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Central cafeteria fund running deliberate deficit as USDA reimbursements fall, staff say
Summary
District staff outlined a plan to spend down Fund 143 (centralized cafeteria) even as USDA reimbursements fall. The cafeteria fund is projected to show a $6.6 million planned deficit intended to reduce an unusually large fund balance while continuing program operations.
Rutherford County Schools staff told the board the centralized cafeteria fund (Fund 143) has no tax base and operates “like a restaurant,” and that the district plans to run a planned deficit to spend down excess fund balance while maintaining meal service.
“Fund 1 43 is our centralized cafeteria fund. This fund does not have a tax base connected to it. It is truly runs like a restaurant would,” Dr. Sullivan said, adding that the district intentionally budgets a deficit to reduce the fund balance the USDA prefers districts not to hold in excess of operating needs.
Staff showed a working projection that included a $6,600,000 deficit figure to draw the fund down; the document also projected the fund balance would remain around $16 million after the planned spenddown. Dr. Sullivan said some planned projects and equipment purchases did not occur last year, so actual outlays were lower than anticipated. He said USDA meal reimbursement rates were down (from 14.5 to 14 in the district’s coding), and that other revenue comes from student and visitor meal payments.
Board members asked for clarification on specific line items including where bad meal debt is recorded; staff said bad meal debt is accounted for “throughout our whole lines” rather than in a single line item. Board members also asked whether federal USDA funding cuts were imminent; staff said there had been “rumors and everything, but nothing that we've seen in actuality yet.”
Ending: staff said the board has previously approved kitchen upgrades and renovations and that those projects remain the intended outlet for Fund 143 spending as the district works to draw the fund closer to the USDA’s recommended operating balance.
