rcsd audit food services

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OFFIC,EO F AU'DITORG E N E R A L

Food Service

Audit Report

November 2009

CONFIDENTIAL - NOT FOR DISTRIBUTION


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Report Section

Food ServiceIndex

Pages

Executive Summary

Summary of Recommendations 3

Observations, Recommendations and Action PlansPolicies and ProceduresLeadershipContract ComplianceBillingCharge PolicyFree and Reduced MealsP~S System ControlsM en u a nd N u tritio nFood Safety and SanitationInventory

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Food ServiceExecutive Summary

OBJECTIVETo evaluate the effectiveness and efficiency of the Food Service operation and their internal controls, policies and procedures. To ensure thestudents are receiving nutri tional, well-balanced meals and the distr ict is receiving the best possible value for contracted food services.

The Rochester City School District is responsible for preparing and serving approximately 11,000 school breakfasts and 18,000 school lunchmeals each day. Currently, the distr ict holds a contract for the privatization of the entire food service operation. The distr ict has budgeted$13 million for Food Services in the 2008-09 school year and $14 mi1lion in the 2009-10 school year.

The dist rict had contracted with Char twells since 2005 to be the district's Food Service Management Company. In July 2009, the Boardapproved Aramark to be the new Food Service Management Company (FSMC) after a competi tive bid process was completed. At the timeof our audit, Chartwells was the contracted Food Service Management Company and our audit findings and recommendations were basedon what was observed at that time. In November 2009, we followed up with Aramark, the new Food Service Management Company, toreview and perform addit ional testing to determine what changes had been made and reported these changes in the report in a subsequentreview section following the recommendation.

SCOPEWe collaborated with management and staff to obtain an understanding of the Food Service program and its processes. The contract wasreviewed and the processes were evaluated to determine what monitoring and oversight was provided to ensure contract compliance.Contractor invoices were reviewed for bil ling accuracy and reasonableness. The free and reduced meal program processes were evaluatedto ensure compliance with United States Department of Agriculture (USDA) and New York State Education Department (NYSED)regulations. We evaluated the claim reimbursement process for efficiency and accuracy to ensure the distr ict is maximizing theirreimbursement from the Federal and State government. Nutri tion and menus were analyzed for well balanced nutri tional meals. Foodsafety and sanitation practices were also evaluated. Inventory controls were assessed for adequacy.

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Food ServiceExecutive Summary

CONCLUS I ON

O u r a ud it w as i nitia lly p er fo rm ed p rio r t o th e tr an siti onof th e F oo d S er vic e v en do r fro m C ha rtw ells to A ra ma rk .of Senior over the

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Food ServiceSummary of Recommendations

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Food ServiceObservations, Recommendations and Action Plans

Management Responses:The Food Service Department has finalized the reporting structure and an organizational chart with reporting structure has been

approved by Jerome This district all to Assistant Food Service DirectorPamela

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Since the transitioning to Aramark, the district has contracted with a company called Edvocate Inc. to monitor compliance with thecontract terms and agreements. The terms of this agreement is for eight months, October 8. 2009 through May 31, 2010. Thiscontract does extend through the entire school or align with the contract with the FSMC. For the months of Edvocate'sfee is District's Board approval policy. Edvocate is not local a local company;

This contractor has visited the district for one day each month since October 2009. result ofVisitshad not been communicated to the Senior Director of Operations or the Executive Director of Food Se~

Edvocate's work has been ed t o t he although the contract stipulates written reporting. ___

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R es po nsib ility : Je ro me U n derw oo d, S en io r D ire cto r o f O pe ra tio ns ; L eslie F ow ler , E xec utiv e D ir ec to r o f F oo d S er vice s

D ue D ate: C om plete an d o ng oin g

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by the district.Documentation did not exist to evby the FSMC and then utilized by the district.

w i.th the transition to Ararnark, there is no a fa carte program in place except for the sale of beverages. All food items~ereestablished in the Aramark which was signed by the Board of Education President on August 27, 2009. ___

Responsibili tv: Jerome Underwood, Senior Director of Operations; Leslie Fowler, Executive Director of Food Services

Due Date: August 31, 2010 and ongoing

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The contract was awarded based on aIt was not a fixed pr ice contract. The 'per

of

It was also noted during testing that the meal counts reported on the monthly invoices do not agree with the meal counts that thedistrict is claiming for reimbursement, nor do they agree to the system of record. A reconciliat ion identifying the differences did notexist.

