BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 302 (Cannella) - School Cafeteria Funds
Amended: May 8, 2013 Policy Vote: 9-0
Urgency: No Mandate: Yes
Hearing Date: May 23, 2013 Consultant: Jacqueline
Wong-Hernandez
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 302 implements various recommendations
contained in a recent report by the Senate Office of Oversight
and Outcomes regarding school cafeteria funds, including the
requirements that cafeteria funds be audited and that the
Education Audit Appeals Panel (EAAP) revise the audit guide to
include guidance on what school districts may or may not do with
a cafeteria fund. This bill requires the California Department
of Education (CDE) to prepare simplified guidelines that address
acceptable and unacceptable charges to cafeteria funds, as
specified, and post on its website all enforcement actions for
the misappropriation of these funds. This bill also requires
school districts to maintain all financial records related to
their cafeteria funds for 5 years.
Fiscal Impact (as approved on May 23, 2013):
Guidelines and Enforcement Actions: Staff costs of up to
$31,000 for up to .25 PY for the CDE to prepare simplified
guidelines, and to post guidelines and enforcement actions
on the department website.
Audit Guide: Potential costs to the EAAP are unclear. See
staff comments.
Mandate: Requiring school districts to maintain all
financial records related to cafeteria funds would impose a
potentially significant new reimbursable mandate.
Background: Existing law provides that the cafeteria fund shall
be used only for those expenditures authorized by the governing
board as necessary for the operation of school cafeterias,
including, but not limited to, expenditures for the lease or
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purchase of additional cafeteria equipment for the central food
processing plant, vending machines and their installation and
housing, and computer equipment and related software. (Education
Code � 38091)
Existing law also allows a school district with more than
100,000 average daily attendance (ADA) to enter into an
agreement with its associated student body to share revenues
generated by the joint sale of items between the cafeteria and
an associated student body student store. (EC � 38092)
Existing law requires that revenues received by the school food
service be used only for the operation or improvement of the
food service and that expenditure of school food service
revenues shall be in accordance with the financial management
system established by the state agency. (Code of Federal
Regulations, Title 7, Part 210.14(a))
This bill enacts the various recommendations provided in the
February 6, 2013 report by the Senate Office of Oversight and
Outcomes, "Food Fight: Small team of state examiners no match
for schools that divert student meal funds", and addresses the
weaknesses and gaps in the oversight system for student meal
funds.
Proposed Law: SB 302 makes various changes to the administration
and oversight of school cafeteria funds. Specifically, this
bill:
1) Requires cafeteria fund expenditures to be included as
part of annual compliance audits for local educational
agencies.
2) Requires the EAAP to revise the audit guide to include
clear guidance on what school districts may or may not do
with moneys in a cafeteria fund, as specified.
3) Requires the CDE to assess its food services workload
and staffing needs for purposes of carrying out the state's
oversight responsibilities in accordance with federal law
and regulations adopted by the United States Department of
Agriculture and request sufficient federal funding to hire
the appropriate number of staff based on that assessment.
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4) Repeals the provision in current law allowing a school
district with over 100,000 ADA to enter into an agreement
with its associated student body to share revenues
generated by the joint sale of items between the cafeteria
and an associated student body student store.
5) Requires the CDE to prepare simplified guidelines that
address most of the common acceptable and unacceptable
charges to cafeteria funds and post on its website all
enforcement actions for the misappropriation of these
funds.
6) Requires school districts to maintain all financial
records related to their cafeteria funds for five years.
7) Provides that school districts are not authorized to
charge a food service program any charge prohibited by
state or federal law or regulation or guidance.
8) Repeals the provision in current law allowing the
governing board of a school district to establish and
maintain a cafeteria fund reserve for the purchase, lease,
maintenance, or replacement of cafeteria equipment.
9) Provides that a school district shall not withhold from
its food service director any financial records involving
school nutrition programs.
Staff Comments: This bill makes various changes to the
administration and oversight of school cafeteria funds. Many of
these changes are minor or conform the statutes governing
cafeteria funds to other state laws, while others are more
significant.
This bill requires cafeteria fund expenditures to be included as
part of annual compliance audits for local educational agencies.
This requirement is unlikely to result in new state costs.
This bill further requires the EAAP to revise the audit guide to
include clear guidance on what school districts may or may not
do with moneys in a cafeteria fund. The result of this
requirement is unclear, as the EAAP has opined that the
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directive is outside of its statutory authority. Specifically,
the agency indicated that is authorized to adopt as regulations
the annual guide for audits of K-12 education entities and to
independently resolve disputes arising from audits of those
entities, but lacks authority to adopt regulations that
implement or interpret those laws. Thus, it is unclear how this
requirement for the EAAP to give the required guidance would be
implemented, if this bill is enacted.
This bill requires that the CDE assess workload and request
sufficient federal funding to hire needed staff. The CDE has
indicated that it already plans do to so, and this requirement
will not generate additional workload. The CDE will apply for
federal funding to cover the cost of additional positions.
The bill's requirement that the CDE prepare simplified cafeteria
fund guidelines and post all enforcement actions on its website
will likely result in minor costs and workload increase; the CDE
projects that it would require up to a .25 PY at a cost of
$31,000. The CDE notes that it is not clear what would qualify
as "enforcement actions," since the CDE does not undertake civil
or criminal enforcement actions. The cost estimate assumes the
bill intends for the CDE to publish audit findings and
corrective actions related to those findings.
This bill requires that every school district maintain all
financial records related to its cafeteria fund for five years.
This requirement is likely to result in a significant new
reimbursable mandate on school districts.
The committee amendments would remove the requirements on the
EAAP to revise the audit guide to include clear guidance on what
school districts may or may not do with moneys in a cafeteria
fund.