Skip to main content
California Department of Education Logo

Excess Net Cash Resources


Nutrition Services Division Management Bulletin

Purpose: Policy, Beneficial Information

To: All School Nutrition Program Sponsors

Attention: Food Service Directors, School Business Officials

Number: SNP-06-2020

Date: January 2020

Reference: Title 7, Code of Federal Regulations, sections 210.2, 210.9(1), 210.14(b), and 210.19(a)(1)

Supersedes: NSD-SNP-07-2013; NSD-SNP-05-2012

Subject: Excess Net Cash Resources


School food authorities (SFA) participating in federal School Nutrition Programs (SNP) must observe both state and federal limitations on the use of nonprofit school food service account funds. This management bulletin (MB) supersedes MB NSD-SNP-07-2013 on Cafeteria Fund Allowable Uses. This MB provides updated information regarding net cash resources (NCR) for the nonprofit school food service account (cafeteria fund).

Limits on Net Cash Resources

Federal regulations require that SFAs limit their NCR to an amount that does not exceed three months of average operating expenditures for its cafeteria fund. NCR are defined as all monies that are available; or have accrued to, an SFA’s cafeteria fund, less cash payable. Monies may include, but are not limited to, cash on hand, cash receivable, earnings on investments, cash on deposit; and the value of stock, bonds, or other negotiable securities.

SFAs should closely monitor and calculate their NCR throughout the school year to avoid an excess balance. The California Department of Education (CDE) created Form SNP-57 NCR Calculator and instructions which are available in the Download Forms section of the Child Nutrition Information and Payment System to assist with the calculation. If SFAs have an excess balance, they should contact the Resource Management Unit (RMU) by email at snpba@cde.ca.gov to create an approved budget agreement to spend down the excess funds.

Federal regulations require the CDE to ensure SFAs are in compliance with the requirements to limit NCR. The RMU annually reviews data from SFA’s prior year Unaudited Actuals submitted to the CDE School Fiscal Services Division. If excess NCR are identified, the RMU will contact these SFAs to initiate a budget agreement. The RMU will continue to monitor all active budget agreements annually until compliance with NCR is met.

If SFAs fail to comply with NCR requirements, the CDE may require SFAs to reduce meal prices, improve food quality, or make other improvements to the food program. In addition, the CDE may make adjustments in the Child Nutrition Programs rate of reimbursement if the SFA continues to be out of compliance with NCR.

Cafeteria Equipment Reserve

Cafeteria fund reserves, also known as cafeteria equipment reserves or deferred maintenance are not allowed. California Education Code (EC) Section 38102 allowed this in the past, however, Senate Bill 81 repealed this section of EC in the 2013–14 regular session.

Additional Cafeteria Fund Guidance and Resources

Due to the complexity of cafeteria fund oversight, the CDE Nutrition Services Division (NSD) has issued a series of MBs about the laws and regulations governing revenues accruing to and expenditures made from cafeteria funds and accounts. Additional MBs regarding allowable and unallowable expenditures from the school food services cafeteria funds and accounts can be found on the CDE Cafeteria Fund Guidance web page at https://www.cde.ca.gov/ls/nu/sn/cafefundguide.asp.

Contact Information

If you have any questions regarding this subject, please contact the CDE NSD RMU by email at SNPBA@cde.ca.gov.

Questions:   Nutrition Services Division | 800-952-5609
Last Reviewed: Friday, March 13, 2020
Related Content
  • Cafeteria Fund Guidance
    Provides Local Educational Authorities (LEA) with information and instructions pertaining to federal and State statutes and regulations that govern school cafeteria funds.
  • School Nutrition Programs Management Bulletins
    School Nutrition Programs (SNP) management bulletins for sponsors of the National School Lunch Program, School Breakfast Program, Special Milk Program, and State Meal Program.
Recently Posted in Nutrition
  • Building a Healthy Me! Curriculum (added 27-Mar-2020)
    Nutrition Education lesson that introduces children to the food groups and to a variety of healthy eating options.
  • Child Nutrition Programs Resource Library (added 27-Mar-2020)
    A library of online resources for program operators participating in the Child Nutrition Programs.
  • COVID-19 Parent Meal Pick-up Waiver (added 27-Mar-2020)
    On March 25, 2020, the U.S. Department of Agriculture (USDA) issued COVID-19: Child Nutrition Response #5, National Waiver to Allow Parents and Guardians to Pick-up Meals for Children.
  • COVID-19 CNP Meal Pattern Requirements Waiver (added 27-Mar-2020)
    On March 25, 2020, the U.S. Department of Agriculture (USDA) issued COVID-19: Child Nutrition Response #4, National Waiver to Allow Meal Pattern Flexibility in the Child Nutrition Programs (CNP) as part of the COVID-19 Child Nutrition Response Act.
  • Guidance and Sample Menus for SFSP Meal Patterns (added 26-Mar-2020)
    Guidance and three sets of sample menus to provide Child Nutrition Program (CNP) Operators with ideas for how to serve meals that meet the Summer Food Service Program (SFSP) meal pattern requirements.