The School Food Service Problems Need to be Fixed ... Now | Eastern North Carolina Now

Service (SFS) operation is going broke.

    The Beaufort County Board of Education and the new superintendent, who will hopefully be on board shortly after the New Year, are facing a serious crisis. It's School Food Service (SFS) operation is going broke.

    The recently released audit, presented to the board four months after the fiscal year ended, shows that the SFS operated at a loss of $205,384 last year. That loss came on the heels of a $317,979 loss in 2008 and another loss of $123,385 in 2007.

    Now the purists will argue that the "real" loss in 2008 was "only" $123,075 because of accounting gimmicks. But if one wants to play that game you'd have to factor in the $316,141 in "indirect costs" that should have been paid in 2009 that were not. (Indirect costs is the amount that is supposed to be transferred from the SFS Fund to the general Current Expense Fund to cover costs of such things as utilities, maintenance, administrative and other overhead that cannot be itemized very easily.)

    Forget the precise numbers. The two facts that should be focused upon are these: 1. The operation is losing money and it is losing money about as badly as it has for the last four years, and 2. It is draining funds from the instructional program (because of failure to cover its indirect costs). And this is in spite of the fact that meal prices were raised last year.

    A word about those increases in meal costs. If you search our archives you will find several stories which essentially come down to this: They set the meal prices without knowing what the outcome would be. And that very fact illustrates what the problem is in SFS. They are flying in the dark by the seat of their pants. They have no more idea what is causing the red ink than the Man In The Moon does.

    Sure, costs of food has gone up. Sure revenue from "non-operating" sources (Federal aid) has not gone up as much as would be hoped. Sure wages have gone up, but ask anyone who works in the cafeterias and they will tell you that is certainly not the problem. But the real problem is that the SFS management and the Finance Officer, and thus the Superintendent and School Board, do not know what their true costs are. More importantly, they do not know where the holes are that are draining off what should be their "profit." That is the problem. And that is where the solution lies.

    Unfortunately, the auditors don't know either. All the auditor could tell the board was that they will run out of money next year if they don't fix the problem.

    They may have to raise meal prices again. That should be done before they continue to use money that could be used in the classrooms to subsidize the food service operation but the problem with the approach of raising meal prices is that they are already too high in terms of the true Supply/Demand curve they are faced with. If they raise prices very much, or even at all, and maybe unless they lower prices, then "participation" will decline because fewer students will pay to eat in the cafeteria. The fewer paying customers the more demand the "free and reduced price" customers put on the bottom line.

    The temptation will be to increase "supplemental sales." That is what many parents call "junk food." But it carries the highest profit margin. That is not the solution either.

    So what should they do?

    The answer is not simple. It will involve some tough decisions and there are no guarantees that any particular action will "solve the problem." There probably is no "silver bullet." But there are some obvious things that need to be done.

    First, the school board needs good information. Solid data that will help them get a handle on the real problems....not the off the cuff, wild-eyed guesses; but solid data.

    They need good financial reports. Those reports should show the patterns and trends over several years. If they can construct such data back to when the operation was operating in the black they can see when, and where it turned red. That will tell them a great deal.

    They should know which cafeterias are operating more efficiently than others. They need to know what the administrative overhead is compared to what it is in other school systems. The current reporting is inadequate and that is the first thing that must be corrected. Management cannot make sound decisions without solid data. Oversight cannot be properly exercised without solid data.

    If and when the data are obtained the next problem is going to be how to decide how to use it. That will take some real planning.

    What is obvious is that the school board does not currently have the staff to do the job that needs to be done. So they need to get qualified help. That help will come either one of two ways: Either they will need to replace existing staff or they need to get outside help.

    It is possible that a new superintendent will be capable of providing the insight that is needed. But that is not an efficient use of his/her time or talent. The superintendent should be focused on student learning. Getting outside help is more efficient. And that probably will be more effective than putting this problem on the superintendent.

    They need to hire a highly qualified consultant to come in and gather the data and give the board and superintendent a hardnosed analysis that includes a range of options for correctly the existing problems and to establish monitoring systems to keep the situation from getting this bad again in the future.

    This approach, if the right person/firm is selected, will save money. Already this year they most likely have lost more money than it would cost to correct the situation.

    This problem should have been fixed three years ago. It has cost the taxpayers of Beaufort County a half million dollars that it was not fixed when they knew they had a problem. But now they have run out of the kitty they had to rely on. The problem now is draining over $300,000 out of the classrooms each year. It needs to be corrected and it needs to be corrected immediately.

    Delma Blinson writes the "Teacher's Desk" column for our friend in the local publishing business: The Beaufort Observer. His concentration is in the area of his expertise - the education of our youth. He is a former teacher, principal, superintendent and university professor.