reinforcing appropriate

authority over the program. Action Needed Step 1: Conduct a meeting with the Food Service Director, Assistant Superintendent for

Operational Support Services, and the superintendent to delineate food service program authorities, responsibilities and requirements.

Step 2: Communicate authorities, responsibilities and requirements for food service positions to the principals and to the personnel officer.

Step 3: The Food Service Director, Assistant Superintendent of Operational Support Services, and the superintendent take steps necessary to ensure that district management actively supports food service program policy.

Who is Responsible Superintendent, Assistant Superintendent for Operational Support Services, and the Food Service Director.

Time Frame June 30, 2003 Fiscal Impact Can be attained within existing resources. When implemented, the district will be assured

that schools are in compliance with the federal regulations for NSLP funding, the loss of which would have substantial negative financial impact.

3 Food service employees receive comprehensive on-going training, which the department continually evaluates and updates.

Training is an important aspect of any food service organization. To fulfill this need, the district has established and follows a formal food service staff-training plan. The program begins when an employee is hired and continues throughout his/her career with training, including: new employee training, all employee in-services, manager in-services, manager meetings, intern program, intern follow-up program, culinary techniques for healthy school meals, ServSafe training, ASFSA Healthy Edge series, Computer Assisted Food Service (CAFS), AFS training, and other courses developed with the district’s staff development department. Each training component has clear objectives, activities, and outcomes. Competencies are clearly defined for new employee training, intern training, intern follow-up training, in-services, and manager meetings. Each training component uses a form of evaluation to document its effectiveness. The comprehensive training provided for all employees has been developed to include all of the essential components required. The training is on-going relative to the employee’s need and position. Specialized training is provided for manager interns.

4 While the district has taken steps to identify barriers to the food service program, action is needed to comply with competitive food sale rules.

The district has identified meal participation barriers such as long waiting lines, lunch period times, bussing, food preferences, and quality. To help reduce barriers during the school year, advertisement promotions and surveys are used to encourage feedback about students’ meal preferences. Food service administrators also encourage students to have healthy eating habits and to participate in the school food service program. The department promotes and communicates the food service program and good nutrition habits to parents using billboards, the district’s web site, by sending menus home with students, and during open house at the schools.

Although the district lunch participation rates are the highest compared to peer districts as shown in exhibit 13-6, the district can further improve by considering additional methods to help identify barriers



and increase student participation. Suggestions include forming student committees to assist with menu planning, seeking media exposure, and seeking input from parents and other interested persons at parent-teacher meetings.

Exhibit 13-6 The District’s Lunch Participation is the Highest Compared to Peer Districts

School District Student Population Average Daily

Lunch Participation Rates Lee 54,906 68% Brevard 68,469 64% Pasco 46,458 62% Polk 77,354 64% Seminole 58,458 41% Volusia 59,407 61% Peer Average 62,029 59% Source: Profiles of Florida School Districts 1999 - 2000, Florida Department of Education student database.

Sufficient neutral and negative results of the surveys conducted by ValienteHernandez P.A. indicate the district should continue to identify meal participation barriers (Exhibit 3-7) since teachers can have an effect on student participation and also reflect student opinion.

Exhibit 13-7 Survey Results Indicate the District Should Continue to Identify Meal Participation Barriers and Eliminate Them

Survey Group Statement

Strongly Agree or

Agree Neutral

Strongly Disagree or

Disagree Don’t Know

Teachers

Students usually have positive opinions regarding the meals served 41% 22% 29% 9%

Source: Surveys conducted by ValienteHernandez P.A., June 2002.

The district promotes balanced meals through its pricing policy Food prices in school cafeterias give students the incentive to buy complete meals rather than buying a-la-carte items. A-la-carte items such as cookies, ice cream, and potato chips are priced substantially higher to discourage students from purchasing one item instead of buying one full meal. This arrangement also financially benefits the district since it is not reimbursed for a-la-carte items through federal and state programs.

Barriers to meal participation violate board policy at one school ValienteHernandez P.A. visited seven district schools during site visits. Six of the schools visited appeared to be following procedures to minimize competition to reimbursable school meals. One high school operates soda vending machines near the cafeteria during the meal period. This is not only a barrier to meal participation, but does not offer nutritional value to students. When available, students may prefer carbonated drinks over nutritious beverages.

