Clerk: Inventory and Food Services Essay

INTERNAL AUDIT REPORT FOOD SERVICES
February 11, 2003

Roanoke City School Board Roanoke, VA We have completed an audit of the food services department. Our audit was performed in accordance with generally accepted governmental auditing standards. BACKGROUND: The school’s Food Services department is responsible for providing approximately 2 million meals to Roanoke City School pupils annually. In order to accomplish this, the department employs approximately 100 persons in 29 production cafeterias. This includes administration, coordinators, cafeteria managers, and food service workers. Expenditures for food amounted to approximately $1,993,000 in fiscal year 2002. Additionally, approximately $188,000 was spent for disposable items and cleaning supplies. Lunch and breakfast meals are provided in accordance with the provisions of the National School Lunch Act and the Child Nutrition Act of 1966. The department maintains three distinct types of inventory at each of its production cafeterias. Purchased food, purchased supplies, and United States Department of Agriculture (USDA) donated foods are each recorded and reported separately in a daily inventory book. Purchased food includes all food items that are purchased from commercial vendors. Purchased supplies include all supplies such as disposable plates and utensils, napkins, straws, foil, and cleaning chemicals. USDA donated foods includes all food items which are donated to the school system by the Department of Agriculture for use in the school lunch program. This typically includes various meat products, fresh fruits, and canned food items. USDA donated inventory must be reported to the State on a monthly basis. Planning and management of inventory levels is partially centralized and partially decentralized. Most orders are completed by a centralized process initiated at the individual schools. The schools plan their inventory requirements by reviewing inventory on hand and determining what additional inventory will be required to prepare the meals planned on the school lunch menu. The schools then submit an order form to food services administration for any inventory required during the period. Food services administration then compiles all school order forms for each vendor and places the order. Vendors are selected via a bid process conducted by purchasing.

Food Services Inventory PURPOSE: The purpose of this audit was to: • • •

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Evaluate the controls over ordering, receiving, distributing, and storing cafeteria food and supplies. Evaluate the process for planning and managing inventory levels. Evaluate the security over inventory.

SCOPE: The audit focused on the system of internal controls in place as of November 30, 2002. We tested transactions occurring between October 1, 2002 and December 31, 2002. The audit focused on cafeteria inventory and did not address the day-to-day operations of the cafeterias, or cash handling. METHODOLOGY We gained an understanding of the food services inventory process through observation and interviews with employees of the department. We visited central administration and three schools to document and evaluate the inventory process. Additionally, we reviewed relevant State and Federal laws that may have an impact on food services’ inventory. This review included the National School Lunch Act, the Child Nutrition Act of 1966, and Virginia Board of Education regulations. Based on this information, we developed tests to evaluate the operation and effectiveness of relevant controls. RESULTS We reviewed the physical security of the school cafeterias and determined that inventory and supplies are generally well secured. The food services department uses forms prescribed by the USDA for inventory record keeping. These forms were designed by the USDA to adequately monitor inventory on a perpetual basis. Accordingly, our test work indicated that generally, inventory was accurately recorded on the inventory books.

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