Dealing With Delinquency

Published in FSD K-12 Spotlight

Unpaid lunch bills create financial challenge for districts, moral issue for foodservice directors.

By 
Paul King, Editor

The following scene is played out daily in school districts all across the country: A child selects a lunch and takes it to the cashier station. The cashier calls up the student’s meal account on her computer and notices that the child’s foodservice account has a zero balance. At this point, the foodservice worker is required to take one of two actions—the result of a sometimes hotly debated rule set down by the foodservice director, district administration or school board. She either allows the student through the line, charging the meal against his or her account, or she takes the tray from the child and instructs him or her to select an alternate meal—usually a cheese or peanut butter and jelly sandwich, fruit and milk.

In either case, she knows there is likely to be fallout down the road. Charging the meal probably means more financial hardship for the foodservice program. Worse, swapping out what the child wants to eat with what the district has chosen to provide in such cases may call down the wrath of an angry parent. Word spreads through the community about the cruel “punishment” bestowed upon a hungry kid, and the next school board meeting draws a bevy of parents ready to pillory the foodservice program for putting dollars ahead of their children’s health and well-being—whether or not that is actually true.

The problem is not a new one, foodservice directors say. As long as parents have been able to set up accounts to prepay for their children’s meals, there have been incidents where parents allow their accounts to dip into negative balances. But it recently has been gaining the attention of local and national media outlets as parents, students and some school employees have taken to Facebook, Twitter and blogs to vent about what they perceive as harsh—some have even suggested inhumane—treatment of children who have committed no “crime,” putting foodservice programs under an unwelcome spotlight even as they struggle to bring their programs in line with new federal meal regulations.

A few recent examples:

• A school bus driver in Georgia was fired after he refused to remove a Facebook post in which he criticized the school district for refusing to feed a middle school student whose parents owed meal money. The district says the bus driver had his facts wrong—the child never even went through the lunch line on the day in question, according to the district superintendent—but the driver wouldn’t back down.

• A cafeteria manager in Missouri was fired after the district discovered she allowed a child to rack up a debt in excess of the district’s policy and then continued to allow the student to take meals without recording them. The district accused the manager of theft, but after a huge outcry from parents, the district let the matter drop and gave the manager back her job.

• Whitsons Culinary Group, the Islandia, N.Y.-based foodservice contractor that manages foodservice for the school district in Attleboro, Mass., fired four employees earlier this year after it was discovered that they had denied students lunches because their meal accounts did not have enough money in them. The employees were disciplined because denying meals was against district policy. However, even this action, which should have been viewed as the district and Whitsons stepping up in defense of children, didn’t mollify everyone. At a school board meeting, several parents said the issue went deeper than the reported incident and alleged there was a cover-up involving district officials.

A growing problem

These are extreme examples, but school districts throughout the U.S. struggle with the issue of delinquent meal accounts. In a 2012 survey conducted by the School Nutrition Association (SNA), 53% of school districts reported seeing an increase in the number of students who can’t pay for their meals and 33% said they anticipate “a significant increase,” in that figure. 

The size of the debt may vary by district, but one thing is generally true: the larger the district the bigger the shortfall. In a district with 4,000 or 5,000 students, the annual debt could run $20,000 or $30,000. In a district in a major city such as New York, Chicago or Los Angeles, the debt can reach millions of dollars. For example, according to an article in The New York Times, in the first three months of the 2011-2012 school year, New York City public schools had amassed more than $2.5 million in unpaid meals. 

“We all struggle with delinquent payments,” says Joanne Kinsey, director of school nutrition services for Chesapeake Public Schools, in Virginia. “The whole issue of meal charges, alternate meals and the ‘cheese sandwich’ offering is controversial. No one wants kids to starve, but finding the balance between doing the right thing  financially and morally is tough.”

Colleen Fillmore, director of child nutrition programs for the state of Idaho, says that determining the best way to deal with delinquent meal accounts is perhaps the most unpleasant tasks with which directors are faced.

“The people who are in child nutrition programs never want to deny any child a meal,” Fillmore says. “But how do you deal with it, knowing that a program cannot run in the black if they give food away? There is no easy solution to any of this.”

Carol Chong, national nutrition advisor for the Alliance for a Healthier Generation, dealt with this challenge when she was the director of food and nutrition for Miami-Dade County Public Schools, in Florida.

“Because child nutrition professionals are in the business of feeding children you definitely don’t want to see a child go hungry or deny a child a healthy meal,” Chong says. “I know cafeteria managers who have actually paid for a kid’s meal. Your heart pours out to them. You want to feed them.”

However, as much as she sympathizes with children’s plight, Chong has little problem giving students a special meal when they can’t pay for the regular lunch. Recalling her time in Miami, she says, “[Parents] probably didn’t like it that their child got the alternate meal. But they knew then to put money in the account after that. It’s not a punitive measure. It’s an economic, fiscally responsible measure.” 

