Key Definitions:
Excessive Operating Fund Balance is the unallowable amount of net cash resources remaining in the nonprofit school food service account at the end of the fiscal year less liabilities which has ended. CEs may not exceed three months of average monthly operating expenditures.
Net Cash Resources is cash on hand in the nonprofit school food service account at the end of the most recent fiscal year. Net cash resources do not include inventories (USDA Foods or other food inventories), equipment, or other non-cash resource. Net Cash Resources calculation is (Total Assets-(Inventories)-Total Liabilities).
Operating Months is any month that the CE performs operational tasks. This includes reasonable amounts of time to close down program operations at the end of the school year and time to set up program operations at the beginning of the year as well as each month for which claims were submitted, including summer months if operating the Seamless Summer Option (SSO).
Total Expenditures are reported at the end of the most recent fiscal year.
Three Month Average Expenses is the average of three months operating expenses. This is used to determine if the CE has an excess in net cash resources. In order for a CE to maintain the non-profit status, the CE cannot maintain more than three months operating expenses for their net cash resources.