Federal

USDA: Cafeterias Shouldn’t Be Cash Cows for Schools

August 23, 2011 6 min read
  • Save to favorites
  • Print

the way school cafeterias work.

The 4,000-student school district’s budget had been cut by the state, so the district exercised its right to charge its own department of food and nutrition services for some operating costs—effectively shifting those costs to the federal government.

School districts can do that because their operating budgets are separate from their food and nutrition budgets. School cafeterias generally operate using federal dollars that come in based on the type and quantity of meals sold and money generated from the sale of meals.

The timing in Seymour, however was unfortunate: The state had cut the district’s budget, which led the district to assess new charges to the food-services department, and the food-services department, in turn, raised lunch prices. So, in the middle of an economic downturn, students’ families had to pick up the tab.

Response to Concerns

To clarify the kinds of costs that districts can—and cannot—bill to cafeterias, the U.S. Department of Agriculture in July issued rules for how districts bill school food programs for utilities, trash collection, and janitors, among other services, that are intended to eliminate variation from one district to the next and keep costs in check. The USDA got the authority to create the rules from last year’s Healthy, Hunger-Free Kids Act, the answer to years of requests from food-service directors for regulation of these so-called indirect costs.

Former School Nutrition Association President Dora Rivas, who has run the food-service program in the Dallas Independent School District for six years, has advocated for more regulation of indirect costs before Congress.

“Nationally, it has become an issue just because of the fact that school budgets are so tight. Districts want to maintain a high level of education for their students—that being an education institution priority—so they would try to maximize whatever funds they can get that’s allowable,” she said. A 2006 survey of about 1,000 school districts by the SNA found that 52 percent of districts were charging their food-service programs for indirect costs, up from about 11 percent in 1994.

The Oxon Hill, Md.-based SNA, which represents thousands of school food-service directors, lobbied for the rules, noting that when districts charge too much for these services, there is less money to pay for food programs’ main purpose: school meals.

Also, providing school meals is likely to become more expensive if new nutrition standards proposed by the USDA are adopted. The standards, also authorized by the new school nutrition law, would require serving more fresh fruits, vegetables, and whole grains. Another provision calling for water to be available at meal time is proving to be a financial challenge for districts that don’t have water fountains in their cafeterias.

Goals at Odds

In some districts, the charges for indirect costs have triggered actions that are in direct conflict with the law’s goals of providing more nutritious school meals. For example, last year Guilford County Schools, based in Greensboro, N.C., sold more ice cream, popular with students and not included as a part of traditional school meals, to make up for some of the indirect cost charges from the district.

“Is it a wise decision, when we charge so much indirect costs, that we start to compromise the program that we’re running?” Cynthia Sevier, the county’s director of child-nutrition services, told the Charlotte Observer.

Democratic Congresswoman Judy Wu of California worked to get the language about indirect costs into the Healthy, Hunger-Free Kids law.

“This is a good first step to ensure school districts can properly charge the federal government for their school meal programs,” she said in a statement. “School lunch and breakfast programs should not be seen as revenue sources. I hope that more progress can be made in the weeks and months to come to ensure that federal funds are spent providing nutritious meals to America’s schoolchildren.”

The new rules, issued July 7, provide examples of how charges could be calculated, what the difference is between indirect and direct costs, and what might be considered egregious charges.

“For example, the salary of an employee whose duties consist solely of preparing and serving school meals is 100 percent allocable to the ... school food service, and is therefore treated as a direct cost,” the new rules say. “By contrast, the superintendent’s salary benefits all programs, functions, and activities of the school district; the portion that benefits the school food service can be determined only through a mathematical allocation process, which is the reason it is an indirect cost.”

In another example, the rules note that a district requiring internal maintenance service to change all of the light bulbs in a kitchen at a rate of $600 an hour “appears to be grossly disproportionate to the benefit the food service receives for the services provided.”

Eventually, the new school nutrition law says, USDA must conduct a study to see how districts are charging for indirect costs. The results of that study could change what is in the rules the agency issued last month.

Districts’ Defense

The current lack of data on districts’ calculations of indirect food-service costs makes the new rules premature, said Lucy Gettman, director of federal programs for the Alexandria, Va. -based National School Boards Association.

Yet organizations like hers didn’t get a chance to comment on these detailed rules as they did and will with other parts of the law.

