After years of running healthy surpluses, the student meal service for the East Baton Rouge Parish system has overspent its budget for a second year in a row while also generating less in federal reimbursement funds than it might have.
To erase last year’s red ink, the school system transferred $885,000 from its general operating fund to the Child Nutrition Program. This year, it is having to move even more money, almost $4.9 million, to avoid a deficit.
As a result, district financial reserves — known as its “unassigned fund balance” — will likely shrink by roughly 5%.
That leaves less money for new district initiatives as well as less money to cover costs from unforeseen events such as hurricanes.
Just two years ago, a manmade disaster, the cratering of the district’s transportation system, prompted a flurry of emergency spending. Some of that fall 2023 spending — pay raises and stipends — went to low-paid cafeteria workers after they joined a bus driver sick-out and forced schools to cancel classes for a day.
Superintendent LaMont Cole is asking the parish School Board to revise the budget for the Child Nutrition Program, both for last year and the year that just began, to cover the shortfall.
The board gave preliminary approval to the change at its Aug. 7 meeting. It is up for a final vote Thursday.
At that Aug. 7 meeting, board member Mike Gaudet posed several questions about the shortfall.
Chief Financial Officer Kelly Lopez explained that the food service program cut back on spending months ago but it wasn’t enough.
“We were hoping that the budget would balance itself out, and it did not,” Lopez said.
Lopez noted that “since March we have been marking in the black,” which gives her confidence that the 2025-26 budget will end up balanced.
“How did we get that far without it being caught and corrected?” Gaudet asked.
“It was caught,” Lopez responded. “We were aware of it. We were just hoping we would catch up by the end.”
“Hope is not a plan,” Gaudet returned.
“It is not a plan,” Lopez agreed, “but we are working with Child Nutrition on a corrective action plan for this year to make sure this doesn’t happen again.”
The Advocate has requested a copy of that corrective action plan, but was told it wasn’t quite finished. A detailed presentation on the topic is planned for Thursday’s board meeting.
Where has the surplus gone?
In an interview, Cole, who is starting his second year leading the school system, said part of the cost-cutting is the Child Nutrition Program not filling jobs as people leave. He said the department has also reverted to more traditional meal planning to trim food supply costs, which spiked over the past two years.
The program was buying meals that had lower federal reimbursement rates, meaning less revenue than anticipated, he said. Also, fewer children were eating meals, further lowering reimbursement.
“We saw a huge drop off in the number of kids who were eating breakfast last year,” Cole said.
The Child Nutrition Program has historically more than paid for its operations. As recently as 2018, it ended the fiscal year with a $10.2 million surplus.
That surplus was put to use during the tumultuous days of COVID when schools were often closed. Instead, school meals were served curbside, at pickup sites and even delivered to people’s homes.
By June 2023, the program had rebuilt to a $4.8 million surplus. It didn’t last.
In 2023-24, revenue grew about 3% but spending increased more than 22% compared with the previous fiscal year. To cover that year’s $5.7 million shortfall, that newly built up surplus was erased and $885,000 was transferred from district reserves.
In its annual audit for 2023-24, the accounting firm EisnerAmper blamed the shortfall in part on the added spending that grew out of the bus crisis, pointing to “increased expenditures by providing five salary schedule steps to each employee and paying for $1,500 stipends for all employees.”
Leadership also changed also during this time.
In fall 2023, longtime Child Nutrition Program Director Nadine Mann retired. It took a year, until October 2024, before Cole hired Mann’s replacement, Ellen McKnight Hill. In the meantime, the chief of human resources, Nichola Hall, also took over direct management of the program.
Hall had previously led school nutrition programs in New York and in Bridgeport, Connecticut. Soon after coming to Baton Rouge in 2021, she began overseeing Child Nutrition from her perch in HR. Hall championed a shift to healthier meal options, the hiring of new chefs and serving weekend meals. She also revamped the salary schedule for Child Nutrition employees so they better reflected the job market. That increased pay further for many cafeteria workers, but also increased payroll costs.
After McKnight was hired, Cole reassigned Hall from HR to serve in the new role of administrative director of child nutrition. It was a job she held for seven months until she resigned in May to become an administrator at a charter school in Baton Rouge.