During the course of this review, the school board approved a competitive food policy for the district. The policy prohibits the sale of all competitive food or beverages on school premises except food or



beverage items that make a nutritional contribution to the reimbursed meal. Sale of competitive foods or beverages by other than food service is prohibited until after school hours. The new policy will reduce at least one of the major barriers to meal participation and protect the nutrition integrity of the program.

The program has made sufficient efforts to get customer feedback The School District of Lee County seeks district-wide customer feedback about its food service operation. Some cafeteria employees stated that customer feedback is only informally solicited. One method the district uses to seek customer feedback is a website that encourages questions, comments, and suggestions.

Recommendations ____________________________________________

• We recommend the district ensure compliance with its own policy and eliminate competition with the food service program and encourage nutritional foods choices for students. Non-nutritious carbonated beverages should only be sold in vending machines when allowed, and should be placed away from the cafeterias.

Action Plan 13-2 describes the steps necessary to implement this recommendation.

Action Plan 13-2 Eliminate Competition With the School Lunch Program and Bring the District Into State and Federal Compliance Strategy To eliminate competition with the school lunch program and bring the district into district

compliance. Action Needed Step 1: Identify schools with vending machines containing unauthorized foods and

beverages. Step 2: Food Service Director meets with school principals and cafeteria managers to

arrange for removal or proper operation of the machines. Step 3: Periodically review policies and procedures relating to vending machine access

and inspect facilities for compliance. Who is Responsible Food Service Director Time Frame January 31, 2003 Fiscal Impact Recommendation can be implemented within existing resources.

5 The district has established cost-efficiency benchmarks to evaluate its food service program.

The district has established benchmarks with exemplary school districts that are appropriate, reasonable, well-defined, and based on high standards, including cost-per-meal and overall reduced, and free meal participation for breakfast and lunch programs. The district also uses benchmarks to evaluate program labor costs. Participation levels (i.e. breakfast, lunch, a-la-carte) for each school are compiled and reported to management for comparisons. The district also developed internal standards to evaluate its performance. These standards are used in conjunction with each school cafeteria performance review and communicated to the food service managers. Benchmarking results are evaluated by the food service program personnel, but are not communicated to board members. Board members should be provided an annual update on program performance to complete the accountability cycle.



The district continually assesses program performance The district has established and implemented strategies to continually assess the reliability of program performance and cost data. Reliability of meal count and participation data comes from daily comparison of plate counts and meals served at the school level, edit checks via CAFS program at the school level, monthly edit checks in the district’s office, and edit checks by financial accounting. These assessments ensure no more meals than allowable are claimed.

6 The district regularly evaluates the food service program based on established benchmarks, and implements improvements to increase revenues and reduce costs.

Designated district supervisors conduct scheduled performance reviews of each cafeteria in January, April, and September. Annually, for each school managers complete facilities’ rating charts used for feedback on equipment performance and collect data for budgeting. School management reviews school lunch applications to ensure compliance with federal ratings charts completed by managers, as well as for useful feedback. The Lee County Department of Health Services inspects school cafeterias four times a year. Monthly management reports assess productivity and meal service, benchmarking performance with similarly sized districts, and with privatized districts. Lee County averages 15 meals per labor hour, which is comparable to the other peer districts. The annual budgeting process also uses annual district wide performance information to establish new budgets, along with updated goals and objectives, and uses this information combined with benchmarks, to guide needed operational changes.

The district should ensure that policies and procedures meet school’s varied needs Site visitors observed several schools using disposable plates and utensils. The food service managers explained this was because of staff shortages. According to the department’s ServiceWare policy, disposables should only be used when dishwashers break down for meals served in the cafeteria. The schools indicated violated policy although dishwashers were operable. Management is advised to reconsider its policy and allow cafeteria managers discretion under such circumstances.

7 The district regularly evaluates the benefits of its food service operation and assesses alternatives for service delivery; however, methods of delivery and storage of food items needs further review.

The food service department has assessed product delivery alternatives such as contracting and privatizing services Generally, the district has developed alternatives to ensure continued service delivery instead of eliminating services. Analysis of operational alternatives is important to ensure efficient operations. For example, during the remodeling of North Fort Myers Academy of the Arts, its food program was continued with the cooperation of two other schools, each school preparing specific components of the breakfast and lunch for the academy. During that time, the district was able to maintain the expenses for the academy as a separate school so financial data could be tracked.