A paperwork issue

There are several reasons why accounts may fall into arrears, directors say. The most common occurs at the start of the school year, when families who may qualify for free or reduced-price meals must file their applications. Parents have up to 30 days to apply, during which time a window of debt opportunity opens.

“A lot of debt is created at the beginning of the year when our free and reduced kids don’t re-up,” says Debbi Beauvais, president of the New York state chapter of SNA. Beauvais has oversight of three districts in upstate New York. “We continue to count them as we did the previous year, but if they don’t sign up or don’t qualify we’re not going to get that money back.”

Peggy Lawrence, foodservice director for the Rockdale School District, in Georgia, notes that children can accumulate charges while their parents’ applications are being processed. “We flag all new applications to make sure those are expedited,” she explains. “But sometimes we run into problems when principals don’t turn an application in.”

Beyond this annual problem—approved applications are not retroactive to the start of the year—directors suggest that much of the rest of the debt comes as a result of parents who either are on the cusp of qualifying for government assistance, who are struggling because of an unexpected financial burden such as large medical bills or who are barely making ends meet.

“We really try to monitor the situation with meal payments,” says Lyn Halvorson, child nutrition director for the Winona Area Public Schools, in Minnesota. “Foodservice workers bring it to our attention and we ask the principal or school psychologist to reach out to the parents and see what their financial situation is. Sometimes, the parents don’t know they qualify for assistance. Other times, they’ve just encountered a large medical or other bill, and we try to work with them.”

Chong adds, “With the [current] economy the principals in Miami are allowed to do a temporary application for a free meal if they know something about the economic status [of the family]. They also continue to do their due diligence to get a parent to fill out an application to get approved.” 

Recently, the USDA introduced a pilot program in six states called the Community Eligibility Option. Under the plan, individual school districts can file an application to be considered. If more than 40% of the families in the district qualify for free or reduced-price meals, the district will be permitted to provide meals free of charge to all students.

The forgetful ones

Then, of course, there are those parents who simply forget to keep up with their accounts.

“I’m amazed at how many parents don’t pay attention,” New York’s Beauvais says. “They figure they can make it up later. But even that becomes a problem. For example, a parent may owe $15, and they send $20 in with their child. Three days later, the account is back in negative numbers, and the parent complains, ‘But I just gave you $20.’ They don’t consider that the money they gave us barely paid off the debt.”

In a growing number of districts, foodservice departments have set up a number of reminders for parents, depending on the sophistication of their technology. In addition to the time-honored note home, parents may receive email alerts, computer phone calls and even text messages letting them know that their accounts have run dry.

“Parents can’t say any more that they don’t know,” Winona’s Halvorson points out.

In some districts, such as the Spring Independent School District, in Texas, the online system even allows parents to set up an automatic debit from their bank accounts when the meal account reaches a certain level. If parents are uncomfortable with that, they can sign up to receive an email or text message when a predetermined level has been reached.

Still, with all of these reminders available to parents, the problem with delinquent accounts persists, and districts are beginning to take more drastic measures to get their money back. For example, in the Gloucester School District, in Massachusetts, where the total outstanding debt for the district was nearly $60,000 during the last two years, about 30 parents whose accounts had gone into arrears by $250 or more were threatened with court action. According to the district’s Director of Finance and Operations Hans Baumhauer, 20 parents arranged to make payments as a result. 

“We took the other 10 accounts to small claims court, and the filing action caused another four parents to pay,” Baumhauer says. The other cases are pending.

In the North Middlesex Regional School District, also in Massachusetts, the district recently proposed withholding report cards and banning students from extracurricular activities and even graduation if their parents owe the district lunch money. According to an article in the Lowell Sun, the proposal has been posted on the school district’s website for public review. But some school board members already have questioned the legality of the move, as well as wondering whether the district should punish children for what is the parents’ responsibility.

Setting limits

There may be no sure-fire solution, but many directors will tell you that there is a way to alleviate the situation somewhat. That is for administrators to create a charge policy and stick to it. A charge policy sets a limit on the number of regular meals a child will receive “on account” before being given some alternate meal. Directors note that it might not necessarily get parents to pay what they owe, but it does limit the extent of the damage.

Nancy Rice, director of child nutrition for the Georgia Department of Education, was a foodservice director for 15 years. She says in one district where she worked she advocated a charge policy, but “the school board did not believe a child should ever receive an alternate meal. At the end of that year parents owed $80,000.”

Mark Bordeau, a school nutrition professional who oversees 14 districts in lower central New York state, advocates a charge policy to all districts. “The districts that allow me to implement a charge policy have low account balances,” Bordeau says. “The ones that do not allow that have high negative balances. We just took over a new district this year. That district has around 2,300 students and a negative balance over $20,000.”

