ladies and gentlemen, thank you for standingby and welcome to the administrative review training webinar on resource management. atthis time all lines are in a listen-only mode, so if you should require assistance from anoperator please press *0. i'd also like to remind you that today's conference is beingrecorded. i'll now turn the conference over to your host, lynn rodgers-kuperman. pleasego ahead. good afternoon, everyone, and thank you for joining us today. i'm joined todayby eleanor thompson and eric lai, eleanor's out of our midwest regional office and hasbeen a member of the smarrt team, as well as eric, he's here at headquarters with us,and they will be taking a turn speaking and going over the q&as with me today. thank youfor joining us for the webinar and, as she
indicated, we're going to be going over thearea of resource management. this is one of two webinars that we're holding on the areaof resource management in the new administrative review process. our hope today is that thewebinar will provide you with a basic understanding of the federal cost principles, direct andindirect costs, and the concept of cost allowability in the child nutrition programs, as well ashow state agencies should conduct an administrative review that examines these things at the schoolfood authority level. we recognize that we have a variety of different participants onthe webinar: some of you who may be more familiar with this area, and others who are just gettingup to speed in the area of cost allowability and direct cost and those things. for thoseof you who are in the beginning stages of
the learning about this area and the overallreview process, please note that this webinar is really aimed at trying to give you a betterunderstanding of these areas, but it cannot substitute for practical experience and learningfrom your peers and from other state members. so as you delve into the cost allowabilityand direct and indirect cost, you will likely find that you have questions that come upoccasionally about the allowability of certain expenditures that perhaps don't fit neatlyinto one category or another. cost allowability isn't always a black-and-white issue or area,and many allowable costs can be treated as either direct or indirect. our hope and ourgoal for this webinar is that, at the end of the webinar, we can provide you with somebasic training and some additional resources
for where you can look if you do need assistance.let's talk about why is monitoring resource management important. as you are well aware,the financial pressures on the school food authority are just numerous and significant,and we all know that. we're doing more with less. school food authorities are taxed withproviding nutritious, well-balanced meals efficiently and effectively to all students.they must abide by a number of different resource management requirements and principles designedto safeguard program resources and to ensure that sufficient funds are available to meetthe nutritional needs of students. why is it important that you understand allowablecosts and indirect costs? the money that is spent out of the non-profit school food serviceaccount is for the operation and maintenance
of school meal programs. we have to recognizethat we're the stewards of the taxpayers' money, and we need to ensure that these moniesare provided to the programs for their intended purpose, and to provide nutritious meals tostudents and not for unrelated reasons. it's key to understanding allowable costs and indirectcosts so that you can safeguard those funds, and to recognize that those funds are beingused in accordance with cost allowability rules to pay for expenses that are necessaryand reasonable. before we discuss direct and indirect costs, it would be helpful to brieflysummarize how reimbursement works in the school meal programs. you know we talked, when weput these together, about how there were so many different directions we could have gonewith these slides and different orders that
we could have put the slides in, but we'rehoping that the way we've laid them out for you today will be the best approach in providingyou with that basic understanding. i do want to note that this section's going to provideinformation on how the sfa, the school food authority, is reimbursed for providing mealsto enrolled students in the child nutrition programs, such as buying food, preparing meals,and serving meals. for the purpose of this webinar today, we'll primarily use the term"school food authority," or "sfa," which is usually the school district, or the entitywithin the school district that operates the school food service. we will, however, talkabout local education agencies, or leas, when we cover indirect costs, and we all know thatthese terms are often used interchangeably
so we're doing our best to be as clear aspossible. reimbursement in other programs: in many federal programs, local administratorsbill the federal government for reimbursement of the costs they incur to administer theprogram. the federal child nutrition programs work a bit differently, however, the sfa doesnot bill usda for costs associated with running these programs. so unlike many other programsthat are also subject to the circulars in terms of cost allowability, you have to recognizethat in our programs it is not a pure, straight reimbursable program. instead, school foodauthority reimbursement is driven by a meals times rate reimbursement formula rather thanthe reimbursement of actual costs. as you know, school food authorities claim a numberof free, reduced-price and paid meals to their
state agency, in order to receive reimbursementthe meals must meet all federal requirements. and the graphic, hopefully, will provide youwith a visual understanding of how that takes place. now, the amount of reimbursement aschool food authority receives for the meals is based on the number of free, reduced-price,and paid meals it served. in order to be reimbursable, the meals must, again, abide by federal governmentwide and program-specific regulations such as the federal cost principles, which i'mgoing to talk about a bit more in a minute, procurement rules, and other requirements.as this slide notes, school food authorities receive certain monies for each meal served.this is not free money, we all know this, there are strings attached, and those stringsare that the meals must conform to program
regulations and that they need to adhere tofederal government-wide rules. one of the most significant responsibilities a localeducation agency has when participating in the federal child nutrition programs is themanagement of the non-profit school food service account. what is the account? for those whodon't know, let's just talk about what that is. well, the non-profit school food serviceis the account in which all reimbursements and revenues from all food service operationsconducted by the school food authority are deposited. in addition, the account may accumulatenon-federal funds used to support paid lunches and revenue from non-program foods which arefoods that effectively compete with reimbursable meals. program regulations require a schoolfood authority to establish a non-profit school
food service account in which all reimbursementsfrom all food service operations conducted by the school food authority, principallyfor the benefit of the schoolchildren, and that includes state reimbursement and otherrevenues, such as student meal payments and non-program food revenues, are retained, andnot only retained in the account, they are supposed to be used only for the operationor improvement of the non-profit school food service. so regardless of the varied natureof the revenues coming into the account, once those funds are deposited into the accountthey commingle and take on a federal identity and are then subject to federal rules. wedo want to make you aware that the food and nutrition service agency is in the processof developing further guidance to state agencies
on revenue from non-program funds such asa la carte items and adult meals, and its treatment is part of the non-profit schoolfood service account. so that should be coming out sometime in the next month or so. non-profitschool food service revenues may be used for food, equipment, and personal use to operatethe meal program. these revenues cannot be used for the purchase of land, buildings,or general purpose equipment such as office equipment, information technology equipmentin systems and motor vehicles, or for the improvement of land, buildings, or generalpurpose equipment unless those purchases were approved by ... in advance. we will talk moreabout allowable costs shortly. now, before i jump into, and i know i keep saying we'regoing to talk about allowable cost in more
