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SNP Allocating Food Service Costs for RCCIs

Allocating food service costs for residential child care institutions

Note: The instructions contained herein apply specifically to the School Nutrition Program’s (SNP) Annual Year-End Revenue and Cost Report submitted on the last claim month of the school year. These instructions do not necessarily correspond to the treatment of revenues and expenditures for the nonprofit school food service account.

SNP Residential Child Care Institutions (RCCI) must apply the Meal Equivalents Costing Method when allocating costs associated with operating their nutrition programs. This method uses the Institute of Child Nutrition’s meal equivalencies and RCCI’s actual participation data.

Costs of reimbursable meals and snacks are reported annually on the last claim month of the school year and submitted on the Child Nutrition Information and Payment System (CNIPS) Claim Cost Details page, Part III – Cost Incurred, Items 37 through 40. The following text outlines the Meal Equivalents Costing Method for RCCIs and how the costs are reported on the last claim month of the school year.

Part III Costs Incurred

Meal Equivalents

The Meal Equivalents require the assumptions that (1) the cost of three breakfasts equals the cost of two lunches; (2) the cost of one supper equals the cost of one lunch; and (3) the cost of three supplements equals the cost of one lunch. The share of total food service program costs attributed to each reimbursable program (National School Lunch, School Breakfast, or Supplements) is based on a comparison of the number of meals served for the specific reimbursable program to the total number of meals served for all the programs. This comparison establishes cost allocation percentages by reimbursable meal type that are applied to total costs for the food service program. This calculation produces the costs associated with the reimbursable meal programs.

Determine the total number of adult and child breakfasts, lunches, meal supplements, and suppers served during the reporting period, i.e., July 2015 – June 2016. Using assumptions described in (1), (2), and (3) above, calculate the “Lunch Equivalents” as follows—3 breakfasts = 2 lunches; 1 supper = 1 lunch; 3 supplements = 1 lunch:

Calculation of "Lunch Equivalents"

Meal Type Actual Number Served Conversion Factor Lunch Equivalent
Child Breakfasts
2,000
.67
1,340
Child Lunches
600
1
600
Child Supplements
2,000
.33
660
Adult Breakfasts
200
.67
134
Adult Lunches
100
1
100
Child and Adult Suppers
2,200
1
2,200
Total Lunch Equivalent  
5,034


Using "Lunch Equivalent" counts, compute the cost allocation percentages for National School Lunch, School Breakfast, and Meal Supplements. This computation is accomplished by dividing the lunch equivalent meal counts by program type by the "Total Equivalent" as follows. Note that adult meals and all suppers are not reimbursable.

Calculation of Cost Allocation Percentages

Meal Type Actual Number Served Lunch Equivalent Reimbursable Meals Calculation Cost Allocation
Child Breakfasts
2,000
1,340
1,340
1,340 ÷ 5,034
0.27 or 27%
Child Lunches
600
600
600
600 ÷ 5,034
0.12 or 12%
Child Supplements
2,000
660
660
660 ÷ 5,034
0.13 or 13%
Adult Breakfasts
200
134
n/a
n/a
n/a
Adult Lunches
100
100
n/a
n/a
n/a
Child and Adult Suppers
2,200
2,200
n/a
n/a
n/a
Total Lunch Equivalent
n/a
5,034
n/a
n/a
n/a

 

Determine the total cost of purchased food, labor (direct and support), supplies and purchased services (direct and support), and equipment depreciation for food service. For instructions on calculating equipment depreciation, go to Depreciation of Nonexpendable Food Service Equipment. By using the percentages calculated with the process described above, allocate food service costs among the National School Lunch Program, School Breakfast Program, and Meal Supplements as applicable

Calculation of Total Costs

Cost Items Total Cost Cost Allocation*
Breakfast 27%

Cost Allocation*
Lunch 12%

Cost Allocation*
Supplement 13%
Reported Costs by Line Item
Total Purchased Food
$8,500
$ 2,295
$ 1,020
$ 1,105
$ 4,420 (Item 37)
Total Labor
$3,000
$ 810
$ 360
$ 390
$ 1,560(Item 38)
Total Supplies and Purchased Services
$1,000
$ 270
$ 120
$ 130
$ 520 (Item 39)
Total Equipment Depreciation

$0

$ 0
$ 0
$ 0
$ 0 (Item 39)
Total Cost for Food Services
$12,500
$ 3,375
$ 1,500
$ 1,625
$ 6,500 (Item 40)

*Cost Allocation by Reimbursable Program Type

Questions: Frances Swann | FSwann@cde.ca.gov | 916-323-2485 
Last Reviewed: Monday, July 24, 2017
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