SNP Revenue from Non-Program Foods

The Healthy Hunger Free Kids Act (HHFKA) of 2010 establishes requirements for school district revenue when foods sold outside of reimbursable meals are purchased with school foodservice account funds. The purpose of the non-program revenue requirement is to ensure revenues from the sales of non-program foods cover the food costs in the School Food Authority’s (SFA) foodservice account and to ensure that revenues from the sales of non-program foods generate at least the same proportion of revenue as they contribute to the SFA’s food costs.

Non-program foods are defined as foods sold in schools participating in the non-profit National School Lunch Program (NSLP) and School Breakfast Program (SBP) other than a reimbursable meal and purchased using funds from the non-profit school foodservice account. Examples of non-program foods include, but are not limited to:

  • A la carte items
  • Additional reimbursable foods and beverages such as an extra slice of pizza or carton of milk
  • Adult meals
  • Items purchased for fundraisers and vending machines
  • Items purchased for catering

Non-Program Revenue Calculator

The Non-Program Revenue Calculator was developed by United States Department of Agriculture (USDA) to help SFAs ensure that the revenue from the sale of non-program foods cover the cost of the food and is not subsidized though federal reimbursement. SFAs must complete the non-program revenue calculations annually.

To use the tool, the SFA must collect the cost of both program and non-program foods and the total revenue from the previous school year. Based on these amounts, the tool will calculate the minimum amount of revenue from non-program foods that is required to meet this requirement. The tool will also calculate the additional revenue, if any, needed to comply.

All SFAs must complete these calculations each year prior to the start of the school year. If the proportion of revenue is equal to or greater than the proportion of the food costs, no additional action is needed. If it is not, then the SFA must review the prices charged for non-program foods and make necessary adjustments.

Data Needed for the Non-Program Revenue Calculator

  • Cost of Reimbursable Meal Food is the amount paid for food purchased as a part of a reimbursable meal.
  • Cost of Non-Program Food is the amount paid for food sold in a participating school other than a reimbursable meal and is purchased using funds from the school foodservice account. This is a broad definition and includes beverages, a la carte foods, and any extra reimbursable foods that are sold, such as an extra slice of pizza or carton of milk.
  • Total Food Cost includes the cost of food for reimbursable meals and non-program foods purchased with the school foodservice account. It is only the cost of the food. If an item is prepared from a recipe, only the price of the ingredients is used to calculate food costs. Labor is not included.
  • Total Non-Program Food Revenue refers to all funds accumulated to the school foodservice account associated with the sale of non-program foods.
  • Total Revenue refers to all funds that accrue to the non-profit school foodservice account. This includes, but is not limited to:
    • Federal reimbursement for school meals
    • State or local funds, such as per meal subsidies and state revenue matching funds
    • Student payments for reimbursable meals and a la carte sales
    • Payments for items purchased for fundraisers and vending machines
    • Income from catering and adult meals

Resources

Example: Non-Program Revenue Calculator

The first tab in the USDA Non-Program Revenue Calculator (Excel spreadsheet) is the instructions. The second tab is the Non-Program Food Revenue Tool where you will input your information. Populate the shaded cells for each cost or revenue requirement. Save the completed tool to your computer for future reference. Consider the following data for entry into the Non-Program Revenue Calculator:

Total Program Costs:    $ 1,000,000
Total Food Costs:           $    500,000
Non-Program Food      $      50,000
Program Food                $    450,000
Total Revenue:               $ 1,000,000

Non-Program Revenue Calculator

Enter the cost for reimbursable meal, cost of non-program food, and total revenue:

Cost for Reimbursable Meal Food

$450,000

Cost of Non-Program Food

$  50,000

Total Food Costs

$500,000

Total Non-Program Food Revenue

 

Total Revenue

$1,000,000

Minimum portion of revenue from non-program funds:

10%

Minimum revenue required from the sale of  non-program foods:

$100,000

Additional revenue needed to comply:

$100,000

Since the non-program foods costs are ten percent of the total food costs ($50,000 of $500,000), the revenue from the non-program foods must equal ten percent or more of the total program revenue (ten percent of $1,000,000 is $100,000). In the example above, the SFA will need at least $100,000 in revenue from the sale of non-program foods. To the extent that these revenues fall short of the revenue target, the SFA must either increase a la carte prices or receive additional funds from sources outside of the foodservice account.

The SFA must keep all records related to the program and non-program food costs and revenue to document compliance in this area.