USDA to Fine School Food Programs for Non-Compliance: 5 Important Things to Remember

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Written by Milt Miller – Over the past few weeks I’ve listened to the fears of food service professionals concerning news of plans the USDA and FNS have for punishing non-compliant school food programs with fines. The thought of these monetary punishments have many school food professionals worrying what other bad consequences can emerge from the loins of the Healthy Hunger Free Kids Act.

“First they punish us with un-wanted cost increases based on compliance, then increased waste involving mandatory fruits and vegetables, little or no additional moneys to cover the higher cost of compliance, decreased participation due to students not accepting the new changes, loss of ala carte’ sales from the Smart Snacks in Schools guidelines, and now fines imposed for non-compliance of these financial-sustainability crushing rules. What could be more unfair?”

I remember a story of just such acts from an uncaring and uncompromising king, which resulted in some rebellious individuals (later called patriots) throwing crates of tea into the Boston harbor. While these acts over the past several years appear as unfair as the Tea Act and the Stamp Act, I wouldn’t go tossing commodities overboard to draw government attention to my displeasure with current legislation. Petitions, compromise, or the threat of open revolt tends to accomplish as much with the current administration as it did with the court of King George.

Although many feel these acts infringe on school food operator’s inalienable rights of the sustainability of program life, the liberty to offer meals that do not needlessly increase waste, and the pursuit of student acceptable products, there are five (5) key points to remember before working one’s self into a lather.

1. Most of this is not new: Schools found to be out of compliance by a certain dollar amount (greater than $6,000 in PA) for improper Free and Reduced Application calculations and/or improper recognition of reimbursable meals were required to refund a certain amount of their federal reimbursements. This has been for at least the past fifteen (15) years. I know because I know operators who had to pay them back. If this practice continued to be an issue over the next few audits, without being corrected, USDA could require 1%-5% pay back of reimbursements for that school for the year. If after several reviews the issue was still not corrected it became an egregious miss conduct and the school could lose its sponsorship in the National School Lunch Program. This is the same or similar policy mentioned this time around. If it hasn’t hurt you up to this point you will be fine.

2. If you are not sure you are compliant seek help: Pre-audit assessments are available and are inexpensive to insure peace of mind and pin-point where you need to correct areas of your program. These assessments will show where your weak areas are and will give you the information necessary to correct them before crunch time. Accurate calculations of Free and Reduced Meal eligibility, accurate reporting of meal counts, accurate reimbursable meal identification, menu compliance, and accurate production records are the key areas to worry about. Make sure you understand what is involved in all of these areas and seek training for where you believe you are weak.

3. Use the audit findings as an opportunity to improve: USDA is not actively seeking to take money back. They are asking for a demonstration of “Good Faith” efforts to comply. Don’t define your program by a low audit finding, it is a lesson and a chance to improve, not a life sentence. In most cases your state auditor will work with you and provide information on how to fix the problem (Corrective Action). These situations, most times, are painless and point you toward the training or improved processes you need so you don’t lose money. If findings exceed the dollar parameters and you have to give some money back, again it happens and it’s not a life sentence. Fix the issues, seek necessary training, and make sure it never happens again. Call us we can and will help.

4. If you are concerned you will fail an audit badly, you will, because you know you aren’t in compliance: I have had operators tell me, I made it through so now I can relax and do what I want for the next two (2) years. Compliance is an ongoing thing. If you don’t follow through you will fail because you knowingly choose not to follow the rules. You can’t look the other way for two years and expect to be compliant when you want to, you have developed a non-compliance habit, which will rear its head at precisely the worst time. Insure your staff is trained and ready at all times. A staff left to run amok will perform badly at crunch time, out of habit and fear of making a mistake. Keep training and staff development at the forefront of your operational goals. If everyone knows they are doing the right thing and compliance is the norm you will be fine. If staff know they are doing things properly they usually perform better and don’t make silly mistakes. When they are ill prepared mistakes WILL happen. Count on it.

5. Perfect Practices and Preparation Produce Perfect Performance: Use all of your available tools to insure compliance. POS reports and records, production records, free and reduced software programs, meal identification training for your staff, and finally and most important know the rules and follow them. Seek the knowledge and training necessary to optimize the use of all of your tools. There are specialists available, in all of these areas, to provide you with the knowledge and training necessary to succeed. Several times during the year audit you program for compliance. Take what you find, develop strategies to eliminate weak areas, and provide the necessary training. Sometimes a second set of fresh eyes helps to find opportunities for improvement you may take for granted. Seek help. Support is a great tool if used effectively. Set up a support system for your program for constant program growth.

The school food version of the Intolerable Acts of 2010 show no signs of going away any time soon. You are not being set-up to fail by some government ploy to take back their money. Agree or disagree as you see fit, but complying and succeeding is really your only choice for program financial stability. Know the rules and follow them and your audit experience will be a good one. Actively seek the knowledge and support to insure growth. If you don’t fear the audit you have already passed.

Milt Miller is VP of K-12 Operations at Food Service Solutions, Inc. Throughout his 32 years in the food service industry he has managed, operated and assisted food service programs to become successful. For more information on this and other topics, contact Milt at www.foodserve.com/school-food-program-assessment.html.

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