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Section 12: Management Issues 1 National Food Service Management Institute
Section 12: Section 12:
Management IssuesManagement Issues
Food Purchasing Food Purchasing for Child Care Centersfor Child Care Centers
Section 12: Management Issues 2 National Food Service Management Institute
list management issues related to food purchasing,
explain the two types of methods acceptable for handling inventory and decide which one is best for the center,
Lesson ObjectivesLesson Objectives
The learner will be able to
Section 12: Management Issues 3 National Food Service Management Institute
identify policies that the board of directors/owners of the center should make,
write a purchase plan for the center,
Lesson ObjectivesLesson Objectives
The learner will be able to
Section 12: Management Issues 4 National Food Service Management Institute
develop an internal control plan, and
explain how to develop a budget and use it as a working tool.
Lesson ObjectivesLesson Objectives
The learner will be able to
Section 12: Management Issues 5 National Food Service Management Institute
Management IssuesManagement Issues
Inventory
Board/owner policies
Purchase plan
Internal controls
Budgeting
Section 12: Management Issues 6 National Food Service Management Institute
InventoryInventory
Two acceptable methods Food usage
Purchases equal to food usage
Section 12: Management Issues 7 National Food Service Management Institute
Food UsageFood Usage
Monthly
Formula:Beginning Inventory
Purchases
Ending Inventory
Food Used
$0.00
+ $0.00
− $0.00
$0.00
Section 12: Management Issues 8 National Food Service Management Institute
Food UsageFood Usage
Best for high-dollar-value inventory (more than 7 calendar days)
Section 12: Management Issues 9 National Food Service Management Institute
Purchases Equal Purchases Equal to Food Usageto Food Usage
Annually Philosophy:
If inventory is well-controlled, purchases = food used
Section 12: Management Issues 10 National Food Service Management Institute
General Inventory RuleGeneral Inventory Rule
Once a container (box, bag, case)
is opened, it is not counted as part of
the inventory.
Section 12: Management Issues 11 National Food Service Management Institute
Board/Owner PoliciesBoard/Owner Policies
Represent good business practice
Reviewed annually
Section 12: Management Issues 12 National Food Service Management Institute
Board/Owner PoliciesBoard/Owner Policies
Employees authorized to make purchases
Standard of conduct Purchasing documents needing
approval Type of inventory
Section 12: Management Issues 13 National Food Service Management Institute
Board/Owner PoliciesBoard/Owner Policies
Employees who will sign invoices write checks prepare the Federal claim for reimbursement keep accounting records
Section 12: Management Issues 14 National Food Service Management Institute
Purchase PlanPurchase Plan
Results of Market analysis Market baskets IFBs/RFPs
Presented to board/owners for approval
Section 12: Management Issues 15 National Food Service Management Institute
Internal ControlInternal Control
Multiple staff members responsible for
performing duties related to a certain task
Section 12: Management Issues 16 National Food Service Management Institute
Internal Control . . .Internal Control . . .
. . . safeguards the financial resources of a center.
Section 12: Management Issues 17 National Food Service Management Institute
Internal Control PlanInternal Control Plan
Task Staff Member Assigned
Assigning reimbursement category ClerkCounting and recording meals served CookFiling claims for reimbursement DirectorReceiving checks for reimbursement ClerkDepositing checks for reimbursement DirectorRecording deposit in accounting records ClerkRecommending approved vendors to the board of directors/owners
Director
Making the grocery list Cook
Section 12: Management Issues 18 National Food Service Management Institute
Internal Control PlanInternal Control Plan
Task Staff Member Assigned
Making purchases at approved retail vendors or placing orders with wholesale vendors
Cook
Receiving wholesale orders and storing wholesale and retail purchases
Cook
Signing invoices or store receipts CookWriting checks DirectorMailing checks ClerkRecording payments in the accounting records ClerkTaking inventory Clerk
Section 12: Management Issues 19 National Food Service Management Institute
BudgetingBudgeting
Center director must present a budget to the board of
directors/owners.
Section 12: Management Issues 20 National Food Service Management Institute
Purchasing Process . . .Purchasing Process . . .