detail, but before i jump into that i wantto provide you with a brief description of what direct and indirect costs are and giveyou some more examples of each type of cost. in general, the total cost of a program, function,or activity includes both indirect cost and direct cost. many of you may be familiar withthe federal regulations in title 7 which encompass the school meal programs, but you may be lessfamiliar with title 2 of the u.s. code of federal regulations, 2 cfr part 225, whichprovides a central location for the office of management and budget and federal agencypolicies on grants and agreement. it specifically focuses on principles and standards for determiningcosts for federal awards carried out through grants, cost reimbursement contracts, andother agreements with states, local governments,
and federally recognized indian tribal governmentsto include the treatment of direct and indirect cost; 2 cfr part 225 is the resource for stateagencies and school food authorities who want to learn more about direct and indirect costsas well as allowable costs, which we're going to discuss in a moment. let's talk about whatdirect costs are. direct costs are costs incurred specifically for a program or other cost objective.a cost objective basically refers to a function, organizational subdivision, contract, grant,or other activity for which cost data is needed and for which costs are incurred. further,direct costs must also be readily identified for a particular objective or goal, such asa school food service. if a cost cannot be easily attributed to one function or organizationalsubdivision and is instead incurred for the
benefit of multiple programs or functions,it should be considered as an indirect cost. a good question to ask when trying to determineif a cost is direct or indirect is who's benefiting from the sfa having incurred the cost. wasit just the school food service? now, this next slide shows some examples of direct costsunder the school meals program, such as food costs, wages, and staff salaries of schoolfood authority employees, food service supplies, and promotional materials related to foodservice. these costs are borne by the school food service to accomplish its mission offeeding children, and are not attributable to other functions within the lea. indirectcosts, though, on the other hand, are costs that are generated for the benefit of multipleprograms or functions. they cannot be easily
identified specifically with one program,but they are necessary for the general operation of the school food authority. indirect costsmust be assigned to the programs that they benefit through an allocation process, whichwe're going to talk about shortly. what distinguishes a direct cost from an indirect cost is theextent to which it can be identified with a specific program, function, or activitythat benefits from the sfa, having incurred the cost, rather than the nature of the goodsor services themselves. in terms of indirect cost, you might typically see costs that supportadministrative overhead functions, such as fringe benefits, accounting, payroll, purchasing,facility management, and utilities. you may have accounting staff that provide accountingservices not just for the school meal operation,
but across the district, it may be districtwide, it may be school wide, but again, those accounting services may be provided to morethan our specific program. look at this next chart. this gives you examples of typicalcosts, and you can see on the left we have direct costs and on the right indirect costs.this is just to show you some typical school food authority costs and how they may be categorized.you'll see wages, the cost of food and supplies, and maybe a material specifically relatedto food service are all direct costs. capital expenditures are direct costs, but there arespecial rules that apply to these costs, such as prior approval by the state agency of capitalexpenses above 5,000. land and buildings must also receive approval before funds can bespent. indirect costs include items such as
human resources, utilities, and trash, sothink of human resources as a function that would support more than one program. pleasekeep in mind that you can treat almost any cost as direct as long as you can find a clear,measurable and meaningful way to attribute the expenditure to a specific cost objective.for instance, some leas may install a separate meter to capture how much power is used specificallyfor the lunchroom and kitchen, allowing the lea to treat these utility costs as directas long as the lea consistently treats them as direct costs. we're going to talk a bitin a moment about what we mean by consistent treatment of direct and indirect cost. buti do want to, at this juncture, give a quick disclaimer, and that is that the examplesthat we're going to be using in this presentation
may not, and most likely will not apply toevery state or every school food authority. this can be an area where there are exceptionsto every example. what the examples are intended to do here is to illustrate the concepts we'representing, and that's what we want you to really focus on. so if a particular exampledoesn't apply to your particular state or school food authority, don't focus on that.the main takeaway for us, for you guys, is that you learn the principle and the contextof what the examples are attempting to demonstrate. now, i had mentioned that we were going totalk a little bit more about allowable costs in more depth, and so let's talk now and letme give you some background about several cost principles and how they impact cost allowability.again, we wanted to talk a bit about direct
and indirect cost because you need to understandthe nature of the cost, as opposed to whether or not they're just allowable. so what arethe federal cost principles? well, for our programs the federal cost principles providethe ground rules for how funds from the non-profit school food service account may be spent.the federal government has published uniform administrative requirements for grantees andsub-grantees. which in the school meals programs refers to states and school food authorities.these uniform administrative rules set forth general guidelines on how administrative matterssuch as, but not limited to, procuring goods and services, how to assess costs to ensurethey are allowable, and how to properly dispose of equipment. these government wide rulesare codified for usda at 7 cfr part 3016 and
7 cfr part 3019. a good question would be:where do i find these federal cost principles? well, as you see from the chart, the organizationreceiving the award at the state, local, or indian tribal organization or government,the source of the applicable cost principles would be 2 cfr part 225, which formerly formost people they think of this as omb circular a87 and also 3016 are the uniform administrativewide rules. for non-profits it would be 2 cfr part 230, folks probably know it as formerlyomb circular a122 for the cost principle part of it, and also the uniform administrativerequirements ... 3019. it's important to know where to look for them to understand why arethese cost principles important. the reason it's important to be familiar with them isbecause they provide helpful information to
a state agency or a school food authorityabout the applicability and allowability of different types of costs and expenditures.and this is critical because direct and indirect costs may only be charged to the non-profitschool food service account if they are allowable. so these documents provide good guidance andmany examples about what types of costs fall into the allowable and un-allowable categories.not only do they, though, provide useful information about the allowability of direct or indirectcosts, but they also provide the general criteria and various allocation methodologies an leamay use for charging or billing costs as direct or indirect. an easy way, maybe, to wrap yourarms around the federal cost principles is to understand that the non-profit school foodservice account is basically like the sfa
bank account. the sfa has a debit card forthis account, so it may access the monies that are held there. however, the sfa mayonly charge for goods and services that adhere to the federal cost principles. now, we talkedabout 2 cfr 225, and within that there's something called appendix a, which details the generalprinciples for determining allowable costs. this criteria list for allowable costs helpsthe sfa determine which costs may be allowable and thus reimbursable through the non-profitschool food service account. and we're going to talk more about these requirements shortly,but you can see from the slide that there is a list of things that need to be considered,whether they're necessary, reasonable, allocable, legal net of certain rebates, discounts, andcredits, etc. in addition to appendix a, the
federal cost principles are also driven byappendix b of 2 cfr 225, and appendix b details the principles to be applied in establishingthe allowability or un-allowability of certain expenditures. these principles apply whethera cost is treated as indirect or direct. appendix b classifies costs as falling under one ofthree categories: allowable, allowable with prior state agency approval, or unallowable.appendix b lists 43 cost items, such as audit costs, bad debt, communication costs, maintenance,operations and repair costs, traveling, and training. however, the list is by no meansexhaustive. the failure of appendix b to mention a particular cost item is not intended toimply that the omitted cost is allowable or un-allowable. the sfa must make a determinationof the allowability of a cost not listed in