For that district Bordeau drafted a charge policy that was presented to the school board in mid-July.

In the Clark County Public Schools, in Nevada, a very strict charge policy has helped the district do “extremely well in reducing student debt,” says Foodservice Director Virginia Beck. “Our policy in the elementary schools is a student may charge up to two breakfasts and two lunches. Beyond that, they are given an alternative meal of a grilled cheese sandwich, fruit and milk until their account is current. We do not allow any charges in our middle and high schools.”

In the Davidson School District, in North Carolina, the school board took a slightly different approach after a no-charge policy for high school students barely made a dent in its debt. The board voted to limit charges at the elementary level to a dollar amount—$11.75—rather than by a number of meals before serving students an alternate meal. This plan has managed to cut Davidson’s debt by 30%, according to an article in Education Week.

SNA believes that the federal government could help the situation by giving districts some guidelines with which to work. In its 2013 Legislative Issue Paper, the organization stated: “Congress should require USDA to establish a consistent national policy on school meal charges and how to address the debt incurred by unpaid meal charges.” 

Janey Thornton, the USDA’s under secretary for Food and Nutrition Services, says the agency is considering SNA’s request. However, she adds that in the end the issue “is still a local one.”

Joanie Hildebrand, director of child nutrition programs for the state of Oklahoma, concurs. “There are 559 districts in Oklahoma and each program sets up its own system,” Hildebrand says. “When we know a district doesn’t have a [charge] policy we try very hard to teach them that they need one and they need to stick to it, because even when they have a policy they may choose to ignore it.”

Covering the debt

The irony of districts not embracing a charge policy is that the USDA requires school foodservice programs that are part of the National School Lunch Program to zero out their budgets at the end of each school year or lose funding for the following year. As a result, any shortfalls must be made up by the school district—usually from the general fund.

“If a district is in serious financial trouble,” Bordeau notes, “that money is potentially the salary of a teacher or other employee.”

Realizing this, some district boards of education are starting to hold principals accountable for negative balances. Most recently, the Rapides Parish School Board, in Louisiana, voted in June to begin requiring unpaid school meals to be covered from individual school accounts. Previously, the balance owed—$36,000 this past year—was paid from the parish’s general fund. Foodservice Director Erma Davis says she recommended the move because the biggest cause of the debt is late-filed applications for free and reduced-price meal eligibility. 

“It’s up to the principals to get these applications filed on time and holding them responsible for the debt will encourage them to move more quickly,” Davis says.

Rockdale School District is another one that requires individual schools to cover outstanding school meal balances. “You get a big buy-in from principals when they have to write a check,” Lawrence notes.

Community involvement

The issue of what, or even whether, to feed children in these cases is cause for some impassioned debate. On occasion, members of the community will even pitch in to help ensure kids can receive their choice of a meal. For example, this past spring at R.C. Hinsdale Elementary School, which is part of the Kenton County School District, in Kentucky, the school’s Parent Teacher Association donated $350 to cover the cost of students whose meal accounts were overdrawn. 

Sometimes, the local involvement is long term. The Winona Area Public Schools has had in place for nearly 10 years a special account called the Feed The Kids Fund. The account is administered by the school nutrition office and kept going by donations from individuals and organization in town. 

“Feed The Kids was started in 2004,” Halvorson explains. “The project itself is a referral process. We get a phone call from a teacher, administrator or other employee about a child who can’t seem to be able to pay for lunch. The first thing we do is check to see whether the parents have filled out an application for free or reduced-price meals. Sometimes they don’t know they qualify.

“For those who don’t qualify, Feed The Kids is a safety net,” she adds. “It is a temporary stopgap to help parents who, because of circumstances, can’t afford lunch. We generally allow them to make use of the fund for two to four weeks.”

The easiest part of the program is keeping it solvent. “Our community has been very generous,” Halvorson explains. “We have benefactors who donate money every year, like church groups or women’s groups. We get a lot of individual contributions from staff members, school board members and even anonymous donors.

“It’s important for us to do things behind the scenes,” she adds. “We really are highly vigilant when it comes to what our children need, and the kids don’t have to know. The bottom line is, we don’t ever want a child turned away or feel ashamed because of their home situation. It’s not supposed to be a child’s problem.”

Sometimes, however, the problem is much bigger than a special fund can handle. Rice recalls, in one district in which she worked, that the PTA offered to cover the cost of a meal for any kid whose parents owed money. “Three-quarters of the way through the school year, they discovered that the problem was much bigger than they realized. They had to abandon it.”

So, is there a solution to this situation that doesn’t involve legal action or bailouts? Bordeau says there is.

“Universal lunch is the only answer,” he suggests. “But I don’t think that’s going to happen anytime soon.”