The district has also added revenue to it program from several service delivery alternatives. For example, the district became a sponsor of the Summer Feeding Program in the summer of 2001. This program focuses on providing low-income children adequate meals during the summer months. Through



sponsoring the program, participation has grown and revenue increased. District schools also provide catering services for school-based functions and the district’s central service snack bar. School-based catering has declined slightly over the past three years, but central facility catering has increased. Additionally, school programs provide food for after-school programs through the federally-funded snack program and to Child Care of South West Florida which operates on days regular school is not in session.

The district periodically completes analysis studies of the privatization of food service management. Results have consistently reflected that the program can be more economically managed in-house than by contract.

However, ValienteHernandez P.A., in conjunction with the food service director, determined that the district may not have adequate warehouse space in the central warehouse for frozen food items. The district’s five-year strategic plan recognizes the need for additional freezer space in the central warehouse and budgets for additional frozen storage space, but the staff has not conducted a recent and thorough cost analysis of the food program warehouse and delivery system. Prior to 1998, the district conducted an analysis to determine if the district could more efficiently purchase and deliver all non-refrigerated food items from the warehouse to the cafeterias, however, this analysis did not address refrigerated and frozen food item storage and delivery. Such an analysis should be conducted before fund expenditure to evaluate short- and long-term needs, as well as to determine if contract storage is a viable option.

Recommendations ___________________________________________

• We recommend a comprehensive cost analysis to determine the most cost-effective methods for the storage of frozen and refrigerated food items.

Action Plan 13-3 shows the steps necessary to implement this recommendation.

Action Plan 13-3 Complete a Comprehensive Cost Analysis to Determine the Most Cost-effective Methods for Storage of Frozen and Refrigerated Food Items Strategy Complete a comprehensive cost analysis to determine the most cost-effective methods for

storage of frozen and refrigerated food items. Action Needed Step 1: Food service management and staff should forecast future frozen and

refrigerated foods storage needs and estimate equipment and construction to meet identified needs.

Step 2: Food service staff should solicit estimates for contracting refrigerated and frozen food storage.

Step 3: Food service staff should estimate and evaluate food delivery implications and costs associated with each option.

Step 4: A committee comprised of the Food Service Director, Food Procurement Supervisor, Warehouse Supervisor, and Assistant Superintendent for Operational Support should meet, compare alternatives, and select the most efficient and effective long-term method of service delivery, and to consider equitable funding of any investment using all or some food service and general funds.

Step 5: Obtain board approval through the budgeting process. Who Is Responsible Food Service Director Time Frame June 30, 2003 Fiscal Impact Recommendation can be implemented within existing resources, however, program

changes have the potential to minimize operational costs.



Financial Accountability and Viability

8 The program’s budget is linked to and reflects departmental goals and projections.

Food service budgets are based on goals, projected school enrollments, anticipated revenues from local, state, and federal sources, anticipated food and supply costs, and identified equipment and supply needs. Trend information is reviewed and anticipated numbers of economically needy students in each school are considered. The food service supervisor maintains the budget and makes projections for school cafeterias, which are occasionally reviewed, but not by anyone outside of the department. Without regular monitoring, however, budget adjustments cannot be anticipated and must be made as needed after-the-fact, rather than as a result of planning.

Timely financial reports are essential to evaluate the program’s budget and make the necessary adjustments Food service management reports reflect the overall financial status of the food service program as well as limited information about each school’s food program status. The finance department generates an overall financial report that is utilized by the food services department to develop the management reports for individual cafeterias. Supervisory staff uses these individual reports as a tool to review each cafeteria’s meal participation and financial status. Also, cafeteria managers use this report to manage daily operations. Cafeteria managers have expressed concern over the lack of timeliness of these management reports (should be no later than 1 month old). This lack of timeliness limits management’s ability to make informed decisions and operate an efficient program.


• We recommend that the finance department provide financial reports to the food service department in a timelier manner to ensure that cafeteria managers have an opportunity to review and utilize the information for efficient management of daily operations.

Action Plan 13-4 shows the steps necessary to implement this recommendation.

Action Plan 13-4 Food services department and the cafeteria managers receive timely financial data Strategy Ensure the food services department and cafeteria managers receive timely financial data

to assist with review of meal participation and financial status, as well as to manage daily operations.