appendix b by studying the treatment of similaror related cost items. really, school food authorities should use both appendix a andb to determine if specific costs are allowable. even if appendix b classified the cost asallowable, the cost still must meet the criteria in appendix a, which include is the cost necessary,reasonable, or allowable. the cost must also abide by child nutrition programs specificlimitations on activities, for which funds must be made. and we're going to look at someexamples shortly, but the key thing there, again, is to recognize that appendix b mayidentify costs as allowable, but it also must meet the test of being reasonable, necessary,and allocable. you can have a cost that's necessary to the program, but it's not reasonablein terms of cost. now we're going to talk
a little bit more about allowable cost, andi'm going to turn this part over to eleanor thompson, who i had introduced earlier, andshe is from our midwest regional office. so, take it away, eleanor. thank you, lynn. goodafternoon, everyone. now, let's talk about the process for determining cost allowability,in other words what does an sfa need to consider when determining if a cost is allowable ornot. to determine the allowability of a particular cost an sfa must follow a multi-step processbefore it charges the non-profit school food service account for that cost. first, thesfa should check 2 cfr part 225 or 2 cfr part 230 if it's a private non-profit school, includingappendix a that provides the basic guidelines pertaining to a determination of a cost allowabilityor reimbursement from the non-profit school
food service account, and appendix b, whichprovides a list of different types of costs and whether or not they may be consideredallowable, and lynn talked about appendix a and appendix b in her previous slides. next,the sfa should review the federal program regulations, such as 7 cfr 210, that pertainto the national school lunch program, as well as fns policy guidelines that may providemore detail about the allowability of certain costs. finally, the sfa must apply these collectiveprinciples to the cost that is incurred and make a determination as to whether or notthe costs may be reimbursed through the non-profit school food service account. if it's not,other funding sources outside of the account, such as the lea's general fund, may be usedto pay for the cost. we showed you this slide
earlier with the information from appendixa of 2 cfr 225, which again provides the criteria a direct or indirect cost must meet beforeit may be considered allowable. a cost must meet all of the cost allowability requirementsincluded in this list. now, i'm going to highlight a few of these provisions in a little moredetail. first, a cost may be allowable if it's necessary. a cost is necessary if thelaws, program regulations, or fns policies pertaining to the program make it clear thatthe non-profit school food service cannot operate without incurring the cost. for instance,a school food service cannot operate without incurring the cost for food for reimbursablemeals. in order for a cost to be allowable, the cost must also be reasonable, meaningthat it passes the prudent layperson standard.
this standard means that the cost of the productpurchased is no more than what a reasonable person would pay under the same circumstances.the cost must be the result of sound business practices and competitive prices.now, the criteria to help determine necessary and reasonable costs, in order to determinethat, an sfa should ask the following questions to help determine whether a cost is necessaryand reasonable. how does the cost contribute to achieving an objective of the child nutritionprograms? is the cost recognized as ordinary and reasonable for the operation of the childnutrition programs? and would a prudent person find the costs to be reasonable under thecircumstances? additional criteria to help determine necessary and reasonable costs includewould a taxpayer deem the cost to be reasonable
in light of the child nutrition programs'objectives? is the cost charged at a fair rate, or do alternatives exist that may bemore cost effective? and finally, could the school food authority defend the purchaseto the state agency, to the media, auditor, or other stakeholders? the answers to thesequestions should help the sfa determine if a program cost is necessary and reasonable.now, before we move on, let's talk about one example to further assess where a cost isnecessary or reasonable. for instance, school a needs a water cooler to meet the new waterrequirements under the healthy hunger free kids act. the cost is reasonable comparedwith those out on the market. there's also a different model, however, with the schoolfood service director's favorite sports team
logo on the door. that model costs an extra$500. in this example purchasing the more expensive model with the logo is both unnecessaryand unreasonable. now, let's discuss some additional criteria for allowable costs. onecomponent of cost allowability is whether the cost is allocable to the program. thismeans that the sfa is able to estimate, for example, how much the food service benefitsfrom the expenditure and how much may benefit a different cost objective. when thinkingabout costs and ensuring that only allowable costs are charged to the program, one needsto consider cost allocation. cost allocation encompasses the idea that costs are chargedto programs that benefit from them. in order to be allocable, a cost must enhance or supporta program. depending on which program functions
and/or activities benefit from the cost andthe extent to which each benefited, a cost may be allocated to its cost objectives throughdirect or indirect cost allocation. let's consider an example. here's an example inwhich joint space is being used by two programs. the school food authority serves meals inthe gym, and the lea also uses the gym for physical education classes. it would be unallowablefor the lea to charge the school food authority 100% for the electricity and for heating andcooling costs used in the gym during school hours since other programs also use the spaceand also incur costs. in this example the lea could charge the sfa for one-third ofthe total utility costs to the food service as a direct cost. again, the wages and salariesof school food service employees who are employed
by the sfa solely for the meal service aretypically classified as direct costs in this example number two. their salaries and wagesare 100% attributable to the costs associated with running a school food service, so inthis example we're talking simply about the salary of an employee who only prepares andserves school meals. in this case their salary, again, is 100% allocable to the sfa's schoolfood service account. in this additional example, a school secretary helps all programs, functions,and activities of the lea. we know that in many school districts the school secretaryis the employee who distributes free and reduced price applications and collects the completedapplications. however, those school food related activities make up only a small portion ofthe school secretary's responsibilities, which
are typically much broader and involve greetingvisitors, answering phones, supporting the work of the principal, and many other tasks.in this example the amount of time the school secretary spends on collecting and distributingfree and reduced price applications is allocable through the use of a mathematical formula,which we'll talk about shortly. the cost of the school secretary's time in this examplewould be classified as an indirect cost. an sfa's non-profit school food service accountmay not be used as an open-ended bank account to support the other cost objectives at anlea. let's take the example i provided earlier for harry potter elementary. the sfa at harrypotter elementary can't be charged for all of the utilities used in the gymnasium ifother entities also use this area of the school
for non-food service related activities. thesfa should not be billed more for electricity and gas for the purpose of reducing the costother school functions or departments must pay for the services. the bottom line is anlea cannot charge a school food service indirect costs unless it also charges them to its otherdepartments. a school district cannot single out the school food service for special treatmentand charging costs, but rather must treat the food service the same as all its otherdepartments. now, as previously mentioned, in order for a cost to be considered allowableand reimbursable through the non-profit school food service account the cost must be treatedconsistently across all federal programs, not just the child nutrition programs. a costmay not be treated as a direct cost under
