BILL ANALYSIS �
SB 302
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Date of Hearing: July 3, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 302 (Canella) - As Amended: June 19, 2013
Policy Committee: Education Vote:7-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill makes the following changes to a school district's use
of cafeteria funds:
1)Requires cafeteria fund expenditures to be a part of annual
school district financial and compliance audits.
2)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 (USDA). Further
requires SDE to request sufficient federal funding to hire the
appropriate number of staff based on that assessment.
3)Requires SDE to prepare simplified guidelines that address
most of the common acceptable and unacceptable charges to
cafeteria funds. Further requires SDE to post all enforcement
actions for the misappropriation of cafeteria funds on its
Internet website.
4)Requires a school district to maintain all financial records
related to cafeteria funds for five years and prohibits a
school district from charging a food service program any
charge prohibited by state or federal law or
regulation/guidance.
5)Prohibits a school district from withholding any financial
records involving school nutrition programs from its food
service director.
6)Repeals statute allowing a school district with an ADA of over
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100,000 to expend money from its cafeteria fund generated from
the joint sale of items between the cafeteria and an
associated student body store, as specified.
7)Repeals statute allowing a school district to establish and
maintain a cafeteria fund reserve for the purchase, lease,
maintenance, or replacement of cafeteria equipment, as
specified.
FISCAL EFFECT
1)Annual, GF/98 state reimbursable mandated costs, likely in
excess of $600,000, to maintain all financial records related
to cafeteria funds for five years. This cost will likely in
increase to the low millions as it becomes necessary to store
multiple years of records.
2)GF administrative costs, of at least $60,000, to prepare
simplified guidelines and to post information on its Internet
website, as specified.
COMMENTS
1)Purpose . In February 2013, the Senate Office of Oversight and
Outcomes (SOOO) released a report on cafeteria funds entitled:
Food Fight: Small Team of State Examiners No Match for Schools
that Divert School Meal Funds. The report charges school
districts are "illegally dipping into student meal funds,
misappropriating millions of dollars intended to feed
California's poorest children." Specifically, the report
states: SDE "has ordered eight districts to repay nearly $170
million to student meal programs. Perhaps more troubling,
department officials 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?" Furthermore, SOOO states
California must pay the federal government if funding cannot
be recouped. As highlighted by the report, "if the state fails
to force repayment of misappropriations or refunds due from
food service accounts, the federal government collects the
unpaid amount from SDE. Over the past two decades, the
department has had to pay the USDA more than $3 million that
it could not recoup from food service accounts. Those bad
debts often involved agencies, such as child or adult care
centers, which had gone out of business."
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This bill includes provisions meant to ensure school districts
do not misuse cafeteria funds.
2)2013 Budget Action related to cafeteria funds . AB 110, the
2013 Budget Act and AB 86 (Budget Committee) contain the
following provisions related to school districts' use of
cafeteria funds:
a) SDE reporting requirement and allocation for school
nutrition monitoring. The budget bill requires the SDE to
report to the legislative budget committees, the Department
of Finance, and the Legislative Analyst's Office, by
October 1, 2013, on its "staffing needs for child nutrition
compliance activities and the outcome of its planned review
of cafeteria funds for 30 school districts."
In addition to the reporting requirement, AB 110 allocates
$1 million in federal funds "for increased costs associated
with new federal requirements to increase the frequency of
compliance reviews for child nutrition programs?"
This bill contains similar provisions to those referenced
above. The committee recommends removing these provisions
from the bill given the issue of SDE staffing needs is
addressed in the budget act.
b) State audit of cafeteria funds. AB 110 allocates $1.4
million to the California State Auditor's Office "to
conduct an independent audit of the use of cafeteria funds
by local education agencies (LEAs). The audit shall
provide [information] related to the use of cafeteria funds
expended at a sample of LEAs, and the oversight of those
funds by SDE." The audit is required to be completed by
March 1, 2014.
c) Repeal of cafeteria fund statutes. AB 86, the K-14
education trailer bill, repeals two statutes related to
school districts' use of cafeteria funds. The statutes are
as follows and are contained in this bill:
i) Allowing a school district with an ADA of over
100,000 to expend money from its cafeteria fund generated
from the joint sale of items between the cafeteria and an
associated student body store, as specified.
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ii) Allowing a school district to establish and maintain
a cafeteria fund reserve for the purchase, lease,
maintenance, or replacement of cafeteria equipment, as
specified.
The committee recommends removing these provisions from the
bill given they are already repealed by AB 86.
3)Related legislation . AB 626 (Skinner), pending in the Senate
Health Committee, makes numerous changes to school nutrition
standards to conform with the federal Healthy and Hunger Free
Kids Act, implements recommendations of a Senate report
relative to use of cafeteria funds, and deletes obsolete
provisions.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081