Action Needed Step 1: Form a committee with the Finance Director, Food Service Director, food service supervisory staff, and a cafeteria manager representative

Step 2: Develop a timeline for submission of management reports by the Finance Department

Step 3: Develop a timeline for submission of financial status reports by the Food Services Department to be sent to the cafeteria managers

Step 4: Supervisors schedule meeting with all cafeteria managers to clarify the use of the financial status report in their daily operations.



Who Is Responsible Food Service Director Time Frame March 31, 2003 Fiscal Impact This recommendation can be implemented within existing resources.

9 The district’s financial controls include on-going reviews of the program’s financial and management practices.

The program has internal financial controls in place Protection and accountability of program assets, especially cash, is an important management responsibility. The district’s internal financial controls include written procedures for collecting, depositing, and disbursing money. The district also has written procedures to account for reimbursable meals and other sales. The district holds performance reviews three times per year. Additionally, every week a food service clerk checks the number of meals served, calculated receipts, and daily deposits against cash and meal summaries and deposit slips from the schools.

The program has automated data processing for financial reporting A food service management and accountability system, Computer Assisted Food Service (CAFS), is used throughout the district. With its point-of-service terminals and online capabilities, the CAFS system enables the district to:

• Maintain student records, with student name, ID, eligibility status, homeroom grade, and prepaid account data

• Display menu selections offered at each meal service period • Perform edit checks, as required by USDA regulations • Allow students to pay for meals by entering their ID numbers on a keypad • Display the purchase price and change due are displayed on a screen • Report daily and monthly student meal activity • Summarize daily cash sales, charges collected, and student/adult prepaid collections • Produce daily and monthly summary reports of cash and meal-count information, including daily

reimbursable meal and a-la-carte menu sales breakdowns

Other features could be added to the CAFS system to increase the efficiency and accuracy of food service operating systems and activities. For example, the district could implement features such as the recording, processing, and summarizing of data related to inventory activities.

The district uses the DOE annual cost report and district staff pre-cost menus to assist in establishing meal prices and to ensure those prices cover expenses of food and other costs related to meal production.

The district has not increased meal prices in over eight years and profits are favorable The district has not increased meal prices in over eight years. Exhibit 13-8 shows a comparison of the district’s meal prices versus the peer districts selected for this review. As illustrated, the district currently charges more for its full-priced lunch than the peer-district average. In contrast, the district breakfast prices are much lower than its peers.

These peer comparisons should be continued in the future while considering future budget needs, as the district is growing and may need to invest in equipment replacement soon. Thus far, management has focused on student nutrition and participation rather than covering breakfast meals and other costs.



Considering the district’s current surplus of funds, plans for this surplus use, relatively high lunch prices, and relatively low breakfast prices, the district should analyze its pricing policies and monitor its financial conditions annually. Price adjustments will likely be warranted in coming years.

Exhibit 13-8 Overall, the School District of Lee County’s Meal Prices are Comparable to Peer Districts for School Year 2001-02 Elementary School Middle School High School Full-priced Lunch Lee $1.60 $1.85 $1.85 Brevard 1.40 1.50 1.50 Pasco 1.60 2.00 2.00 Polk 1.40 1.65 1.65 Seminole 1.60 1.75 2.00 Volusia 1.35 1.45 1.50 Peer average $1.47 $1.67 $1.73 Full-priced Breakfast Lee $0.55 $0.55 $0.55 Brevard 0.60 0.60 0.60 Pasco 1.00 1.15 1.15 Polk 0.80 0.80 0.80 Seminole 1.00 1.00 1.00 Volusia 0.75 0.75 0.75 Peer average $0.83 $0.86 $0.86 Source: Per school districts listed above.

10 The district accurately reports meals served by category. The district uses the CAFS system’s point-of-service program to report meals served by category. Cash and meal reports, edit check reports, and participation reports are generated and forwarded to the finance department for review. A daily report is generated comparing eligible students per category, multiplied by the attendance factor, thus catching any irregularities. To comply with federal and state regulations, the department must accurately report the number of paid, free, and reduced-price meals served.

In addition, to ensure federal compliance, district personnel perform edit checks verifying that the number of meals claimed for reimbursement are equal to or less than the number of approved applications of students eligible to receive free or reduced-price meals. These checks and balances also are included in each cafeteria’s performance review. Florida’s Department of Education also checks this information in compliance audits. However, the latest Coordinated Review Effort (CRE) conducted in the district by the Florida Department of Education in January 2000, questioned the accuracy of the Food Service Department’s consolidated meal counts. However, the follow-up review provided evidence that the district took corrective action to satisfactorily pass the review.