. . . includes planning and managing a food budget that allows the center to
meet CACFP meal pattern requirements and
serve a quality food product to children.
Section 12: Management Issues 21 National Food Service Management Institute
BudgetBudget
Normally for 1 year
A financial guide for that year
Section 12: Management Issues 22 National Food Service Management Institute
Planning the BudgetPlanning the Budget
You will need calendar for the year schedule of days the
center operates meal count records for
previous year
Projected number of Projected number of meals served in the yearmeals served in the year
Section 12: Management Issues 23 National Food Service Management Institute
Planning the BudgetPlanning the Budget
Number of days in a month you serve varies
Enrollment could increase/decrease
Why not use actual Why not use actual meal counts for the past year?meal counts for the past year?
Section 12: Management Issues 24 National Food Service Management Institute
Operating YearsOperating Years
Calendar year: January to December Federal fiscal year: October to
September State fiscal year:
Varies by State Often July to June
Center fiscal year: varies by center School year: varies by State
Section 12: Management Issues 25 National Food Service Management Institute
Activity 15: AnswersActivity 15: Answers
NovemberSunday Monday Tuesday Wednesday Thursday Friday Saturday
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 X 24 25 26 27 Thanksgiving Day
28 29 30 X
XXXX
XXX
XXX
Section 12: Management Issues 26 National Food Service Management Institute
Activity 15: AnswersActivity 15: Answers
MaySunday Monday Tuesday Wednesday Thursday Friday Saturday
1
2 3 4 5 6 7 8
9 Mother’s Day
10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 Memorial Day
XXXXX
XXX
XX
X
Section 12: Management Issues 27 National Food Service Management Institute
Activity 15: AnswersActivity 15: Answers
November 18 X 39 = 702 18 x 49 = 882 18 x 52 = 936
May 20 x 39 = 780 20 x 47 = 940 20 x 51 = 1,020
Section 12: Management Issues 28 National Food Service Management Institute
Activity 15: AnswersActivity 15: Answers
Month
Number of days
Center is open
Projected number of meals per day1
Total monthly meals2 (number of days x average
meals per day)
Breakfast Lunch Snack Breakfast Lunch SnackOctober, 2005 23 40 50 56 920 1150 1288November, 2005 18 39 49 52 702 882 936December, 2005 20 38 48 47 760 960 940January, 2006 23 40 50 56 920 1150 1288February, 2006 20 37 47 50 740 940 1000March, 2006 21 40 50 56 840 1050 1176April, 2006 22 40 50 56 880 1100 1232May, 2006 20 39 47 51 780 940 1020June, 2006 21 40 50 56 840 1050 1176July, 2006 22 37 46 53 814 1012 1166August, 2006 21 40 50 56 840 1050 1176September, 2006 21 40 50 56 840 1050 1176Totals 9876 12334 13574
Section 12: Management Issues 29 National Food Service Management Institute
Planning the BudgetPlanning the Budget
Sophisticated accounting records Past year’s costs
Total expenditures for preparing the budget
Monthly expenditures for managing the budget
How much money How much money will be spent for each meal?will be spent for each meal?
Section 12: Management Issues 30 National Food Service Management Institute
Planning the BudgetPlanning the Budget
New centers:
Federal reimbursement rate for free meals
X
% for food costs
How much money How much money will be spent for each meal?will be spent for each meal?
