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ROUND ROCK INDEPENDENT SCHOOL DISTRICT
FOOD SERVICE OPERATIONS
AUDIT PROGRAM
W/P AUDITOR
AUDIT PROGRAM REF INITIALS
GENERAL
Studies suggest that students who are malnourished do not have the same capacity for learning
as students who have well-balanced, nutritional meals on a regular basis. Therefore, providing
quality, well-balanced, nutritional meals for students of the District is an important aspect in
preparing students to meet student achievement benchmarks and creating an environment of
caring & nurturing.
Food service operates as a freestanding operation with a goal to be financially self-sufficient.
Currently, the District has outsourced the management of food services to ARAMARK.
ARAMARK employs 18 individuals at the Central Kitchen (Brushy Creek) with the remaining
food service staff being District employees. This arrangement presents unique challenges in
terms of controlling operating expenses related to salary costs, employee discipline actions, and
the general management/oversight of employees.
AUDIT OBJECTIVES
1. Comprehensive written policies and procedures governing all Department activities have
been established;
2. Cash on hand and deposits awaiting collection are adequately secured and properly
maintained;
3. Transactions are processed in accordance with documented policies and procedures,
performance guidelines, and best practices;
4. Any contracts related to food services are effectively monitored and payments are made in
accordance with contractual provisions;
5. Meal programs are administered in accordance with directives from the Texas Education
Agency;
6. Initiatives have been implemented to provide services in the most cost-effective and
efficient manner;
7. The Department operates within budgetary constraints; and,
8. The Department explores continual improvement opportunities and strives for Baldrige-
based quality services.
1 10/24/03
ROUND ROCK INDEPENDENT SCHOOL DISTRICT
FOOD SERVICE OPERATIONS
AUDIT PROGRAM
W/P AUDITOR
AUDIT PROGRAM REF INITIALS
AUDIT PROCEDURES
1) General
a) Obtain:
i) Prior Audit Reports
ii) Reports from external auditors, the Texas Education Agency, Health Department,
and other oversight agencies
iii) Related information on laws and regulations
b) Review prior reports and responses to determine whether corrective action has been
implemented for noted deficiencies.
c) Review related laws and regulations to become familiar with requirements before
beginning testwork.
2) Policies and Procedures
a) Obtain copies of policy and procedure manuals prepared to assist employees in
complying with TEA, Health Department, and other standards. Determine whether
policies and procedures are adequate to effectively manage the food service operation.
b) Determine whether training sessions are held to communicate changes in policies and
procedures, as well as to answer questions and discuss potential opportunities for
improvement of the process.
3) Staffing
a) Obtain and review job descriptions of classes of food service employees. Comment
on accuracy of job descriptions and functionality of positions. Determine whether
staffing levels are sufficient.
b) Determine if a program of continuous professional education has been established.
Ensure that programs attended are sufficient to maintain an adequate level of
professional competency and an appropriate awareness of advances in food service
methods and activities.
c) Determine whether any staff members are involved in professional food service
organizations or other affiliations.
2 10/24/03
ROUND ROCK INDEPENDENT SCHOOL DISTRICT
FOOD SERVICE OPERATIONS
AUDIT PROGRAM
W/P AUDITOR
AUDIT PROGRAM REF INITIALS
4) Cash Controls and Cash Management
a) Evaluate procedures for accepting, recording, and preparing cash/check payments.
Determine the location and nature of all cash funds collected. Ensure that procedures
for securing cash are adequate.
b) Determine the methods for daily balancing, and reporting cash collections. Ensure
that procedures are handled consistency from campus to campus. Examine the
timeliness of deposits by selecting a sample of collections and tracing to the bank
statement.
c) On a surprise basis, count all cash funds and tie to the cash receipt records on hand.
Obtain explanations for any differences.
d) Determine whether food service management performs random surprise audits.
Examine documentation supporting such procedures.
e) Evaluate the reconciliation process at Central Kitchen to ensure accuracy and review
the process for posting related revenue to the general ledger. Consider reviewing
documentation and developing testing methods as deemed appropriate.
f) Inquire as to the procedure for handling NSF checks and comment on the adequacy of
procedures.
g) Review controls surrounding the on-line payment system including posting,
reconciling, and system maintenance.
h) Determine if any thefts or mysterious disappearances of cash have been experienced
since the prior audit. If so, obtain copies of any reports filed. Document the
circumstances surrounding the loss(es) and any weaknesses in control that contributed
to the incident. Determine what action has been taken to prevent future occurrences.
i) Determine the Department’s cash management techniques including cash planning and
forecasting.