The district should maximize federal reimbursement of student lunches While the food service administrators and school kitchen personnel are commended for establishing effective and on-going marketing and promotional programs, the district needs to maximize use of federal reimbursements. At the present time, the district is using individual applications for each student. The district could have a mechanism, such as family applications, ensuring that all siblings in district families eligible for free or reduced-price meals receive this funding. For example, if an elementary school



student is eligible for free or reduced lunch, the district should check to see if the student’s siblings (who may be middle-school or high-school age) also have applied. In January of 2003, the district plans to centralize the application process by utilizing family applications that will list all family members enrolled in the district. This will increase efficiency and reduce error in processing applications. The food services director has expressed an interest in using software and special scanners for inputting and processing applications. This would implement a cost savings because it will not require additional personnel.

11The district regularly evaluates purchasing practices to decrease costs and increase efficiency.

The district uses competitive bidding for food purchases to decrease costs and increase efficiency. Bid specifications are submitted by the Food and Nutrition Services Purchasing Department which prepares the bids according to district policies, state board rules, Florida Statutes, and Federal Laws. Annual reviews of specifications and needed quantities are conducted. The district also uses the formal bidding process and specification development for equipment and supply items. The district routinely evaluates new products before including them in bid requests. District procedures freely allow vendors to bid for products and services requested by the district and all bids are thoroughly analyzed to be in compliance with School Board Policy 4.44.

12The district has developed an effective inventory control system that is appropriate for its food service program.

The district has a comprehensive set of inventory control procedures in its policy and procedures manual. The manual covers the district’s central warehouse, which is used to store food program items as well classroom supplies. The food service director has the additional duty to oversee consolidated warehouse operations for the district.

To assist in proper accountability, the food service department procedures manual also has inventory control guidelines. Food service managers conduct physical inventories each month to assist in determining their food costs. As required by the rule, federally donated foods are kept on a perpetual inventory basis and the results are reported to the district staff of the Food service department. District management monitors inventory levels and checks for outdated items during the performance reviews of each cafeteria.

13The district has a system for receiving, storing, and disposing of food, supplies, and equipment.

The district has written procedures for receiving, storing, and disposing of food, supplies, and equipment. This protects and preserves program assets. These procedures include order checking-in, ordering procedures, and product and service evaluation. Food service and central warehouse managers and employees are required to examine product deliveries to verify amounts against the bid and brands delivered, as well as to reject incorrect items and sign invoices. Procedures are also in-place to document complaints about purchased items after acceptance has been completed. Food service employees are trained to mark the received date on each package before storage.



14The district has a long-range plan for replacing equipment, but the program does not pay for all repair and maintenance costs.

The program has procedures for immediate equipment and facility repair, as well as replacement Food service staff is addressing immediate equipment and facility repair and replacement needs in a timely manner. Site visitors found equipment to be clean and operational. A five-year equipment replacement plan is used, except in emergencies. To optimize equipment value and program assets, replacement purchases are based on equipment rating charts and input provided by maintenance department technicians.

A well-defined preventative maintenance program currently does not exist, as equipment is serviced only as needed. It is important, however, for the district to establish a preventative maintenance plan to avoid costly repairs and premature replacement. The district would be well served to begin annual equipment inspections and have a formal preventative maintenance program. This will extend the useful life of the expensive food service equipment, as it is generally accepted that, in the long-run, repair and routine maintenance of equipment costs less than replacement.

Equipment maintenance and repair costs should be absorbed by the food service department The food service program uses the district’s maintenance department to perform repairs on food program equipment. Food program maintenance and repair expenses assessed by the maintenance department were approximately $142,000 from August 2001 through March 2002. This figure includes both parts and labor costs. Yet, the food service program reimbursed the maintenance department only $21,536.11. The district’s general fund absorbed the remaining portion of expense. Generally it is accepted practice that the food services program should reimburse the district for all costs of maintenance. Full payment for food service maintenance and repairs would allow district general revenue funds for other uses, such as classroom-related needs. As an alternative to full payment of expenses, the food program should analyze and consider contracted maintenance services or hiring of program staff to perform maintenance functions.


• We recommend that the district develop a preventative maintenance plan to maximize the life of equipment and reduce overall program costs.

Action Plan 13-5 shows the recommendations necessary to implement this recommendation.

