BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: SB 302
AUTHOR: Cannella
AMENDED: April 1, 2013
FISCAL COMM: Yes HEARING DATE: May 1, 2013
URGENCY: No CONSULTANT: Lenin Del
Castillo
SUBJECT : School cafeterias: cafeteria fund.
SUMMARY
This bill implements various recommendations contained in a
recent Senate Office of Oversight and Outcomes report
regarding school cafeteria funds, including the
requirements that cafeteria funds be audited and that the
Education Audit Appeals Panel revise the audit guide to
include guidance on what school districts may or may not do
with a cafeteria fund. This bill also proposes to extend
the sunset date of the Los Angeles Unified School
District's Office of the Inspector General (OIG) by ten
years from January 1, 2015, to January 1, 2025.
BACKGROUND
Current law:
1) 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 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)
2) 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
SB 302
Page 2
store. (Education Code � 38092).
3) Provides that revenues received by the school food
service shall 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))
4) Authorizes the OIG until January 1, 2015, to
conduct audits and investigations, as specified,
including the ability to subpoena witnesses,
administer oaths or affirmations, take testimony, and
compel the production of all information and
documentary evidence deemed material and relevant that
reasonably relate to the inquiry or investigation
undertaken by the Los Angeles Unified School
District's Office of the Inspector General (OIG) when
there is reasonable suspicion that a law, regulation,
rule, or district policy has been violated.
ANALYSIS
This bill:
1) Requires cafeteria fund expenditures to be included
as part of annual compliance audits for local
educational agencies.
2) Requires the Education Audit Appeals Panel to
revise the audit guide to include clear and
comprehensive guidance on what school districts may or
may not do with moneys in a cafeteria fund, as
specified.
3) Extends the sunset date of January 1, 2015, for the
OIG by ten years to January 1, 2025.
4) Requires the State Department of Education (SDE) 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 shall request sufficient federal
funding to hire the appropriate number of staff based
SB 302
Page 3
on that assessment.
5) 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.
6) Requires the SDE 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.
7) Requires school districts to maintain all financial
records related to its cafeteria fund for five years.
8) Provides that Chapter 3 of Part 23 of the Education
Code (commencing with Section 38000) regarding school
cafeterias does not authorize a school district to
charge a food service program any charge prohibited by
state or federal law or regulation or guidance.
9) 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.
10) Provides that a school district shall not withhold
from its food service director any financial records
involving school nutrition programs.
STAFF COMMENTS
1) Need for the bill . This bill enacts the various
recommendations provided in the Senate Office of
Oversight and Outcomes report, "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. According to the report, the
State Department of Education (SDE) has ordered eight
school districts in recent years to repay nearly $170
million to student meal programs. School districts
SB 302
Page 4
have been illegally dipping into student meal funds
and misappropriating them when they are intended to
feed low income students. The misappropriations are
in most cases attempts by school districts to use
cafeteria funds to pay for a greater share of
personnel, utility, and other costs. The Senate
Office of Oversight and Outcomes has found that
officials from SDE candidly acknowledge they have no
idea how big the problem may be and fear they may have
uncovered only a hint of the ongoing abuse.
2) Staff amendments . As part of the report, the
Senate Office of Oversight and Outcomes recommended
that the Legislature should consider eliminating or
extending the sunset date for the Los Angeles Unified
School District's Office of Inspector General (OIG).
SB 302 proposes to extend the sunset date by ten
years, from January 1, 2015, to January 1, 2025.
While the OIG has documented the district's
misappropriation of cafeteria funds, it was originally
established in response to criticism over the
district's attempt to build a new downtown school on
expensive property that later turned out to be
contaminated. While the investigation of the
district's cafeteria funds appears prudent, would the
bill's other provisions requiring audits and guidance
on cafeteria fund expenditures provide sufficient
changes to the oversight system of student meal funds?
Is it necessary to extend the sunset date by ten
years for this purpose? Staff recommends removing the
provision to extend the OIG's sunset date to allow the
Legislature additional time to assess whether the
authority for the OIG should be extended.
Additionally, the existing sunset date is over a year
and a half away so it is not critical that a decision
be made at this time.
SUPPORT
California Food Policy Advocates
OPPOSITION
None on file.
SB 302
Page 5