3 10/24/03
ROUND ROCK INDEPENDENT SCHOOL DISTRICT
FOOD SERVICE OPERATIONS
AUDIT PROGRAM
W/P AUDITOR
AUDIT PROGRAM REF INITIALS
5) Operational Issues
a) Determine the process for establishing menus and evaluate the components/personnel
in place within the Department to ensure that menu items contain foods of sufficient
nutritional value.
b) Determine whether monthly and annual planning sessions are held. Some items that
may be topics for these sessions include:
i) Develop and analyze food service goals
ii) Review of revenues and expenditures from prior year
iii) Development of current year budget
iv) Establishment of meal prices for the upcoming year
v) Review of cost control measures and potential savings opportunities
vi) Review of staff assignments and adequacy of staffing
vii) Evaluation of equipment needs
viii) Review of purchasing practices
ix) Planning and developing training sessions
x) Review of health department inspection reports
xi) Assessment of efficiency of delivery routes
4 10/24/03
ROUND ROCK INDEPENDENT SCHOOL DISTRICT
FOOD SERVICE OPERATIONS
AUDIT PROGRAM
W/P AUDITOR
AUDIT PROGRAM REF INITIALS
6) Purchasing & Inventory
a) Obtain an understanding of the accounts payable process performed by ARAMARK
and the District. Determine how this function fits within purchasing and billing
cycles.
b) Compare the food service purchasing process with that of the District’s purchasing
function. Determine how food service complies with existing policy requirements
and state purchasing laws.
c) Obtain and review any contracts and/or inter-local agreements for commodity
purchases.
d) Determine whether the District participates in the USDA surplus commodity
program. Ensure that the District meets federal guidelines for:
i) Ordering, receiving, and sorting commodity products
ii) Inventory controls consistent with other food service inventories
iii) Efficient and cost-effective use of the items received
e) Determine whether other opportunities exist to enter into cooperative purchasing
agreements with surrounding school districts. If such agreements are currently in
place, evaluate the efficiency of the arrangement and determine how savings are
calculated and analyzed.
f) Select a random sample of purchases and test for adherence to purchasing laws and
policy restrictions.
g) Conduct site visits of warehouse and evaluate the adequacy of storage space.
h) Determine whether budget to actual variance analysis is prepared and analyzed by
food service management. Review these comparisons and determine the
reasonableness of major fluctuations.
i) Ascertain the Department’s procedures for maintaining and securing food inventory
and other products. Verify that the following areas are addressed to ensure
inventories are:
i) Maintained for pantry stock, warehouse stock, and freezer items
ii) Adequately tracked (i.e. tracking system)
iii) Secured for control purposes to avoid pilferage
iv) Centrally received for control and accounting purposes or properly reported if
delivered to individual campus sites
v) Monitored through production sheets detailing food prepared and food served
vi) Physically counted on a periodic basis
vii) Monitored for food waste, leftovers, and expired food products
viii) Stored in physical facilities adequate to meet inventory demands
ix) Transported properly and at the correct temperature to discourage contamination
and spoilage
5 10/24/03
ROUND ROCK INDEPENDENT SCHOOL DISTRICT
FOOD SERVICE OPERATIONS
AUDIT PROGRAM
W/P AUDITOR
AUDIT PROGRAM REF INITIALS
7) National School Lunch and Breakfast Program
a) Obtain and review the guidelines for the National School Lunch and Breakfast
program. Identify specific components that should be included for testing.
b) Examine the process and procedures in place at the campus level and District level
for qualifying eligible students for the program.
c) Evaluate the level of participation in the program and compare to preceding three
years. Consider comparing to participation levels of surrounding districts or districts
of comparable size and socio-economic make-up.
d) Select a sample of students receiving benefits and test to ensure that:
i) Free and Reduced lunch applications are complete
ii) Students receiving benefits meet income guidelines
iii) Students have been categorized into the correct level of benefits
e) Evaluate the District’s compliance with the verification (audit) of student eligibility.
Ensure that procedures are performed in accordance with TEA guidelines.
f) Evaluate the District’s efforts toward maintaining compliance with other program
issues.
6 10/24/03
ROUND ROCK INDEPENDENT SCHOOL DISTRICT
FOOD SERVICE OPERATIONS
AUDIT PROGRAM
W/P AUDITOR
AUDIT PROGRAM REF INITIALS
8) Sanitation & Safety
a) Select a sample of campuses and tour their kitchens and cafeteria areas during meal
preparation and service time periods (also include Central Kitchens for touring). If
feasible, consider bringing in a professional from another school district. Examine
the following:
i) Adequacy of equipment
ii) Cleanliness of kitchens, equipment, and supplies
iii) Proper storage of food (cannot be placed directly on floor)
iv) Existence of reasonable safety measures, including:
(1) Cooking suppression systems
(2) Fire extinguishers
(3) Postings of evacuation routes or other emergency procedure instructions
b) Consider performing a taste test at campuses visited to develop an opinion on the
quality of the food.
c) Obtain and review records of recent health inspections from the Texas Department
of Health and County offices. Evaluate the reasonableness of corrective action
taken.