• We recommend that the food service program absorb its own maintenance and repair costs.

Action Plan 13-6 shows the recommendations necessary to implement this recommendation.

Action Plan 13-5 Maximize Equipment Life and Reduce Costs Strategy Develop a preventative maintenance plan for food service program equipment.



Action Needed Step 1: The Food Service Director and the Assistant Superintendent for Operational Support Services should ensure there is a complete inventory of all equipment subject to routine maintenance and repair.

Step 2: Program staff should consolidate all manuals and literature available for program equipment and identify equipment maintenance needs.

Step 3: Food and district maintenance staff should develop a maintenance and repair schedule.

Step 4: Food program staff should solicit cost estimates for contract maintenance, estimate in-house costs, and select the most cost-effective method.

Who Is Responsible Food Service Director and the Assistant Superintendent for Operational Support Services Time Frame August 31, 2004 Fiscal Impact A reduction in overall equipment service and replacement costs is possible.

Action Plan 13-6 Reduce Maintenance Expenditures From the General Fund by Requiring the Food Services Department to Absorb Program Maintenance and Repair Costs Strategy To reduce maintenance expenditures of the general fund by requiring the Food Services

Department to absorb program maintenance and repair costs. Action Needed Step 1: Food Service Program should absorb all program maintenance and repair costs

and budget accordingly. Step 2: The Assistant Superintendent of Operational Support Services should ensure

compliance with recommendation. Who Is Responsible Assistant Superintendent of Operational Support Services Time Frame July 31, 2003 Fiscal Impact The recommendation can be implemented within existing resources. Based on our

estimate, approximately $130,000 per year additional revenue may become available for the district’s general fund by instituting this recommendation.

Meal Preparation and Service

15 The district provides school meals designed to meet the nutritional needs of students.

The department plans menus that meet student nutritional needs and dietary guidelines The district provides nutritious meals based on the USDA meal patterns and employs a registered dietician to plan and analyze menus ensuring this important aspect of the program mission is accomplished. Additionally, Florida’s Department of Education annually conducts nutritional reviews of the program to ensure compliance with federal rules. Student special diet needs are addressed individually at each school as long as a physician provides appropriate documentation. These special dietary meals are reimbursed at the same rate as regular meals despite generally costing the district more to prepare. However, since the number of these meals is so few, the fiscal impact is minimal. Survey results shown in Exhibit 13-9 reflect that the needs of students with special diet are being addressed. However, since the survey shows 12% of teachers did not agree and 27% were unable to respond to the statement, it is suggested that a reminder about this service be communicated to school principals and their staff.




Exhibit 13-9 Survey Results Indicate That Special Diet Needs are Being Met Satisfactorily

Survey Group Statement

Strongly Agree or

Agree Neutral

Strongly Disagree or

Disagree Don’t Know

Teachers

The cafeteria manager satisfactorily addresses the needs of children with special food requirements. 42% 18% 12% 27%

Source: Surveys conducted by ValienteHernandez P.A., June 2002.

16 The district’s food production and transportation system ensures the service of high-quality food with minimal waste.

The program maximizes the use of USDA-donated foods School districts are eligible to participate in the US Department of Agriculture Donated Food Program, often called “commodities.” Lee County makes efficient use of its USDA-donated foods in its menu planning. Under the program, the district is only required to pay for storage and delivery of the donated food. To ensure maximum use, district recipes identify specific commodity items and amounts that should be used. To further encourage food service managers to use these donated foods, the district publishes donated food availability reports.

The program has standardized food production The district provides standard recipes for food service managers to ensure program consistency and quality. Standardized recipes are distributed and used district-wide to provide precise directions, yields, serving sizes, portioning utensils, and per-serving nutritional analyses. Using standard recipes and portion control instructions enables program management to better meet budgeted food cost goals.

Safe and Sanitary Food Service Environment

17The district follows safety and environmental health practices and regulations.

Sound safety and hygiene practices are a prerequisite for any school food service program to protect student health and ensure nutrition. District managers ensure that food service employees are trained to follow safety and environmental health practices and regulations. The program’s food service policies and procedures manual also covers safety and health information under general policies. The Lee County Health Department conducts inspections of the district’s cafeterias. No significant violations were noted by ValienteHernandez P.A. reviews of inspection records at sites visited. However, several schools received the program’s coveted “White Glove” award, which recognizes school cafeteria operations for achieving three consecutive perfect sanitation reports.

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