the child nutrition programs if similar costsincurred for the same purpose in similar circumstances has been allocated to other federal programsas an indirect cost. now, let's look at an example. in this example the school food servicestaff conducts particular functions, such as procurement, that are also conducted bythe lea for other departments. in this instance the food service staff conducts a procurementfor food products, the time spent on procurement activities are treated as a direct cost, thelea, however, conducts procurement for paper products for all departments, including theschool food service. however, the time the lea staff spends on procuring paper productsis treated as an indirect cost. the question then arises from this example, is whetherthe sfa is treated consistently, because the
salaries of food service workers conductingprocurement for food products is a direct expense to the non-profit school food service,while the lea bills the non-profit school food service account for the salaries, ora prorated portion of them, of the staff procuring paper products as an indirect cost. what weknow is that there's no inconsistent treatment in this case, because the school food serviceis charged directly for the procurement of food products, which benefits only the schoolfood service, and indirectly for the procurement of paper products, which benefit school foodservice and other departments within the school district. so the costs are treated consistentlyin this example. applicable credits, and in this case another requirement of cost allowability,is net of applicable credits. and what this
means is applicable credits refer to reductionsof expenditure type transactions that offset or reduce expense items allocable to federalawards as direct or indirect costs. examples of applicable credits include, but are notlimited to, purchase discounts, rebates, credits, or allowances and adjustments of overpaymentsor erroneous charges. to the extent that such credit accruing to or received by the sfarelates to an allowable cost, they must be deducted from the costs charged to the non-profitschool food service account. for instance, child nutrition program regulations requirethat an sfa may only pay for costs in a cost reimbursable contract that are net of allrebates, discounts, and other applicable credits. allowable costs must also be adequately documented.this criterion for an allowable cost does
not imply the existence of a one-size-fits-alldefinition of adequately, it simply means that the record of the child nutrition program'soperation must be able to stand on its own without depending on augmentation, interpretation,or spin by the program operator. now, let's look at some examples of allowable and unallowablecosts. one of the challenges of determining allowability of costs is that in some instancesa cost may not be allowable, while in others it would be acceptable. this is why the reviewermust look at appendices a and b of 2 cfr 225 to first determine if the cost is reasonable,necessary, and allocable, and meets additional criteria included in appendix a. the firstitem we have on this list is food, and on this particular list, as we know, hamburgerpatties are allowable because food costs are
necessary as part of the sfa's operation.so food would be considered an allowable cost. under the category of labor, for the schoolsecretary costs associated with the school secretary may be allowable if the secretary'swork benefits the school meal programs, and we talked a little bit about this in a previousexample. in such cases the sfa would need to prorate costs for the time the secretaryspends on program tasks. the secretary's time could also be paid as an indirect cost. alsounder labor, the time spent by a food service assistant, this is an allowable cost as partof the meal service, because it directly benefits, again, the meal service and the goal of providingmeals. then we have the other category of expenses. our first example is unpaid chargesand bad debt. in terms of allowable and unallowable,
the non-profit school food service funds cannotbe used to pay bad debt arising from uncollectable accounts and other claims. also under theother category is, for example, is a school board dinner and whether or not that's allowableor unallowable it really depends. for instance, if the cost of the dinner, including the costof staff to prepare and serve the meal, is reimbursed to the non-profit school food serviceaccount by the school board or another entity, the cost may be allowable. if the school foodauthority, however, is expected to swallow the cost of all or part of the dinner, thecost would likely be unallowable even if the board is discussing sfa business. a dinnerwould not be considered a necessary expense in order for the board to address sfa issues.a new refrigerator would fall under the capital
equipment as general purpose equipment. thesfa would need to secure prior approval for this item if its cost is $5,000 or more inorder for this expense to be considered allowable. and then finally, renovating a kitchen wouldfall under the maintenance operations and repairs category of appendix b of 2 cfr 225.these are the costs associated with normal repairs and alterations. maintenance and repaircosts are allowable as long as they keep property in an efficient operating condition, don'tadd to the permanent value of the property, or significantly prolong its intended lifeand are not otherwise included in rental costs or other space charges. fns has allowed limitedrenovations within the inside perimeter of a kitchen or cafeteria space, with the requiredprior state agency approval. renovations purely
for aesthetic reasons would not be consideredan allowable cost. those were just some examples of common allowable and unallowable coststhat may come up. next we're going to talk about how to develop and apply an indirectcost rate to ensure costs are allowable and properly qualified as direct or indirect costs.the u.s. department of education requires each state educational agency or sea, to negotiatean indirect cost methodology for any local education agency or lea under its jurisdictionthat requests the methodology. lea will be used in this section of today's webinar, sohere we'll talk a little bit more about the local education agency. allowable costs, bothdirect and indirect, must be identified in a consistent manner. an lea must identifyindirect costs by using the same methodology
to allocate certain shared costs across theentire spectrum of its federal programs. for instance, an lea may participate in a numberof federal programs, such as title 1, to help educational agencies improve teaching andlearning in high poverty schools, and federal funding under the individuals with disabilitieseducation act, as well as in the federal child nutrition programs and multiple programs inwhich it may participate. the state educational agency and lea would have to determine howto allocate these indirect costs from multiple programs to the applicable federal programs.the solution for how to do this is that federal cost principles exist in part because thelocal education agency or other program operators would find it difficult to use a differentmethod of allocating shared costs to grants
from each of its federal awarding agencies.to prevent the need for multiple allocation methods a single federal agency known as thecognizant agency, speaks for all the federal awarding agencies in negotiating across theboard allocation methodology for leas receiving federal grants from multiple programs. thecognizant federal agencies for all state education agencies that oversee the federal meal programsis the u.s. department of education. the u.s. department of education requires each stateeducation agency to negotiate an indirect cost methodology for every lea under its jurisdictionthat requests one. not all leas charge indirect costs, but for those that wish to the stateeducation agency must provide a methodology that the lea may use to calculate its indirectcosts. the state education agency is thus
the de facto cognizant agency for the purposeof providing indirect cost methodologies for each of the leas under its jurisdiction thatrequest one. now, how are indirect costs assigned? allocation is a mathematical exercise usedto assign indirect cost to particular programs and other cost objectives so that each programor other cost objective bears a portion of the indirect cost that is commensurate withthe benefit received from the cost. use of this methodology provides a short hand approachto determining, in a reasonable manner, the proportion of indirect costs each programor other cost objective should incur. allocation is a method to assign to the sfa its fairshare of indirect costs, such as its portion of utility bills attributable to the use ofthe kitchen and cafeteria. the mathematical