Section 12: Management Issues 31 National Food Service Management Institute
New Center BudgetNew Center Budget
Contact State Agency to get percentage to use in estimating food budget
Section 12: Management Issues 32 National Food Service Management Institute
New Center BudgetNew Center Budget
Federal Reimbursement RateX
Percentage (from State Agency)
Example: $2.32 (2005/06 Federal rate for lunch)
X65% (% from State Agency)
= $1.51 (budgeted for each lunch)
Section 12: Management Issues 33 National Food Service Management Institute
Activity 16: AnswersActivity 16: Answers
Snack rate (2005/06 Federal rate)
$0.63 @ 50% = $0.32$0.63 @ 60% = $0.38$0.63 @ 65% = $0.41
Section 12: Management Issues 34 National Food Service Management Institute
Budget AmountBudget Amount
Budget amount for 1 month =
number of meals X
amount per meal spent on food
Section 12: Management Issues 35 National Food Service Management Institute
Budget AmountBudget Amount
Budget amount for October lunch =
1,150 X
$1.51 = $1,736.50
Section 12: Management Issues 36 National Food Service Management Institute
Food BudgetFood Budget
Month1
BreakfastMeals
2Costs
3Extension*
4
LunchMeals
5Costs
6Extension*
7
SnackMeals
8Costs
9Extension*
10
Monthly Total**
11Oct-05 920 $0.83 $763.60 1150 $1.51 $1736.50 1288 $0.41 $528.08 $3028.18Nov-05 702 $0.83 $582.66 882 $1.51 $1331.82 936 $0.41 $383.76 $2298.24Dec-05 760 $0.83 $630.80 960 $1.51 $1449.60 940 $ 0.41 $385.40 $2465.80Jan-06 920 $0.83 $763.60 1150 $1.51 $1736.50 1288 $ 0.41 $528.08 $3028.18Feb-06 740 $0.83 $614.20 940 $1.51 $1419.40 1000 $ 0.41 $410.00 $2443.60Mar-06 840 $0.83 $697.20 1050 $1.51 $1585.50 1176 $ 0.41 $482.16 $2764.86Apr-06 880 $0.83 $730.40 1100 $1.51 $1661.00 1232 $ 0.41 $505.12 $2896.52May-06 780 $0.83 $647.40 940 $1.51 $1419.40 1020 $ 0.41 $418.20 $2485.00Jun-06 840 $0.83 $697.20 1050 $1.51 $1585.50 1176 $ 0.41 $482.16 $2764.86Jul-06 814 $0.83 $675.62 1012 $1.51 $1528.12 1166 $ 0.41 $478.06 $2681.80Aug-06 840 $0.83 $697.20 1050 $1.51 $1585.50 1176 $ 0.41 $482.16 $2764.86Sep-06 840 $0.83 $697.20 1050 $1.51 $1585.50 1176 $ 0.41 $482.16 $2764.86Totals 9876 $7703.28 12334 $17514.28 13574 $4479.42 $32386.76
Section 12: Management Issues 37 National Food Service Management Institute
Managing the BudgetManaging the Budget
The budget must provide
current information.
Section 12: Management Issues 38 National Food Service Management Institute
Budget as Working ToolBudget as Working Tool
Maintain a budget report for each month
Record amount budgeted for the month at the top
Subtract each invoice or grocery receipt
Section 12: Management Issues 39 National Food Service Management Institute
Budget as Working ToolBudget as Working Tool
Line Date Vendor Money Spent Balance1 10/1/2005 Opening budget balance $30282 10/1/2005 ABC Milk Company $37 $29913 10/1/2005 Magilla Supermarket $225 $27664 10/2/2005 Farmer Jones $7 $27595 10/5/2005 Mallard Wholesale $107 $26526 10/8/2005 ABC Milk Company $40 $26127 10/8/2005 Magilla Supermarket $237 $23758 10/10/2005 Duck’s Fruit Stand $98 $22779 10/11/2005 Crum’s Peach Orchard $12 $2265
Section 12: Management Issues 40 National Food Service Management Institute
Budget ReportBudget Report
Only whole dollar amounts
Speed important
Section 12: Management Issues 41 National Food Service Management Institute
Important!Important!
The working budget report should not stop a center
from making the purchases necessary to provide the
meals as planned.
Section 12: Management Issues 42 National Food Service Management Institute
Budgeted AmountBudgeted Amount
Has the enrollment increased? Has there been an unusual event
such as a freezer failing and food spoiling?
Have there been price increases?
If higher than planned, ask:If higher than planned, ask:
Section 12: Management Issues 43 National Food Service Management Institute
Budgeted AmountBudgeted Amount
Are the menus meeting meal patterns?
Are the portion sizes adequate? Has enrollment decreased? Have there been price decreases?
If lower than planned, ask:If lower than planned, ask:
Section 12: Management Issues 44 National Food Service Management Institute
Remember!Remember!
A budget is a plan.