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Manage Program Finances

Manage Program Finances

Effective financial management of your child nutrition program provides fiscal stability and allows you to operate an efficient and compliant program. Below you'll find resources to improve school food service operations and guidance for the Resource Management section of the Administrative Review.

Sponsors are responsible for maintaining the financial health of the food service program. This includes ensuring federal compliance with generally accepted accounting principles (GAAP) for federally funded programs and applying the accounting and financial requirements specific to Child Nutrition programs.

Financial Management

In School Year 2022-23, students must be charged for meals when they are not eligible for free or reduced-price meals. Additionally, sponsors must charge accordingly for second meals or milk, adult meals, a la carte items and catering. With the return of charging for student meals, sponsors must implement an unpaid meal charge policy and communicate that policy to households.

Budgeting Tools:

Procuring Local Foods for Child Nutrition Programs

Excess Net Cash

It is recommended to submit a spending plan or any updates to the plan at the beginning of each school year.

This plan could include improving the quality of meals or the purchase/replacement of food service equipment, but is not limited to these items. The funds must be used for the support of the food service program pursuant to federal and state rules and regulations, including the Colorado Department of Education (CDE) approved equipment list or decision tree process.

Nonprogram Revenue

School Food Authorities (SFAs) are required to determine if the revenue from nonprogram foods generates at least the same proportion of revenue as they contribute to the SFAs food cost.

Paid Lunch Equity

The Paid Lunch Equity (PLE) Tool was created to assist School Food Authorities calculate their paid lunch price increase requirements and/or non-Federal source contributions to meet the requirements specified in 7 CFR 210.14(e).

The PLE tool compares the weighted price for paid lunches to the determined targeted weighted average price. The targeted weighted average price is the difference between the per meal Federal reimbursement for free meals and paid lunches.

If a SFA's average weighted price for lunches is less than the targeted weighted average price, the SFA must take action to address the difference.

2022-23 Paid Lunch Equity Updates:

  • Sponsors are not required to submit the Paid Lunch Equity tool to our office or increase paid student prices.
  • Schools can price their paid lunches at a level that best addresses local needs.
  • This flexibility does not apply to adult lunch prices.
  • Sponsors are still encouraged to review their budget and assess paid lunch prices using the PLE tool to ensure costs are covered and the paid lunch prices this school year don't adversely affect the nonprofit food service account in future years.
  • For questions, email

Financial Reporting

Financial reporting requirements specific to public School Food Authority (SFA) Sponsors:

Indirect Costs

The ratio of indirect costs to direct costs, expressed as a percentage. Indirect costs are those elements of cost necessary in the provision of a service which are of such nature that they cannot be readily or accurately identified with the specific service. Direct costs are those elements of cost which can be easily, obviously, and conveniently identified with specific activities or programs.

To understand how your Fixed With Carry Forward Indirect Cost Rate is calculated, you will need to fill out a worksheet using your detailed Indirect Cost Rate Calculations pages (provided below).

Look Up Available Rates

Unpaid Meal Charges

Unpaid Meal Charges contribute to the outstanding amount due to the food service fund for meals already provided to the student. These charges must be reported as accounts receivable in the food service fund. These charges should be tracked as negative balances on the students' accounts in the point of sale (POS).

Learn how to overcome the Unpaid Meal Challenge through proven strategies from our nation's schools.

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