exercise used to determine how to allocatethe indirect costs entails applying a calculated indirect cost rate to a direct cost base.let me explain what i mean by this. again, an allocation methodology normally entailsapplying a calculated indirect cost rate to a direct cost base. an indirect cost rateis the method for determining the proportion of indirect costs individual programs likethe school food service should be charged. it is the ratio, expressed as a percentage,of the indirect costs to a direct cost base. an indirect cost pool is the sum of allowableindirect costs. the direct cost base is the sum of allowable and unallowable costs thatreceive a benefit from the costs in the pool. the resulting indirect cost rate is the devicefor determining, in a reasonable manner, the
proportion of indirect costs each programshould bear. as you can see from the equation on this slide, the indirect costs are includedin the numerator, and the direct costs are included in the denominator. the result isexpressed as a percentage or rate of the indirect costs to direct costs. the u.s. departmentof education, as we noted, negotiates an agreement with each state education agency to establishthe methodology the state education agency will use in negotiating indirect cost methodologieswith local education agencies. once the u.s. department of education approves the stateeducation agency's lea methodology, a delegation agreement is signed by the u.s. departmentof education and by the state education agency. under this agreement the state education agencygenerally distributes an indirect cost rate
proposal form to its leas and uses the datacollected to develop each lea's indirect cost rate. the indirect cost rate proposal shouldidentify all of the activities carried on by the department or unit and their attendantcosts. all activities must be included regardless of the source of funds used to pay for them.the indirect cost rate proposal should also incorporate those costs allocated to the departmentsor units, it should classify activities and their costs as direct or indirect, and itshould also eliminate from indirect costs capital expenditures and those stipulatedas unallowable under 2 cfr 225. and finally, the indirect cost rate proposal should alsocompute the indirect cost rate by dividing the total remaining in direct costs by thedirect cost base selected for distribution
of the indirect costs. the indirect cost rateproposal documents the development of the lea's indirect cost rate and direct cost base,and must be developed before the lea can receive reimbursements for indirect costs. it is absolutelynecessary before indirect costs may be charged for any expenses. now, once the state educationagency approves the indirect cost rate proposal, the end result is an indirect cost rate agreement.there are a few ways in which a state education agency might inform our local education agencyof the approved indirect cost rate. some seas, or state education agencies, issue a letterto each local education agency, while other state education agencies post the approvedindirect cost rates to their web site. one key piece of information that's included inthe indirect cost rate agreement is the time
frame for which the agreement is valid. indirectcost rate agreements expire annually, so local education agencies must use the most currentapproved rate for each fiscal year when determining its indirect costs. an indirect cost rateis simply a mechanism for determining fairly and conveniently within the boundaries ofsound administrative principles what proportions of departmental or organizational administrationcosts each program should bear. as previously mentioned, an indirect cost rate representsthe ratio between the total indirect costs and benefiting direct costs after excludingand/or reclassifying unallowable costs and extraordinary or distorting expenditures,for instance, capital expenditures and major contracts and sub-grants. the indirect costsin the numerator of the equation should bear
a reasonable relationship to the direct costsfrom the denominator. this will allow for each program or activity represented in thedirect cost base to assume their fair share of indirect costs when the rate is applied.now, why is this information important? school food authorities that are charged indirectcosts must be familiar with the information included in their indirect cost rate agreement,and they need to understand how it's applied. an sfa must have both its indirect cost rateand the corresponding direct cost base. we understand from talking with state agenciesthat some of their sfas may have trouble obtaining a copy of their indirect cost rate agreement,or securing all the information that it needs, and in that case the state agency should considercontacting the state education agency to help
the lea obtain the information. remember,as we've already noted, many costs may be classified as either direct or indirect. nextwe're going to talk about how to figure out how to categorize a cost as direct or indirect.the school food authority state education agency plays a role in determining if a costshould be categorized as direct or indirect. for instance, the indirect cost methodologythe state education agency prescribes for a local education agency may call for direct/indirectdistinctions. and in determining whether a cost should be charged as direct or indirectthe sfa is required to treat each item of cost in a consistent manner as a direct orindirect cost in accordance with the federal cost principles. a cost may be assigned tothe non-profit school food service as a direct
cost only if that cost item under the samecircumstances has not been charged to the other programs or cost objective as an indirectcost. some questions to contemplate in determining whether a cost is direct or indirect include:does the cost benefit multiple programs or other cost objectives, or solely the schoolfood service? does the cost have a direct relationship to the school food service? whatguidance did the federal cost principle provide for those costs? how are similar costs treatedin other cost objectives of the sfa? and also, how have the costs been treated historicallyby the sfa? these questions will help sfas determine whether a cost is direct or indirect.now, you'll recall that we provided examples earlier of allowable and unallowable costs.now we're going to provide an example of how
to categorize an expense common to all sfas:custodial expenses. as you're well aware, custodial expenses generally include the costsassociated with cleaning the entire school. some sfas charge custodial expenses directly.this is possible if the sfa documents for hours that custodians work specifically oncleaning the food service areas. this can be accomplished by a time reporting systemthat documents the exact hours that custodian cleans the food service area versus the restof the school. the sfa is then able to charge the custodial expenses associated with cleaningthe food service area as a direct expense. on the other hand, some school food authoritiescharge custodial expenses indirectly when they do not have a methodology for determiningthe cost item's direct relationship to the
school food services operation. custodialexpenses may be charged as indirect costs by including them in the indirect cost poolused to calculate the local education agency's indirect cost rate. custodial expenses mustbe charged either directly or indirectly in a consistent manner across all activitiesof the school food authority. this means that an sfa may not charge custodial expenses asa direct cost to the school food service and as an indirect cost for other programs. actualindirect costs such as utility bills, janitorial services, trash service, and others are oftenpaid from the lea's general fund and then billed to the non-profit school food serviceaccount. for example, unless the school district has separate meters or utility lines to servethe school food service assigning the charges
through indirect costs may be the only wayto identify them as costs allocable to the non-profit school food service. please keepin mind that while school food authorities are reimbursed under the meals times ratefunding model, direct and indirect costs for program services are billed or charged tothe non-profit school food service account. funds are provided for meals and these funds,plus state payments, student charges, and other funds accrue to the non-profit schoolfood service account to be used for program expenses. now, again, no matter how appropriatea cost may seem, costs may only be billed to the non-profit school food service accountwith appropriate documentation. child nutrition program regulations require that these recordsmust be retained for three years except that
if audit findings have not been resolved therecord shall be retained beyond the three year period as long as required for resolutionof the issues raised by the audit. errors in the way in which indirect costs may becharged can occur for different reasons, including mathematical errors and when indirect costsfor a service are included in the indirect cost pool for service that is also alreadycharged as a direct cost. for this reason it's important that the school food authorityhave the tools it needs to prevent incorrect indirect cost charges. how to avoid indirectand direct cost charges? well, the sea, the state education agency, is the provider, again,of the sfa's indirect cost rate and should be contacted if the sfa does not have theinformation. as previously mentioned, the