Since transit ioning to Aramark, invoices are prepared by the FSMC using company-wide software which is l inked to the district 'sNutriKids system. Invoices are then reviewed by the RCSD Supervising Accountant and the Quality Control Operations Managerfrom the FSMC. Requests for changes are made by the Supervising Accountant , as deemed necessary and an updated invoice is

it is to for nAlltnt4P,nt

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Responsibility: J ero me U n de rw oo d, S en io r D ir ec to r o f O pe ra tio ns; L es lie F ow le r, E xe cu tiv e D ire cto r o f F oo d S erv ic es

D ue D at e: May 31, 2010

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Since transitioning to Aramark, Superintendent 's Regulation 8530R was approved by the Superintendent on August 10, 2009. Theregulation includes guidelines for both high schools and middle and elementary schools regarding charge limits. The regulation doesnot define collection procedures, nor does it have formalized collection procedures for the district . A charge policy has not beenadopted by the Board.

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With the transit ion to Ararnark, notif ication is sent to the students households regardless of their status for free and reduced lunch-thussatisfying USDA regulations regarding notification. Application processes have not changed, but it should be noted that fewerapplications were processed in 2009-10 school year due to an increased number of direct certifications. In 2008-09, there were 13,000direct certifications and approximately 6,100 applications not submitted. In 2009-10, there were 18,000 direct cer tifications andapproximately 3,600 applications not submitted.

Management Responses: We are in compliance wi th USDA Regulations. Only 3,000 applications were outstanding as of 3/1/1 O .

Responsibil ity: Jerome Underwood, Senior Director of Operations; Leslie Fowler, Executive Director of Food Services

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Responsibil ity: Jerome Underwood, Senior Director of Operations; Leslie Fowler, Executive Director of Food Services

Management Responses: A second letter was sent this year and the 10 day grace per iod was monitored closely for compliance bythe Food Service Director and the Accounting Supervisor. The 80% response rate is a target but not mandatory. If a family does notrespond to the verif ication request they lose their current free or reduced status. They may regain their status by providing therequested data at anytime after ver ification. The NYSED has a specified process for Distr icts that do not meet the 80% target rate andthat process is followed. If the 80% target is met other processes are allowed to be used but are no more or less stringent or difficultthan the current process.

Due Date: Completed

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Free and Reduced MealsS ys te m o f R ec or d

The district does not have ownership of the system of record for meal counts. Currently, Chartwells Accounting Program for Schools(CAPS) is the system of record which is the FSMC's system and the distr ict does not have ownership of this system. The districtuti lizes a point of service (POS) system called NutriKids. The NutriKids POS System tracks free, reduced and paid meals studentsreceive, but not every school uses the NutriKids POS system due to restrict ions, nor is Food Service able to manually enter theseschools into NutriKids. Therefore, these schools are entered into CAPS. NutriKids information is into CAPS.The NutriKids and CAPS

With the transition to Aramark, NutriKids is now the district 's system of record for meal counts. Rosters sti ll are maintained for fivelocations which are not connected to the NutriKids system due to either capacity of the location or the cost-benefit based on thepopulation of students.

Responsibili ty: Jerome Underwood, Senior Director of Operations; Leslie Fowler, Executive Director of Food Services

Due Date: Completed

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Free and Reduced MealsClaims Reimbursement

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Due Date: On-going

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Management Responses: Unique passwords and login detail were given to each cashier and substitute during Winter recess.

Responsibility: Jerome Underwood, Senior Director of Operations; Leslie Fowler, Executive Director of Food Services

Due Date: Completed

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Nutrition and MenuNutrition Analysis

T he d istric t u se s th e F oo d B as ed M en u a pp ro ac h fo r p re pa rin g

A lso , th e U SD A re qu ire s a n a dvisory bo ard m ade u p o f p are nts, stu den ts a nd tea ch ers to assist in m en u pla nnin g for scho ol fo oda uth oritie s co ntra ctin g w ith fo od se rv ic e m an ag em en t c om pa nie s. T his re qu ire me nt is in clu de d in th e co ntra ct. T he d istr ict d oe s n oth av e a n ad viso ry b oard to su ppo rt th e F oo d S erv ice D ep artm en t w ith m en u p la nn in g.

