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SDLA Compliance Resource

Monitor School Nutrition Net Cash Resources

An implementation guide for calculating the cafeteria fund's net cash resources each year, comparing them with the allowed limit, and planning spending when the limit is exceeded.

  • Nutrition Services
  • Fiscal & Budget
Date(s)Annually after the cafeteria fund closes (commonly with unaudited actuals) and during CDE administrative reviews
Applies toSchool food authorities operating the National School Lunch and School Breakfast Programs

In Plain Language: Federal rules require the cafeteria fund to be run on a nonprofit basis. Its net cash resources (cash and cash-equivalents available to the program, less payables) may not exceed the allowed limit. Federal rules say three months of average expenditures unless the state approves more; CDE raised California's limit to six months. Exceeding it requires a plan to spend the excess on the program.

Why this matters

Excess balances are a finding in CDE's administrative review and must be spent down on allowable food-service costs. Too little cash is also a warning sign for the general fund.

Joint ownership

District: nutrition services director and fiscal services. CDE Nutrition Services Division: reviews during administrative reviews.

From cafeteria fund balances to a net cash resource determination: the SDLA ITO workflow

This workflow checks the cafeteria fund against the nonprofit limit every year. This SDLA ITO (Input, Transformation, Output) graphic shows how the inputs become the outputs in 9 steps.

SDLA ITO: 9 steps. Input: cafeteria fund balances; operating expenditures; cDE guidance. Transformation: calculate net cash; compare to the limit; plan any spend-down. Output: net cash worksheet; spending plan if required; review-ready file.
Read down each column, then move to the next: Input identifies what to collect; Transformation covers calculate net cash; compare to the limit; plan any spend-down; Output delivers net cash worksheet; spending plan if required; review-ready file. Annually after the cafeteria fund closes.

Open the full-size workflow graphic

Implementation workflow

  1. Year-end closePull balances.Extract cafeteria fund balances and expenditures.
  2. With unaudited actualsCalculate.Compute months of net cash resources.
  3. If over the limitPlan.Adopt a spending plan for allowable program improvements.
  4. During reviewsProvide support.Share the worksheet with CDE reviewers.

Net cash resources checklist

  • Net cash calculated with the current definition.
  • Compared with the six-month California limit.
  • Spending plan adopted if over the limit.
  • Worksheet retained for the administrative review.

Official guidance and help

Source review completed October 25, 2026. Verify that SNP-04-2022 remains current before relying on the six-month limit.