information may be sent to the sfa via letter,although some state education agencies communicate the indirect cost rate information throughtheir web sites. the sfa is responsible for double checking indirect costs that are billedto the school food service to ensure that the account is not charged more than it shouldbe charged. this review is a check-and-balance to protect the non-profit school food serviceaccount from overcharges by the local education agency. now, that we've covered some backgroundon how allowable costs and direct and indirect costs are determined, eric is going to provideyou with an overview of how allowable costs and direct and indirect costs should be reviewedduring the course of the administrative review. eric? thank you very much, eleanor. now, i'llgo into the next section and we're going to
look at how allowable costs should be reviewedduring the course of an administrative review. if you were able to attend one of our regionaladministrator review trainings, this chart will probably look familiar to you. at leastfour weeks prior to the on-site review state agencies will conduct a risk assessment todetermine whether an sfa will need a resource management and comprehensive review. if insufficientrisk for non-compliance exists, no comprehensive review is needed. but if sufficient risk isfound, the reviewer will examine the sfa's costs during the comprehensive resource managementreview. while other areas of that comprehensive resource management review may be conductedprior to the on-site review, the review of sfa's costs must occur on-site. so now thatwe have this general framework, let's look
at how a state agency reviewer will examineallowable costs during a comprehensive resource management review. the focus of the allowablecost monitoring area and the resource management comprehensive review is to do a few things.one is to test actual sfa expenses for compliance with allowable cost requirements; two, toidentify and correct any unallowable costs; and then finally, to ensure costs are adequatelydocumented and treated consistently. the steps for monitoring allowable costs are as follows.step one: review the most recently completed fiscal year's operating statement or statementof activities and select a sample cost. step two: determine whether the selected expenseswere allowable. and step three: ensure that the sfa keeps adequate documentation and allocatesexpenses consistently among local and federal
programs. so, a little bit more on step one.the state agency should advise the sfa to be prepared during the on-site review to providedocumentation to support and justify any expense charged to the school through its serviceaccount. the sfa's statement of revenues and expenses, also known as the statement of activities,or operating statement, will reflect funding sources compared against program expenses,administrative costs, and other operating commitments. the basic premise on which astatement of revenue and expenses is based is revenues minus expenses equals net income.now, the important thing to remember about a statement of revenues and expenses is thatit represents a period of time as compared to a balance sheet, which represents a specificpoint in time. the documentation should be
sufficiently detailed to identify all expensesby category and by line item. the costs must represent charges for actual costs, not budgetedor projected amounts. when reflecting the test sample of expenses, the state agencyshould take into consideration the size of the sfa and the expense amount, but also reviewa minimum of 10% of total expenditures. here's an example of what that means. you see herein this case there's a breakdown of the minimum values of expenses that would be reviewedhere, and on the first line you can see that since total expenses are $100,000, the stateagency here would be reviewing 10%, or $10,000, in this case. that 10% sample should includecosts from food, labor, and other expenses, and you can see those items in this examplehere. the state's review should include a
minimum of 10% of salaries and benefits, andit should also ensure that all employees paid are involved in the school meal programs.the state agency reviewer should also examine a minimum of 10% of food and food processingsupplies. so moving on to step two, the state agency should interview sfa staff about anyquestionable items and request invoices to substantiate the expenditures. your reviewcould include a few things. determining whether large or unusual actual expenses are allowableand properly documented; reviewing the salaries and benefits for employees who are duallyemployed by the lea's child nutrition program and other departments within the school districtto ensure expenses are prorated and fair, verifying costs that were approved by thestate agency, if required, and a case where
it would be required would be capital equipment,for example. also reviewing transfers out of the school through a service account bychecking whether the transfers ... benefit of the school food service, ensuring thatthe lea did not use child nutrition funds to pay for expenses for other programs operatedby the lea. and finally, identifying bad debts if they were charged or carried over to thesfa food service account, and also requiring corrective action to repay the sfa. now, ifnecessary when looking at the statement of activities or operating expenses, the statereviewer should ask the sfa: what was this expenditure used for? how was money spent,and for what purposes? if those are questions that the sfa cannot answer, the reviewer shouldfollow up. the sfa should have the ability
in its financial accounting system to trackand note how funds travel in and out of the non-profit school food service account, andsufficient documentation is required for program expenses and the sfa must be able to providethat documentation to the reviewer upon request. moving on to step number three, so federalregulations under 7 cfr 21014 require that expenditures and non-profit school food servicerevenues must be made in accordance with the financial management system established bythe state agency. the state agency reviewer should ensure that the sfa's program expendituresare documented and tracked in accordance with the state's financial management system. thestate agency reviewer should also check whether the sfa's compliance with any procedures -- i'msorry -- they should always check the compliance
with any procedures established by the stateagency for determining the allowability of program costs. again, all expenses chargedto the school food service account must be adequately documented to meet the allowabilityconditions. if costs are not supported by proper documentation, such as receipts, invoices,and under certain circumstances documentation showing prior state agency approval for theexpenditure, should be treated as unallowable. the state agency reviewer should also ensurethat the sfa has effective, internal procedures and practices to ensure that expendituresfinanced with federal funds are properly chargeable to the school food service account. if thereviewer does identify problems with the sfa's activity surrounding allowable costs, thereviewer must require corrective action to
fix those violations and the slide you seehere details some of the instances when the corrective action would be needed. and thosecorrective actions could include a required transfer of funds from the sfa's general fundto the non-profit school food service account. now, we'll go into our next section, lookingat how the state agency should review indirect costs during the course of that administrativereview. there's a number of documents that a state agency will need when it conductsa resource management comprehensive review of sfa's indirect costs. a list of some ofthe necessary records the reviewer will need to reference is included on this slide. soyou see those include indirect cost rate agreement, financial statements, a chart of accounts,and accounting records. so again, we'll go
through the different stuff here on how toconduct this portion of the comprehensive review. step one: the state reviewer mustensure that this sfa obtained an approved indirect cost rate from the state educationagency which should be included in the sfa's indirect cost rate agreement. this is requiredbecause the u.s. department of education requires that leas charging indirect cost of programsobtain a federally approved indirect cost rate. step two: the reviewer should ensurethat the sfa is applying the correct indirect cost rate established for the appropriatefiscal year to the correct direct cost base. now, both the indirect cost rate and the directcost base can be found in that indirect cost rate agreement. step three: when a cost benefitstwo or more cost objectives, the costs must