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M an ag em en t R esp on se s: C u rr en tly, n utrie nt a na ly sis is c om ple te d o n a m on th ly b as is u tiliz in g th e w ee kly c yc le a ve ra gin g todetermine if all re qu ire me nts a re m et. T he a na ly sis is c om ple ted d urin g m en u d ev elo pm en t p rio r to th e s erv ic e o f th e m en u.If menuad ju stm en ts are m ad e the su bstitu tio n item has to b e o f sim ilar o r eq ual v alu e to the o rig in al item (ex . - a g rain fo r a g rain , m eat o rm ea t alte rn ativ e fo r th e s am e, e tc .). T he a na ly sisis repeated at the en d o f the m on th reflectin g an y m en u chan ges that m ay h av e

. This is compnant

R esp on sib ility : J ero me U n de rw oo d, S en io r D ire cto r o f O pe ra tio ns; L es lie F ow le r, E xe cu tiv e D ir ec to r o f F oo d S erv ic es

Due Date:. Ju ly 3 1, 20 10

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Management Responses: The district is currently providing special meals for students with the following medically identifieddisabilities:

1. Lactose intolerance2. Gluten Free diets3. Vegetarian Diets4. Pureed/ Soft Food Diets5. Diabetic Control Diets

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Accommodations are made as students are identified.

Aramark dieticians review our menus and special needs on a monthly basis. This is a deliverable in our contract with them. Inaddition, and as a counter balance for reviews theDistrict's menus for nutritional {''',>f ... ,to.......


Due Date: Completed

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Responsibility: Jerome Underwood, Senior Director of Operations; Leslie Fowler, Executive Director of Food Service

Due Date: Survey ~July 31, 2010; Web Enabled Complaint Process - December 31,2010

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Food Safety and Sanitation

A ll inspections are now being posted.e met with the Health Department and it was determined

""U,IIU,I'U (July - June) and they inspect on the calendar year (Jan - Dec).


Due Date: Completed

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Responsibility: Jerome Underwood, Senior Director of Operations; Leslie Fowler, Executive Director of Food Services

Due Date: June 30, 2010

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Management Responses: Monthly training meetings are taking place with the High/Middle School Managers. Agenda items includereview of menus, food handling and temperature reviews, Redbook review, and support staff training at sites. Monthly Cashiertraining meetings are taking place to help review systems, Primero training, menu review, food handling, temperatures, and Redbook

. Winter break we with to refresh Level certifications for


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ined title raw government comm odities, but the FSM C has title to theprocessing fees governm ent com modities. Processing fees are paid by the F SM C and reported as a part of direct food costs on theo pe ra tin g s ta te me nt. P er th e co ntra ct. "title o f p ro du cts p urc ha se d o r p ro ce ss ed u sin g fe de ra lly d on ate d c om m od itie s m ust re ma inw ith th e S FA, A ny cha rg es in curred b y th e F SM C w he n p ro ce ssin g o r pu rcha sin g p rod ucts co nta in ing g ov ernm ent co mm od ities sh allb e p aid b y th e F SM C a nd ch arge d b ack to th e d istrict a s a fo od co st." T he district's inv ento ry is u nd ersta ted b y th e va lu e o f th eg ov er nm e nt c om m od it ie s t ha t h av e b ee n d iv er te d f or p ro ce ss in g,

II th o d ' f tr ke d t I' thrk d't' h d dW'thA t. ~ ..

M an ag em ent R esp on se s: A s o f Jan uary 2 01 0 S FS is incu rring th e co st fo r the co mm od ities a nd th e re su lting pro cessing fee s on am on th ly b asis . T he cu rre nt in ve nto ry s yste m tr ac ks a nd v alu es th e co mm od itie s fo r a cco un tin g p urp ose s.

R esp on sib ility : Je ro me U n de rw oo d, S en io r D ire cto r o f O p era tio ns; L eslie F ow le r, E xe cu tiv e D ire cto r o f F oo d S erv ice s

D ue D ate: C om ple ted

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With th e o nse t o f A ra ma rk , th ey in tr od uc ed a n ew p erp etu al in ve nto ry s ys tem c alle d P rim ero . B ec au se th e in ve nto ry is b ein g u tiliz eda s in te nd ed , u sa ge , w as te a nd sp oila ge a re a ll b ein g tra ck ed . P hy sic al in ve nto ry is b ein g ta ke n o n a w eek ly b as is . E m plo ye e u sa ge o fin ve nto ry c on tin ue s to n ot b e tr ac ke d.

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Responsibility: Jerome Underwood. Senior Director of Operations; Leslie Fowler. Executive Director of Food Services

Management Responses: Employee usage is now being tracked on the daily food production worksheets completed by theproduction manager.

Due Date: Completed

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Food Sen-iceObservations, Recommendations and Action Plans

Due Date: Completed

Management Responses: This has been completed.

Responsibilitv: Jerome Underwood, Senior Director of Operations; Leslie Fowler, Executive Director of Food Services

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