Angels in the School Zone

Unpaid meal debt is a very complex, polarizing and hot-button issue facing school nutrition departments today as district’s across the country are racking up debts—sometimes has high as $1 million. Recent media reports of “lunch shaming” and new state laws have also forced the issue into the spotlight. One approach to alleviate some of the debt burden is the use of “angel funds”—a separate account of donated funds used to pay off individual or accumulated debts.

But in the story “Angels in the School Zone” that appeared in the November edition of School Nutrition, implementing an angel fund and paying off debts is not simple. And, it adds just one more complexity to the issue of unpaid meal debt. Two more approaches, not included in the print edition, are the alternate meal and approaches to address outstanding debt from year to year.

The Alternate Meal

Coming in a variety of forms and served when a student was unable to pay for a hot meal the alternative meal used to be a cost-saving option for school meal operations. In 2017, USDA made it a requirement for schools to develop plans on how to deal with unpaid meal charges and offering alternative meals is one solution. Students would still get fed and costs for the operation would remain low. In the public eye, however, these cost-saving options were then seen as shaming students for their inability to pay. Many states have enacted “lunch-shaming” laws and many districts have removed the alternative meal option.

In Colorado, Danielle Bock, director of nutrition services at Greeley-Evans School District 6, needed a clearer picture of the meal debt problem in her district. She also realized that previous administration was not tracking these meals close enough. Although they no longer offer an alternative meal to students, there is a button on the POS system labeled as such. It was hit by the cashier when students met or exceeded a $50 debt limit. Using that button as merely a counter, Bock determined that in SY2018-19 60,000 “alternative meals” were issued.

“That is not a financially responsible way to maintain our program because those meals are only reimbursed at the full pay rate, which is 39 cents, as opposed the $3.20 for a free student. Whereas we are claiming those meals, we are losing a lot of money on those 60,000 meals.”

As the numbers came to light, she realized her district had an actual problem, and an angel fund was created. 

An alternative meal used to be offered at Elkhorn (Wis.) Area School District before they instituted an angel fund. “We do not take trays from students,” says Ellen Leasure, foodservice supervisor. “We do not want to get kids to the cashier and take the tray away because they do not have the funds.”

Leasure’s district used to offer an alternative meal. She monitored the negative account balances and when a student’s negative balance reached $13 per family account, she made a parent contact. Adults had a 24-hour window to make a payment and if payment was not made, the alternative meal was offered. “We really did not like doing that.”

Alternate meals can be offered in St. Paul (Minn.) Public Schools, but nutrition services director Stacy Koppen, does not see the schools offering those. In addition to a district-wide angel fund, each school has their own angel fund. Alternate meals are part of the districts approach to combatting school meal debt, and the decision to offer those is left to the school principals.

“It was important for us to give our principals (in 73 buildings) the opportunity to have some autonomy and empowerment of how they wanted to handle school meal debt in their building,” explains Koppen. “I don’t know of a single school that uses alternative meals and the policy was enacted in 2017.”

A turkey sandwich is offered as an alternative meal at Splendora (Texas) Independent School District, says director of Child Nutrition Nancy Montalbo. But if a cashier is able to do it, they’ll transfer some funds from the angel account into the child’s account before serving that sandwich, ensuring the child still eats a hot meal.

And while the alternate meal is used as a cost-saving measure for the department (and is often still reimbursable) many parents and community members fear that it singles out students if they are unable to pay. While other students are getting a hot meal, why is that one student receiving a cold sandwich? (And in some extreme scenarios, why is the department taking away the tray of a student if they are unable to pay?)

Wipe Out or Roll Over?

What happens to outstanding balances once the school year has concluded? Strategies vary by district. Unpaid meal charges owed to the nonprofit school food service account (NSFSA) are considered “delinquent debt.” These unpaid meal charges can be carried over at the end of each school year and collection efforts can continue in the new school year. According to USDA, “[School Food Authorities (SFAs)] must make reasonable efforts to collect unpaid meal charges classified as delinquent debt and the cost of these efforts is an allowable use of NSFSA funds.” A collection timeframe can be made at the state or SFA level, as the federal government does not define “reasonable” in terms of either collection efforts or time frame.

However, debts can change from “delinquent” status to “bad” when local officials determine that further collection efforts are useless or too costly to continue. As they are deemed uncollectable, bad debts must be written off as operating losses. According to USDA Food and Nutrition Service (FNS), “this particular operating loss may not be absorbed by the NSFSA, but must be restored using non-federal funds.” These funds could come from a district’s general fund.

“Technically, what happens is that any bad debt from child nutrition has to be wiped out and is paid out of the general fund,” says Nancy Montalbo, Child Nutrition director, Splendora (Texas) Independent School District, whose department incurs less than $2,000 in debt each year. “We work really hard that by the time the district gets the bill, the amount is as small as possible.”

For the school meal program at Greeley-Evans School District 6, the debt rolls over from year to year. At press time, just four weeks into school year, the school nutrition department had already amassed a total of $123,000 in meal debt (including unpaid charges from SY2018-19). Because they have partnered with a non-profit organization to fundraise for student debt relief, if the district’s general fund is used to wipe out balances, the non-profit organization works to “replace the money in the general fund,” reports Danielle Bock, SNS, Nutrition Services director.

In St. Paul (Minn.) Public Schools, on the other hand, Stacy Koppen, SNS, Nutrition Services director, opts to wipe out all debt before the start of a new school year. “If we don’t have enough donations [in the district and school angel funds], then it comes out of an intra-school account—the academic budget at the school level,” she explains.

There seem to be no easy answers to this complex problem. SNA has long advocated for a universal school meals approach to address this and other issues that complete the administration of school meals. Before implementing any meal-debt strategy, work with your state agency and your board of education. And as these issues have been put into a white-hot spotlight, SNA has created talking points to help its members in responding to questions and educating parents, reporters and legislators on the challenges school nutrition professionals face when students are unable to pay for their school meals. These talking points can be found at:

These talking points can be found HERE

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