be allocated or distributed among them proportionateto the benefit each receives from that cost. allocation is necessary because it identifiesthe portion of the cost that has benefited, or will benefit the school food service. anallowable cost can be charged to the non-profit school food service account as an indirectcost with appropriate documentation, and that they must conduct transactions using federalprogram funds in the same way it conducts transactions with its own non-federal funds.a cost item must be treated consistently as direct or indirect in all activities of thesfa unless legislation, regulations, or guidance from an awarding agency dictates otherwise.a cost may not be assigned to a federal award as a direct cost if that same cost incurredfor the same purpose and similar circumstances
has been allocated to other federal awardsas an indirect cost. the reviewer must ensure that the sfa is not charged indirect costsvia methods that are inconsistent with the methodologies approved by the sfas in directcost rate agreement. for instance, the lea may not calculate indirect cost rates basedon a percentage of federal reimbursement, a percentage of food service revenues, orwhatever the lea needs to make up a general fund deficit. one example of an inconsistentmethodology that is not allowable is an lea charging the school food service account forelectricity costs based on square footage when not charging any other federal programfor electricity. the reviewer should also evaluate all other actions taken by the sfato ensure that indirect costs charged to the
school food service account are reasonable,necessary, and otherwise allowable to ensure that the proper rate was applied to the correctbase. step number four: it's unallowable for an sfa to build a non-profit school food serviceaccount for indirect costs from prior years unless an agreement exists to show that thesfa had been loaning the non-profit school food service account funds to cover the indirectcosts in one or more prior years with the expectation of repayment. in such cases thelea's accounting records should support implementation of the ... agreement. for example, a transferof funds from the general fund to the food service account might be recorded as a receivabledue from the food service account, or as an official inter-fund transaction posted tothe accounting records of the general fund
and the school food service each year, withthat indicating that a special loan had been made. step number five: the reviewer shoulddetermine whether costs are consistently treated as direct or indirect costs. the reviewershould also confirm that school food service accounts are not charged directly for expendituresthat are already included in the indirect cost pool, and this is also known as "doubledipping." step six, this is the final step in this sequence: the state agency reviewershould finally verify that documentation that supports actual indirect costs charged toa school food service account is accurate and complete. the state agency should reviewthe sfa's documentation and indirect cost calculations and compare the indirect costrate proposal submitted to the state education
agency with the approved indirect cost rateagreement. if the correct indirect cost rate and direct cost base were used, the stateagency should compute the number of the amount of indirect costs chargeable to the schoolfood service and compare this result with the amount of indirect costs actually billedto school food service to validate its accuracy. this is the same principle a reviewer useswhen the state agency double checks an sfa's claim for reimbursement. so basically you'retrying to answer the question, overall, did the sfa's math add up? now, in terms of correctiveaction for indirect costs, so here's some examples of where corrective action mightbe needed. the state agency would need to assess corrective action because of non-compliancewith indirect cost requirements, and each
of the instances you see on the screen thereviewer must develop a corrective action plan for the sfa to resolve the issue sufficiently.all right, and that takes us right up to our last couple of slides. i just wanted to wrapup and let you all know that this webinar, again, was designed to really provide youwith basic information about cost allowability, direct and indirect costs, and also the reviewprocedures for these areas as part of the administrative review. but, again, this hasbeen an introduction, so if your state is just starting out and looking more closelyat these costs and in a more comprehensive way at the sfa level, the slide that you seehere will be helpful, because it has a list of resources that are good places to startif you're looking for more information. and
on the next slide you'll see, again, additionalresources. in addition to the omb guidance federal regulations, and fns policy guidance,there's also online courses offered by the national school food service management instituteand those might be helpful as well. the u.s. department of education has also publishedits cost allocation guide for state and local governments, that was from september 2009,and that can be downloaded off the web. and then finally, state education agencies maypost information about allowable costs and indirect costs, so it's worth checking outthat information as well. and with that, we're at the conclusion of the presentation. thanksfor listening in and participating. as a reminder, you can access all the administrative reviewmaterials on the fns web site at the link
shown here on the screen. and we have sometime for questions, so i'm going to turn it back over to lynn rodgers-kuperman, and she'lltake us through some of the questions that have been submitted over the live meeting.hi, folks. thank you for that. i'm going to give everybody just a moment. we are takingwritten questions, so we have one or two that have been submitted, and in some cases weneed to obtain clarification on the questions that have been asked. so if folks want totake the next couple of minutes if they do have any questions. as we've said in priorwebinars those that we cannot get to we will do our best to respond and incorporate theminto the next webinar, which i believe we have one next week. okay, here's a questionwe did get already, and that is basically,
if you go back to slide 39, is there a waythat we can get back to 39? we'll see if we can pull 39 up for you guys. this was theone where, it was one of the examples that we had provided, and the question said, "slide39 said you would charge 30% for two hours of gym use for utilities, however, the restof it was being given heat and electricity. is this example correct?" what we think, andwe've tried to go back a little bit, back and forth and make sure we understood whatthey were asking, we think that what they're basically asking is well, what about the restof the school, are they responsible for some of the costs? so the answer to that is -- letus explain. yes, the rest of the school does pay their share too. for example, the wholeschool, think of it in these terms, the whole
school has a bill that represents 100% ofthe heating and cooling costs, based on the square footage 25% of those costs are to heator cool the gym. of the gym's 25% of the heating and cooling costs, 30% is allocable to thefood service operation. that's what we were trying to convey in that example. the foodservice is responsible for 30% of the gym's 25% of the total share because the food serviceuses the gym for two hours of the six hour school day. so hopefully that will make alittle more sense to folks. okay, the next question is: "what happens if a school foodauthority isn't under the jurisdiction of the sea and therefore doesn't have an approvedindirect cost rate agreement on file with them?" and we tried to seek a little bit ofinformation to figure out whether it was a
private school, or what the situation was.i want to point out, you know, the indirect cost guidance that we issued, it was eitherlast year or the year before, makes clear that in order to be able to charge an indirectcost rate to the program, to the grant essentially, you have to know what the rate bases are.you just can't charge any percentage. the reason we required the approved rate is becausesomebody needs to have gone through the process of assessing what the cost part in the baseand what the rate is. now, what we are going to suggest is, it sounds to us, based on theperson who submitted the question, that maybe they don't have this rate. and so our recommendationis that you contact your regional office and then we can work with them to help you figureout how to obtain a rate through a cognizant
agency and/or how to assess what your situationis and whether perhaps there is a rate that's available that you're just not aware of. sothat would be our recommendation in those scenarios, to contact your regional officeand if they need assistance we can work with them. but the key thing i want to get acrossis you can't just charge any percentage. it's a methodology to assess, you have to knowwhat's in your base before you go applying just any rate that's pulled out of the air.it has to be based on a calculation that makes sense and is meaningful to the program. okay.oh, we want to point out, somebody noted to us that the bottom of slide 55 says, "allowableand allowable," and that that is incorrect, and they are right. and that's a typo. wewill make sure that we fix this. the slide
