School lunch program debt now forgiven in Missouri

SIKESTON -- The U.S. Department of Agriculture has forgiven over $5 million in debt being assessed on 40 Missouri schools.

Among school districts affected by Wednesday's announcement was New Madrid County R-1, which will have $222,731.59 in commodity values credited to its school food service account.

"Naturally, we're glad the matter has been resolved and the 'debt' has been removed," said Paul Northington, director of business and finance for New Madrid County R-1.

Northington said he considers the matter more of an accounting clarification than that of a debt issue.

Earlier this year, the state Department of Elementary and Secondary Education directed the school districts to transfer funds into their nonprofit food service accounts to their general operating accounts due to an accounting dispute with the USDA.

"This (announcement) removes that requirement," Northington said. The R-1 district has contracted its food services through Opaa Food Management for the past eight years.

The problem resulted from an accounting disagreement between the USDA and DESE involving the way food service contractors handled commodity foods in the bidding process from 1997 to 2002.

U.S. Sen. Jim Talent and U.S. Rep. Jo Ann Emerson worked with USDA and DESE to resolve the accounting error and to have the debts forgiven.

"As we start a new school year, this announcement is a great relief to the 40 school districts that will no longer be required to transfer additional funds into their food service accounts," said Talent, who is a member of the Senate Agriculture Committee. "Many of these schools, located in rural areas with severe budget constraints, can now focus more time and attention to meeting the educational needs of their students."

In a reply to Talent, Nancy Montanez-Johner, under secretary of Food, Nutrition and Consumer Service, said the debt forgiveness is based upon the assurance that internal controls are now in place to ensure that commodity values are properly credited to the nonprofit school food service accounts.

Northington admitted he wasn't really surprised by Wednesday's announcement from Talent and Emerson. In August, the district received in some indications from DESE not to worry about the issue.

He also said a material financial impact on the district wasn't going to be the case.

"We are glad Rep. Emerson and Sen. Talent, along with the help of DESE, were able to get the matter rectified with the USDA," Northington said.

In addition to New Madrid County R-1, other local schools affected include Portageville R-2, $98,633.15; and Bloomfield R-14, $92,254.60.

"These school districts were not at fault for the change in accounting rules, and they were unfairly being assessed for the debt after the fact. I'm glad we could set this matter straight and relieve a burden from their shoulders as school faculty and administrators prepare their budgets for the coming school year," Emerson said.

There was no wrongdoing in Missouri, Emerson said.

"But there was some heavy-handed, out-of-touch government regulation in Washington," Emerson said. "At the end of the day ... common sense prevailed."