d) Determine whether the District periodically performs quality assurance reviews on a
surprise basis to ensure that guidelines for sanitation and safety are followed.
e) Determine the extent and frequency of sanitation & safety training for food service
personnel. These may include:
i) Meal preparation
ii) Food serving temperatures
iii) Hand washing
iv) Basic sanitation guidelines
v) Hazardous materials
vi) Blood borne pathogens
vii) Back injury prevention techniques
viii) First aid
9) Contract Compliance
a) Obtain a copy of the contract with ARAMARK. Review contract for reasonableness
and identify areas in which additional language or other contract components should
be considered in future negotiations.
b) Ensure that the contract was adequately bid in accordance with purchasing laws.
c) Select a sample of monthly billings and review for accuracy. Recalculate
computations and review supporting documentation as deemed appropriate. Ensure
that items included on billings are in compliance with contractual terms and
conditions.
d) Evaluate whether the contract provides the best benefit for the dollars expended or
whether another arrangement (outsourcing the entire food service function or
providing the entire food service function in-house) would be preferential.
7 10/24/03
ROUND ROCK INDEPENDENT SCHOOL DISTRICT
FOOD SERVICE OPERATIONS
AUDIT PROGRAM
W/P AUDITOR
AUDIT PROGRAM REF INITIALS
10) Performance Reporting
a) Determine whether reports and analysis are prepared and presented to District
management. Also determine the frequency of such reports. Ascertain whether
these reports directly impact decision-making processes. Some probable examples
include:
i) Costs per meal served
ii) Cost of food per meal as a percentage of the cost of the meal
iii) Cost of labor per meal as a percentage of the cost of the meal
iv) Indirect costs per meal as a percentage of the cost of the meal
v) Overhead costs charged to the program for benefits, utilities, custodial support,
maintenance, etc.
vi) Profitability of the overall operation
b) Evaluate absenteeism of food service employees and assess the economic impact on
operations.
c) Obtain and review the District’s vending machine contracts. Identify locations of
vending machines within the schools selected for a visit in Step 8) a) above.
Confirm that items sold in machines are consistent with nutritional content
specifications as established by state guidelines. If not, ensure that machines have
timers to shut them down during lunch periods in compliance with state laws.
d) Inquire as to whether the Department provides catering services for the District.
Investigate the method of pricing and billing to determine reasonableness.
11) Customer Service
a) Determine the method and frequency in which the Department assesses its service
delivery, and measures performance. Possible alternatives may include: online
surveys, questionnaires, comparisons with other districts, or published data. Ensure
that the following components are evaluated:
ix) Quality of product
x) Product acceptance by student, staff, and parents
xi) Service acceptance by student, staff, and parents
b) Consider developing a survey or interviewing campus personnel to obtain their
opinions and experiences of food service and interactions with the Department’s
employees.
c) Consider interviewing a sample of food service personnel to determine satisfaction
with current operating procedures, communication levels, and solicit suggestions for
improvement.
d) Consider comparing performance measures of RRISD food service with other school
districts.
8 10/24/03
ROUND ROCK INDEPENDENT SCHOOL DISTRICT
FOOD SERVICE OPERATIONS
AUDIT PROGRAM
W/P AUDITOR
AUDIT PROGRAM REF INITIALS
12) Budget
a) Obtain the Food Services’ budget reports as of the most recent month-end. Review
for unusual transactions, significant overdrafts, or serious fluctuations from amounts
initially budgeted.
b) Test a sample of transactions for accuracy, reasonableness, and adequacy of
supporting documentation.
c) Evaluate overtime expenditures to determine justification. If necessary, evaluate the
possibility of hiring additional employees rather than paying overtime rates.
d) Select a random sample of purchasing card transactions and test to ensure propriety
and reasonableness.
13) Effectiveness and Efficiency
a) Observe the Department’s operations. Evaluate processes for effectiveness and
efficiency. Develop recommendations accordingly.
b) Determine whether appropriate measures are taken to continually improve the
manner in which services are provided.
14) Baldrige Implementation
a) Determine whether the Department has developed a mission statement and strategic
goals.
b) The Baldrige Approach is based on seven criteria – Leadership, Strategic Planning,
Student and Stakeholder Focus, Information & Analysis, Human Resource Focus,
Process Management, and Results. Determine whether the Department has aligned
its goals with these criteria with consideration given to the core values and concepts
outlined below.
i) Learning-centered education
ii) Visionary leadership
iii) Organizational and personal learning
iv) Valuing faculty, staff, and partners
v) Management for innovation
vi) Systems perspective
vii) Management by fact
viii) Focus on the future
ix) Public responsibility and citizenship
x) Agility
xi) Focus on results and creating value
c) Interview Department personnel to determine whether they have attended Baldrige
training and are familiar with Baldrige components.
d) Determine whether data is collected and shared with District personnel on the
Department’s pursuit of its goals.
9 10/24/03