Also, she said, rerouting district dollars to the cafeteria has its own issues, especially at the same time other changes are being made in the way school cafeterias work.

“It takes a few resources here, a few there,” she said. “Put them all together and it’s a real challenge to school districts.”

For instance, as a part of the Healthy, Hunger-Free Kids Act, districts must now revamp their wellness policies.

“There will be administrative costs associated with implementing those policies,” Ms. Gettman said.

In addition, said Noelle Ellerson, the assistant director for policy analysis and advocacy for the American Association of School Administrators in Arlington, Va., districts already could rely on guidance from the U.S. Office of Management and Budget about charging indirect costs to federal programs. She said the widespread overcharging of food-service programs implied by the new rules is not happening.

“The idea that they’re robbing the program to fund the football program” is unlikely, she said. “The overwhelming majority of superintendents have good relationships with their [food service] directors.”

Other measures to ensure that National School Lunch Program and School Breakfast Program dollars are directed primarily at preparing quality meals include pricing a la carte menu items and meals for students who pay full price accurately—not so low they are subsidized by federal reimbursements for free and reduced-price meals, said Matthew Sharp, a senior advocate with California Food Policy Advocates in Oakland.

“That’s the benefit of all these changes together,” he said. “They support the low-income participants in the school breakfast and lunch program, not other aspects of the school district budget.”

Nirvi Shah, Writer contributed to this article.
A version of this article appeared in the August 24, 2011 edition of Education Week as Rules Aim to Keep Cafeterias From Becoming Cash Cows

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Assessment Webinar
The State of Assessment in K-12 Education
What is the impact of assessment on K-12 education? What does that mean for administrators, teachers and most importantly—students?
Content provided by Instructure
Jobs January 2022 Virtual Career Fair for Teachers and K-12 Staff
Find teaching jobs and other jobs in K-12 education at the EdWeek Top School Jobs virtual career fair.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Reading & Literacy Webinar
Proven Strategies to Improve Reading Scores
In this webinar, education and reading expert Stacy Hurst will provide a look at some of the biggest issues facing curriculum coordinators, administrators, and teachers working in reading education today. You will: Learn how schools
Content provided by Reading Horizons

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Federal Miguel Cardona Came in as a Teacher Champion. Has COVID Muted His Message?
The education secretary is taking heat from some who say his advocacy is overshadowed by Biden's push to keep schools open.
11 min read
Secretary of Education Miguel Cardona talks to students at White Plains High School in White Plains, N.Y. on April 22, 2021.
U.S. Secretary of Education Miguel Cardona talks to students at White Plains High School in White Plains, N.Y., last April.
Mark Lennihan/AP
Federal Citing Educator and Parent Anxieties, Senators Press Biden Officials on Omicron Response
Lawmakers expressed concern about schools' lack of access to masks and coronavirus tests, as well as disruptions to in-person learning.
5 min read
Dr. Rochelle Walensky, Director of the Centers for Disease Control and Prevention, left, and Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases and chief medical adviser to the president, testify before a Senate Health, Education, Labor, and Pensions Committee hearing to examine the federal response to COVID-19 and new emerging variants, Tuesday, Jan. 11, 2022 on Capitol Hill in Washington.
Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, left, and Dr. Anthony Fauci, chief medical adviser to the president, testify at a Senate hearing about the federal response to COVID-19.
Greg Nash/Pool via AP
Federal Miguel Cardona Should Help Schools Push Parents to Store Guns Safely, Lawmakers Say
More than 100 members of Congress say a recent shooting at a Michigan high school underscores the need for Education Department action.
3 min read
Three Oakland County Sheriff's deputies survey the grounds outside of the residence of parents of the Oxford High School shooter on Dec. 3, 2021, in Oxford, Mich.
Three Oakland County Sheriff's deputies survey the grounds outside of the Crumbley residence while seeking James and Jennifer Crumbley, parents of Oxford High School shooter Ethan Crumbley, on Dec. 3, 2021, in Oxford, Mich.
Jake May/The Flint Journal via AP
Federal In Reversal, Feds Seek to Revive DeVos-Era Questions About Sexual Misconduct by Educators
The Education Department's decision follows backlash from former education Secretary Betsy DeVos and other conservatives.
4 min read
Illustration of individual carrying binary data on his back to put back into the organized background of 1s and 0s.
iStock/Getty Images Plus