The Cost of Wellness in Schools

For the last seven years, I have watched nutritionists, politicians, and local state agencies walk a politically correct line, in which they push and promote over zealous nutrition programs, with reduced snack sales for schools.  After all, to these folks, not supporting or pushing forward a nutrition, or health issue for children would be political suicide.  So, they push the politically correct agenda in the name of wellness.  State Agency CN Offices have done the same - Everyone protective of their job, but none speaking of the financial pitfalls.   And so, many directors/managers, and school boards "climbed aboard" the wellness wagon, with very stringent wellness plans, blaming the school cafeteria for obese and overweight children.  God forbid that they would hold the (voting) parent responsible.

I have watched as many of these  programs, began to lose much needed revenue, all while the cost of food labor, and labor benefits was and continues to increase at an alarming rate.  As a result, these programs begin a downward financial spiral, using up cash reserve balances that accumulated years ago.   At the same time, I have seen this economy generate an increase in the number of students eligible for free and reduced price meals.  Add to this the number of schools and directors/managers who have no idea what it is costing them to prepare and serve a school lunch or breakfast.  For many of these programs, the cost of preparing and serving that lunch now exceeds the revenue that is generates from free and reduced price rates of reimbursement.  The end result is a road map to failure.  To make matters even worse, many of these same schools have virtually eliminated snack, Ala Carte, and vending revenues that previously helped close the disparity between operational costs and revenue.

Eventually they call me asking for help to keep the Food Service Management Company (FSMC) out.  Only a few months ago, I received a phone call from a director in the mid-West who said her Board was voting to turn the program over to a Management Company, asking me what she should do.  My reply, "you should have called me a year ago".  Her response, "I had no idea the program was in financial trouble".  As incredible as that may be, I receive those calls and emails all the time.  "I didn't know we were losing money; no one in the business office told me".

There is no magic here.  Like government, we cannot afford to spend more than we "take in".  Success today, means that we can no longer simply plan nutritious menus.  We must know the cost per serving of every item, utilize a food budget, take an accurate monthly inventory, ensure that every delivery is carefully checked in, and run a fully accrued P&L every month.  That P&L must, must, must be compared to a monthly operational budget and every item (revenue or expense).  Then every item that is off budget for the month, must become the subject of a plan of corrective action.  Today, we cannot afford to rely on the business office for an accurate P&L - you have to prepare your own every month.  I have seen to many that are not correct, misrepresent (unintentionally) the bottom line, or are simply non existent.

My concern is that there are few out there who do what I do, who know how the FSMC operates, and who are not afraid to tell it like it is.  Like it or not, the cost of wellness, and labor contracts is turning more and more programs over to a FSMC.  And that should not be happening.

We need to know where we stand every month financially - fully accrued, no nonsense, no value of commodities included, with an accurate cost of food used (not purchased) presented in a P&L.  Then we need to evaluate whether we have a revenue problem, or a spending problem.  We then need to put together a realistic action plan, with goals and time lines, submit it to the Board for approval, and "get it done".  If this means cutting labor, reduce it, if it means food costs must be lowered to account for no more than 35% of revenue, do it.  If you need to fight to negotiate your food service contract separate from the other non-instructional employees do it.  And, if you need help get someone who knows, in there.  Don't  be afraid of what a consultant (like me) might say.  We are there to help and to save you staff and program from the FSMC.

Good luck and never hesitate to contact me for help.  Although this is my last school year as a consultant, I will continue to take on selected programs, if I know that it really needs my help.