should say, "at allowable and unallowablecosts." so for the person who sent that in, thanks for catching that. we try our bestto catch everything, but we've been doing a lot of webinars and a lot of slides. okay,give me a moment to see if there are any additional ones that have come in. i'm sorry, guys. we'rejust trying to sort through as the questions come in. one of them says, "can you pleaseshow the slide with the six review steps again?" we can do that. "are there often situationswhen indirect costs are reviewed for a sample of leas even when there's no apparent riskof non-compliance?" i need to see the slide again, if we're talking about the risk indicatortool. if anybody knows the number of that slide, maybe just send it in. can you typeit in, if anybody happens to know -- well,
we're sorting through them, but we don't knowthe specific number. let me see if i can go to another one. okay, here's another one:"if a school is painting the school with general funds and wants to charge painting of thecafeteria, 100% of the paint plus labor for the cafeteria, is that allowable?" and i'm going to try to answer this question inthe way i think i understand it. i think what you're saying is, okay, the entire schoolis being painted, again, remember, think back to our example, a program can be charged,either directly or indirectly, whether it's direct cost or indirect cost, for the coststhat are attributable and allocable to that program, so the program should not be bearing100% of the cost to paint the entire school. that would not be allocable, nor would itbe reasonable for them to pay for all the
paint to paint the entire school. now, ifthey wanted to absorb the cost of the paint to perhaps do something within the schoolfood service operations, which is the cafeteria space, just like if you added a refrigeratoror if you did a built-in refrigerator, those costs could be attributable, yes, to the non-profitschool food service account within that cafeteria space, or wherever it's housed, because thatmight be allocable to the program. but it should not be responsible for 100% of thecost to paint the entire school. okay, let me see if i can read anymore. i've got someand there's nothing there when i pull them up, so just bear with me. okay, here's anotherone: "when reviewing 10% of food supplies and other expenses, what period of time dowe look at, the previous school year or the
review month?" it would be the previous schoolyear. okay, we're still looking for that slide, i'm sorry, for that one question. the individualthat had asked for us to scroll through the slides with the six steps, we're going toscroll through them now. we did it already, but we realized we need to make people cognizantof the fact that we just did it. so it's not on one slide. it is on several slides. sowe are doing that right now. and that was for the question where it said, "can you pleaseshow the slide with the six steps again?" you know, hopefully folks know that they candownload these as handouts. i don't know that we said that in the beginning of the call,but you can do so. this question says: "i am surprised you said that an lea can assessutility charges on school food service accounts
based on square footage and percentage ofuse of that square footage. can you confirm that this would be an example of a directrate as opposed to needing a separate meter?" yes, there are many ways to attribute, orallocate cost to a program. it may be more common than we think where they can put ina separate meter, but that's not always the case and there are many ways to assess howto allocate cost. that is often in the past, they've used things such as time studies,square footage in a building because, remember, if a school food service operation is limitedto an area of a building, you can assess the total square footage of this space that theyoccupy and sometimes that square footage is a reasonable way to allocate the cost. andagain, these are, as we said, every situation
is different, so if you have more specificsand there's a reason why you find that that seems odd to you, feel free to send it inand we will do our best to answer it, at least by the next webinar if we can't get to ithere. "what impact would an ... contractor have on this review process?" now, i'm tryingto think about how to answer that. the review is being conducted by the state agency reviewers,so the impact that they would have on this process i suppose is it could certainly impactthe process if they were unwilling to share, if they made it difficult to assess thingswhile we were out there on site. i can't imagine that would happen. but certainly those areways, i suppose, they could impact the process. the school food authority is always responsiblefor the operations of their programs, and
so in my mind the only way that i can thinkthat you may be asking that question is whether or not they throw up road blocks when theprograms are being reviewed. again, as long as they're forthcoming while they're thereand the school food authority recognizes that they are responsible for ensuring that anon-site review, we can get in there and see the meals and if the records are available,there should be no real impact. okay, one question that we got was: "does the comprehensivereview need to be completely done on site?" and the answer to that is no. there are somelarge portions of it that are on site, but please go to your guidance and we are veryclear in that area of the resource management as to the aspects of the comprehensive reviewsthat have to be done on site and those that
can be done off site. one of the questionswe got, and we get this at every webinar is: "will these slides be posted on the web site?"they're available to you now to download. everything we are doing here in terms of thenew administrative review process will ultimately be posted back up and we will alert you guysto that. as we have mentioned in prior webinars, we are in the process of, after taking someof the edits we needed to make after all of the five national trainings and based on questionswe received trying to figure out how to better clarify information in the guidance and theguidance then has sort of a domino effect on the tools and everything, so while there'sno major changes we do want to be cautious and make sure that we've captured everythingbefore we put everything back up on the partner
web, which will be very soon. we are workingdiligently and very hard to get that material up while we're trying to conduct these webinars,because these webinars, you know, we have to do the work necessary to get these slidestogether. so, yes, everything will go up. and in fact, our advice at that point wouldbe once everything goes up, to take those documents and work from those, because theywill be those final versions, as opposed to any former documents that you had. again,i got another question on the paint one. "regarding the paint question, would it be allowableif just for the food service area?" again, i think that you need to assess whether that'san allowable cost. we have talked in the past and we've put out guidance on what we callrenovations to the school food service area,
and there are renovations and this would certainlyfall under that classification, where renovations can be paid for to the school food serviceoperations. now, this is where, and i always hesitate to answer these without knowing allof the information, but there are some expenditures that should be borne by the county or by theschool in terms of these structures, you know, whether it be a school or things that shouldbe borne by the county. and in terms of grading or upkeep on those things, you know, i thinkthat i would need to give some consideration to whether the need to paint that area providesand improvement to the school food service operations and/or are all other areas of theschool being updated and paid for differently. so if that person wants to reach out to theirregional office with that question i'd love
to be able to talk to you about that. so i'llleave it at that. if you could reach out, if that's not a hypothetical one but it'sactually a real question. and even if it's hypothetical if you want to reach out andget more information on that, certainly talk with your regional office folks about it.all right, we're at the end of our time. hopefully we understood your questions as asked. sometimesit's very difficult how they're written, they tend to be a little cryptic in some cases,but we're doing our best. we can certainly go over them again and if we have ones remainingthat we can still ask but we need to ask you questions, we may reach out to you directly,if we have your name and we're able to do so. thank you for joining us, and we hopethis was helpful. and again, these will be
posted. don't forget we do have another webinarnext week, and it's the second in our resource management webinars. okay, thank you so much,and have a good afternoon.
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