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Effective Food Purchasing Management for Child Care Centers

Learn essential food purchasing management strategies for child care centers. This lesson covers key issues including inventory management methods, board policies, and the development of a solid purchase plan and internal control strategies. Gain insights into budgeting and effectively utilizing financial resources to meet meal pattern requirements. Understand the importance of maintaining a well-controlled inventory and how to create a year-long budget based on meal projections. Equip yourself with the tools to enhance the food purchasing process in your center.

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Effective Food Purchasing Management for Child Care Centers

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  1. Food Purchasing for Child Care Centers Section 12: Management Issues

  2. Lesson Objectives The learner will be able to • list management issues related to food purchasing, • explain the two types of methods acceptable for handling inventory and decide which one is best for the center,

  3. Lesson Objectives The learner will be able to • identify policies that the board of directors/owners of the center should make, • write a purchase plan for the center,

  4. Lesson Objectives The learner will be able to • develop an internal control plan, and • explain how to develop a budget and use it as a working tool.

  5. Management Issues • Inventory • Board/owner policies • Purchase plan • Internal controls • Budgeting

  6. Inventory Two acceptable methods • Food usage • Purchases equal to food usage

  7. Food Usage • Monthly • Formula:

  8. Food Usage • Best for high-dollar-value inventory (more than 7 calendar days)

  9. Purchases Equal to Food Usage • Annually • Philosophy: If inventory is well-controlled, purchases = food used

  10. General Inventory Rule Once a container (box, bag, case) is opened, it is not counted as part of the inventory.

  11. Board/Owner Policies • Represent good business practice • Reviewed annually

  12. Board/Owner Policies • Employees authorized to make purchases • Standard of conduct • Purchasing documents needing approval • Type of inventory

  13. Board/Owner Policies • Employees who will • sign invoices • write checks • prepare the Federal claim for reimbursement • keep accounting records

  14. Purchase Plan • Results of • Market analysis • Market baskets • IFBs/RFPs • Presented to board/owners for approval

  15. Internal Control Multiple staff members responsible for performing duties related to a certain task

  16. Internal Control . . . . . . safeguards the financial resources of a center.

  17. Internal Control Plan

  18. Internal Control Plan

  19. Budgeting Center director must present a budget to the board of directors/owners.

  20. Purchasing Process . . . . . . includes planning and managing a foodbudget that allows the center to • meet CACFP meal pattern requirements and • serve a quality food product to children.

  21. Budget • Normally for 1 year • A financial guide for that year

  22. Planning the Budget Projected number of meals served in the year You will need • calendar for the year • schedule of days the center operates • meal count records for previous year

  23. Planning the Budget Why not use actual meal counts for the past year? • Number of days in a month you serve varies • Enrollment could increase/decrease

  24. Operating Years • Calendar year: January to December • Federal fiscal year: October to September • State fiscal year: • Varies by State • Often July to June • Center fiscal year: varies by center • School year: varies by State

  25. Activity 15: Answers X X X X X X X X X X

  26. Activity 15: Answers X X X X X X X X X X X

  27. Activity 15: Answers • November • 18 X 39 = 702 • 18 x 49 = 882 • 18 x 52 = 936 • May • 20 x 39 = 780 • 20 x 47 = 940 • 20 x 51 = 1,020

  28. Activity 15: Answers

  29. Planning the Budget How much money will be spent for each meal? • Sophisticated accounting records • Past year’s costs • Total expenditures for preparing the budget • Monthly expenditures for managing the budget

  30. Planning the Budget How much money will be spent for each meal? New centers: Federal reimbursement rate for free meals X % for food costs

  31. New Center Budget Contact State Agency to get percentage to use in estimating food budget

  32. New Center Budget Federal Reimbursement Rate X Percentage (from State Agency) Example: $2.32 (2005/06 Federal rate for lunch) X 65% (% from State Agency) = $1.51 (budgeted for each lunch)

  33. Activity 16: Answers Snack rate (2005/06 Federal rate) $0.63 @ 50% = $0.32 $0.63 @ 60% = $0.38 $0.63 @ 65% = $0.41

  34. Budget Amount Budget amount for 1 month = number of meals X amount per meal spent on food

  35. Budget Amount Budget amount for October lunch = 1,150 X $1.51 = $1,736.50

  36. Food Budget

  37. Managing the Budget The budget must provide current information.

  38. Budget as Working Tool • Maintain a budget report for each month • Record amount budgeted for the month at the top • Subtract each invoice or grocery receipt

  39. Budget as Working Tool

  40. Budget Report • Only whole dollar amounts • Speed important

  41. Important! The working budget report should not stop a center from making the purchases necessary to provide the meals as planned.

  42. Budgeted Amount If higher than planned, ask: • Has the enrollment increased? • Has there been an unusual event such as a freezer failing and food spoiling? • Have there been price increases?

  43. Budgeted Amount If lower than planned, ask: • Are the menus meeting meal patterns? • Are the portion sizes adequate? • Has enrollment decreased? • Have there been price decreases?

  44. Remember! A budget is a plan.

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