Poor planning cost the Education Department hundreds of thousands of dollars in federal lunch reimbursements, which was a major factor in why the school system needs $3.2 million more or it will run out of money for school lunches in March, Education officials acknowledged at a Senate hearing Monday.
Inflation in food prices, storage issues and federal regulations also played a role, school officials testified to the Committee on Education Education and Workforce Development on the department’s emergency funding request.
In some ways the situation has improved. When Education officials raised the alarm in January, they said the system needed $4.6 million and would run out of funding in February. Now, thanks to scrambling to plan menus better and some reanalysis of the situation, they only need $3.2 million and are funded to the end of March.
“How did we get here with a shortfall of approximately $3.2 million?” Sen. Jean Forde, the committee chair, asked.
“There are four factors driving higher costs; the inherited management practices, the highly regulated structure of the School Lunch Program, our geographical location, and insufficient supplemental funding," St. Thomas-St. John School District Superintendent Dion Wells-Hendrington said.
She and other officials also acknowledged that management mistakes contributed to the problems, as they did during the January hearing.
"Historically, and I am not being disparaging by saying this, we have had cooks, we have not had managers," running the school food service, Education Commissioner Sharon McCollum said. They focused on getting the food and preparing the lunches on a more immediate basis, while careful menu planning, far in advance, is needed to make sure that menus always meet federal guidelines, she and the other officials said.
Each meal is required to have an array of vegetable, grain, dairy and other components, and the federal government has cut down on allowed substitutions, making planning more difficult and more important.
"When an item is missing, the feds consider it unreimbursable," St. Croix Superintendent Colleen Williams said. At one point, St. Thomas ran out of milk, making all meals served during that period unreimbursable – meaning the school system lost out on the large per-meal subsidy from the federal government and had to absorb the full cost of the meal.
“What changes will be done to ensure this situation doesn’t occur next fiscal year?” Sen. Marvin Blyden asked.
McCollum said a long-term, cyclical menu that rotates items in and out will help the department plan its ordering well in advance, to reduce the risk of unreimbursed meals.
“I have made it a mandate that an annual comprehensive menu must be completed by March 30. This will help the department to project commodity costs and quantities while meeting the requirements of the SFA USDA Program," McCollum said.
Some of the benefits of the comprehensive menu are reduced labor involved in planning menus, reduced plate waste through tried and tested meals, decreased food cost allowing more food to be ordered in bulk and minimized purchasing time due to repeated use of meals, Wells-Hendrington said.
“The School Districts has seen an increase in the cost of foods and supplies while experiencing a decline in funding from FY 2014-2016,” Wells-Hendrington said. “While the projected federal budget has increased for 2016, the cost of food and supplies has also increased. Additionally, the local budgets have decreased for FY 2016 while commodities have increased.”
The school lunch program has also been operating at a deficit for a couple of years, and the problem came to a head this year, according to Correy Lettsome, federal commodities officer for the department. In the past the department had carried over costs from prior years for reimbursement, he said.
"We were always amassing debt, but now they have stopped that practice," Lettsome said.
As a result, the department has to have the money to buy food now, ahead of time, or they will run out, he said.
Sen. Kurt Vialet observed that based on student reduction in the District of St. Croix, the department cannot justify the need for $3.2 million for the next four months.
"There are fewer students who are eating now," he said.
McCollum said the funding was for the rest of the fiscal year, including summer and part of next fall.
Department officials also requested another $3.4 million to fund substitute teachers for the year. The funding was not in the budget this year and the school system used funding for vacant positions to pay substitutes, Deputy Education Commissioner Debra Gottlieb said. As a result, there is no funding to fill the vacant positions and they are running out of money to pay substitutes, she said.
Forde said many agencies were suffering budget crises and funds were limited, so Education should not expect full funding of their request for pay for substitute teachers. Several senators said paying for the school lunches was likely however.
"It is unfortunate but it is what it is," Sen. Myron Jackson said.
"At the end of the day, we have to feed the children, so this is almost an exercise in futility. But we have to determine what has happened," Sen. Justin Harrigan said.
The meeting was attended by Forde, Harrigan, Jackson, Vialet, Blyden, Sens. Tregenza Roach, Novelle Francis, Terrence "Positive" Nelson and Kenneth Gittens.