By Nicole Bowman-Layton

EDENTON — Edenton-Chowan Schools’ child nutrition program is still operating at a loss, but a recent financial audit shows the district cut that loss substantially during the past year as school meal programs elsewhere in the region continue to face similar financial struggles.

The program showed a $13,700 increase in fund balance for the fiscal year ending June 30, according to an audit presented to the Edenton-Chowan Board of Education.

But that figure included $100,000 transferred from the district’s general fund to help cover child nutrition operations.

Take away that transfer, auditor Dale Smith, a CPA with Anderson Smith & Wike PLLC, told board members, and the program actually operated at a loss of approximately $86,300.

That’s still a deficit, but a considerably smaller one than in the previous two years.

“If we’re going to try to compare apples to apples with the previous year, in the previous year the program reported a loss of $152,000, and the year before that the loss was $139,000,” Smith said.

“The program showed significant operational improvement last year,” he added.

Smith said the situation is not unique to Edenton-Chowan.

“There’s still quite a few districts in this area that are experiencing losses in their child nutrition program,” he said.

The district’s goal for the current school year is to eliminate that operating deficit altogether.

District targets break-even year

Edenton-Chowan’s 2026-27 budget sets child nutrition revenue and expenses at approximately $1.64 million and does not include a local contribution to cover a projected deficit.

Superintendent Tammi Ward acknowledged that reaching break-even will be a challenge.

“This is a challenge for us. I think we all know that,” Ward said. “We’ve talked about the child nutrition program. You’ve heard the auditor talk about districts. We’re not solo in this. It’s a struggle across the state.”

Ward said district officials deliberately chose an aggressive target rather than building another operating loss into the budget.

“This allows us to talk every month about where that is and what’s happening,” she said.

The new financial reports presented to the board are designed to make that easier. Board members will be able to follow the program’s budget, year-to-date spending and participation rates throughout the school year.

But Ward said balancing the program will require more than simply reducing expenses.

Students have to eat the meals.

“It’s not just the child nutrition’s challenge,” she said. “It’s principals’ challenges. It’s our community challenges to get their students to eat in the cafeteria because it’s participation that makes the program successful.”

The district provides breakfast and lunch to students, and federal reimbursements make participation an important part of the program’s finances.

“We can do cost cuttings and everything else, but if we still don’t get the kids through the line eating in the cafeteria, it’s still going to be very, very difficult for us to be a self-sustaining program,” Ward said.

Trying new ways to boost participation

Child Nutrition Director Stephanie Patsel said the district is already experimenting with ways to get more students to eat school meals.

Chowan Middle School began using a new breakfast model the day before the board meeting.

“It’s been a little tough,” Patsel acknowledged. “A little stressful.”

The district plans to watch the results to see whether the change gets more students to participate.

“If it works, great, and if it doesn’t, then we’ll try something else,” Patsel said. “You have to try things, and so we’re going to try.”

Patsel cautioned board members against reading too much into participation numbers from the first weeks of school.

“The first week of school, everybody eats breakfast at home and they’ve got their lunch in their cute lunch boxes, and then we get to the second week, right?” she joked.

Other beginning-of-year factors, including staggered attendance for younger students, can also distort early participation figures.

Patsel said September should provide a better indication of participation, while October — with more regular operating days — should provide an even clearer picture.

What’s on the tray matters, too

The district is also working to offer food students want to eat, although Patsel said supply problems have made some new products difficult to obtain.

She said the district has been working with its distributor to get products it wants to introduce into school cafeterias.

Board members offered some anecdotal evidence that at least some meals are finding an audience.

Board member Ricky Browder said he overheard a child talking with his grandfather during Grandparents Day.

“I overheard a child tell his grandpa that he had to get the orange chicken because it was delicious,” Browder said.

That particular meal also has a financial advantage.

Patsel explained that the diced chicken is obtained through the U.S. Department of Agriculture’s commodity foods program, reducing what the district has to purchase to serve the meal.

“We really try hard to utilize our commodity dollars,” she said.

Board member Joanne White said she has also heard favorable reviews from some notoriously difficult customers — picky teenagers.

“I’ve heard things about the lunches at the high school from picky eaters — I mean, real girls picky — and they race to get to the lunch,” White said.

Patsel credited cafeteria employees and school administrators for helping the program improve.

“The staff is phenomenal,” she said. “Our managers, I mean, they’re just fantastic.”

Three years of losses, but gap narrowing

The district still has work to do before child nutrition becomes self-sustaining.

Without the $100,000 general fund transfer, last year’s approximately $86,300 operating loss marked at least the third consecutive year the program finished in the red.

But it was also a significant improvement from losses of $139,000 two years earlier and $152,000 the following year.

Smith said the audit found no compliance issues with the state and federal programs tested and praised the district’s financial staff for its recordkeeping and procedures.

For child nutrition, the next test will be whether the improvement can continue far enough to eliminate the deficit entirely.

Ward said reaching that point will require participation across the district, not just changes inside school kitchens.

“It is aggressive,” she said of the break-even goal, “but I’m very excited about the willingness of everybody to participate in that.”